Oroton Group, responsible for luxury brands Oroton and Polo Ralph Lauren, has reported a stagnant net profit of $15.4 million for the half year ended January 29, 2011, unchanged from the previous corresponding period.
Like for like sales for the Oroton label were also down by 5 per cent, while the Polo Ralph Lauren saw an increase of 6 per cent in the same.
The company stated sales were softer than expected due to a decision to hold back discounting and instead focus on long-term brand development and growth. Oroton Group chief executive Sally Macdonald said the approach was strategic in a “highly-discounted environment”.
“We strategically managed our own discounting levels to preserve long-term positioning of our two premium brand – increasing our average selling price in our core Oroton bag line as a result,” she said.
Overall group revenue, however, grew by 7.1 per cent to $87.4 million from $81.6 million the previous year.
Oroton also revealed its online operations, launched in 2006, as the group's fasted growing channel, with sales up 100 per cent in the half year period. As a response to this success, the group is also currently testing promotions online and analysing customer reactions in order to adapt promotional plans and target new audiences.
The group also opened five Oroton stores and one Polo Ralph Lauren factory outlet during the first half trading period, and plans to launch its labels in another six locations during the second half. This will include three Oroton stores in Singapore and Malaysia, and one Oroton store and three Polo department store concessions in Australia.
Macdonald said that while the group will maintain a cautious approach to business, it will be zoning in on the Asian regions.
“Overall, the outlook for the second half remains cautious with the group well placed to meet both changing customer expectations and uncertain market conditions, [however], we are monitoring our international store results carefully and remain confident Asian markets represent a cast growth opportunity for the Oroton brand,” she said.