Premier Investments, parent company of Just Group and brands, has flagged possible store closures on the horizon, despite a significant profit rise for the first half of 2013.
The group, which revealed a profit lift of 20.7 per cent for the 2013 fiscal half year, has confirmed the shut-down of 14 loss-making stores during the season and has hinted at more closures ahead.
Commenting on the company's positive profit results, Premier CEO Mark McInnes said the 14 stores were closed as a result of “unsustainable rental costs in Australia”, with more to follow if conditions don't improve.
“Further store closures will occur if the rents expected by landlords are not in line with the performance of the centre and the market generally,” he said.
However, he added that the group will continue to invest in technology, brands, store fit-outs, service and marketing for its existing and performing stores – backed by strong sales from its retail brands.
Premier Investments confirmed a profit before tax of $64.5 million and a net profit after tax of $46.5 million for the half year ended January 26, 2013 – up exactly 20.7 per cent on the previous year.
The positive result has been credited to a strong profit performance from the company's Premier Retail division, led by CEO and former David Jones executive McInnes.
Premier Retail profit before tax increased 14.7 per cent to $52.6 million despite the difficult macro environment continuing. Total sales for the group were up 2.5 per cent at $444.7 million.
According to the company, womenswear retail chains Portmans and Dotti in particular have delivered “outstanding results”, with Just Jeans and Jacqui E also improving in profitability.
While fashion label Jay Jays has lagged behind the other brands, the company said it is “confident that the performance of the brand can be improved significantly moving forward”.
The company said several cost-cutting measures employed during the period have also contributed to the positive profit results, with more than 20 cost reduction initiatives still in progress across its network.
Going forward, the group said it will continue to focus on its online platforms – which this season saw sales increase by 51 per cent.
Investment in the Peter Alexander and Smiggle brands, including retail rollouts for both brands in addition to global expansion, will also continue.
Commenting ion the company's future, McInnes said he believes that Premier Retail is “well positioned to take advantage of all its growth opportunities”, despite the severe pressures facing all Australian retailers.
“We are pleased with our continued progress on the Premier Retail transformation and in particular the profit performance of the organisation.
"Our improved profitability and working capital management has given us the latitude to pay down debt at the Premier Retail level and to continue our investment in building a world-class team operating a world-class platform for the benefit of our customers,” he said.