New Zealand apparel group Hallenstein Glasson and fellow local chain Pumpkin Patch has revealed they are navigating a competitive market and actively looking for other avenues to grow their respective brands further.
Both retailers recently released their figures for the full financial year-to-date.
Hallenstein Glasson indicated that the audited net profit after tax for the 12 months to August 1, 2013 was $18.669 million, a decrease of 11.18 per cent over the corresponding period last year ($21.020 million).
Group sales for the period, however, rose to $220.117 million, an increase of 2.10 per cent over the corresponding period last year ($215.581 million). By brand, sales for most brands increased, with Hallenstein Brothers reporting a 5.33 per cent rise, Storm 24.06 per cent, Glassons Australia (in Australian Dollars) increased 6.45 per cent.
Glassons New Zealand, however, recorded a slight sales drop of 3.14 per cent and the company said that whilst performance in the first half of the year was satisfactory, results for the winter season have been disappointing.
Speciality childrenswear retailer, Pumpkin Patch, by comparison, reported underlying net earnings of $8.5 million for the 12 months ended July 31 2013, at the upper end of guidance given in June, and that it had returned to profitability with a strengthened balance sheet.
Total revenue from the continuing business operations was $288.7m, down 4.0 per cent on last year. Total group reported earnings after tax were $5.1 million, a turnaround from the $27.5 million loss last year.
However, despite the heartening result, new Pumnpkin Patch CEO Di Humphries said while the reported result was “significantly” better than last year and the company is in a stronger financial position, “there’s still a lot of hard work ahead of us especially while trading conditions remain challenging”.
For both retailers – the improvement seems to be heavily focused on invbesting in other avenues for the businesses.
For Pumpkin Patch in particular, there will be strong focus on online growth, with online sales in Australia now equivalent to around 16 per cent of the company’s Australian retail sales.
Online sales for the brand for the full fiscal year 2013 were up 18 per cent to $38.7 million and Humphries said online is a very profitable part of the business that now generates earnings almost twice that of all Pumpkin Patch New Zealand retail stores combined.
“We see the online business continuing to grow strongly. With its higher than average operating margins it will be an even bigger earnings contributor going forward,” she said.
“We are pleased with the progress we are making in repositioning the business and remain committed to our long term growth strategies which we are confident will deliver much improved returns to our shareholders.
“With over 80 per cent of our revenue coming from offshore markets we are becoming a true international operator.”
Humphries said she also believes that while the international business can create volatility in earnings, the increasing international exposure provides Pumpkin Patch with much more significant growth opportunities than what it would have if the company’s plans were just focused on Australasia.
“We are pushing ahead with our international growth strategies and are currently exploring franchise, wholesale, and online opportunities in a range of markets around the world.”
The largest international market for the brand is the Middle East, which is trading strongly, with the group set to work with partners going forward to develop what is expected to be significant long term growth opportunities in the region.
Humphries confirmed the group is also “exploring a number of franchise, wholesale, and online opportunities for both Pumpkin Patch and Charlie & Me brands”.
The Hallenstein Glasson group will also be looking to foreign markets to boost its business, with the group recently announcing a partnership with Ekocycle (a collaboration with global music artist Will. I. Am and The Coca-Cola Company).
The tie-up will see the company introducing a collection of men’s suits as its latest sustainable product offering, under Hallenstein Brothers’ tailored suit label, H Brothers.
Hallenstein Glasson CEO Graeme Popplewell said this collaboration is the first step in “exposing Hallensteins to a wider global market”.