Specialty Fashion Group has posted a 64 per cent tumble in half year profit - and there's just one culprit.
Specialty Fashion Group recorded a net profit of $5.85 million for the six months to December 1, down from $16.3 million a year prior.
The result was impacted by an $11.2 million loss from Rivers.
Revenue for the half year was $413 million, 27.4 per cent higher than the previous period.
This increase reflected underlying comparable store sales growth (CSG) of 5.7 per cent for the Group during the half, excluding Rivers.
The Group, which also operates Millers and Katies, revealed there were several legacy issues to resolve before Rivers contributes to its profitability.
CEO Gary Perlstein said other brands in its portfolio had performed well.
“Apart from Rivers, the overall performance of the Group has been pleasing, especially in an environment where discretionary expenditure has been under pressure.
"Given the Group’s track record of acquiring brands and delivering operational improvements to extract value, we are confident that we will be suc cessful in rebuilding and integrating the operations of the Rivers brand into the Group."
A number of measures have been introduced as part of the Rivers turnaround.
This includes the performance of the first Rivers womenswear category relaunch since its acquisition.
It also includes progress to reduce ongoing marketing spend and align future efforts with the company's digital strategy.
However, continued discounting activity, whilst crucial to accelerate the improvement of Rivers in the medium term, has had a signi icant negative impact on margins in the short term.