PAS Group latest to feel Grinch pinch
STRUGGLING fashion retailer PAS Group is the latest chain to testify to the disappointing Christmas sales, issuing its second profit downgrade in nine weeks.
PAS owns apparel brands Review and Black Pepper and licenses brands such as Slazenger, Lonsdale, Mooks, Star Wars and Marvel.
Its latest downgrade follows similar profit warnings from outdoor adventurewear and equipment retailer Kathmandu and consumer durables company Gale Pacific.
Concerns are growing that the nation’s retail sector, especially those in the fashion and apparel category, are facing a rout from the unexpected sharp decline in holiday trading.
PAS yesterday said that after the Christmas period the company now expected earnings before interest, tax, depreciation and amortisation for the six months to December to be at the lower end of the $5 million to $7 million range it announced in November.
The lowered guidance provided in November was blamed on competitive pressures.
“Whilst PAS has experienced year-to-date revenue growth in excess of prior years, continued softness in our higher-margin retail businesses and a reduction in the performance of concession stores has more than offset the profit impact of the previously-announced substantial new business wins,” chief executive Eric Morris said.
The early indications are that Christmas was tough for many retailers. Menswear chain Ed Harry collapsed into voluntary administration on Tuesday, following the failure of menswear group Roger David and housewares group Laura Ashley before Christmas.
Wesfarmers downgraded Kmart’s sales forecast earlier this week.
The Reject Shop, which is also underperforming, this week confirmed its sales had held up over Christmas and it would meet its profit guidance, although this guidance was itself downgraded late last year.