Don’t take fashion in stride, it’s tough
FASHION retailer Noni B is the latest retail chain to warn shareholders that tough trading conditions have eroded sales momentum.
But the group has upgraded its profit forecast, citing better- than- expected savings from an earlier takeover.
Noni B said yesterday that like- for- like sales – a tally that strips out the impact of shops opening and closing – had dropped 5 per cent since July, compared with the same period a year ago.
That fall was expected, the group said, as it also integrated the Specialty Fashion portfolio of clothes businesses it bought earlier this year.
It marks a sharp deterioration from the strong 4.5 per cent like- for- like sales growth Noni B chalked up across its fashion brands in the past financial year.
Noni B said it expected to make bigger savings than previously expected from its Specialty Fashion acquisition.
It now expects pre- tax earnings to rise as much as 21 per cent – to $ 45 million – this financial year – better than the market expected.
Chief executive Scott Evans said Noni B had been “transformed” through the takeover of five well- known brands from Specialty Fashion, Millers, Katies, Rivers, Crossroads and Autograph.
“Importantly we now have a strong market position that is having a positive impact on financial performance throughout the group,” Evans said.
Addressing shareholders at the group’s annual meeting, chair Richard Facioni tes- tified to a continued poor outlook for the fashion and apparel sector.
Noni B joins other retail chains such as The Reject Shop, Nick Scali, Kogan, Lovisa and Myer in detailing over recent months the dour trading conditions weighing on company sales and earnings.
Mr Facioni said, in the first four months of the new financial year, the “difficult retail environment” continued.
Earlier this year, Noni B sealed a $ 31 million deal to buy the Speciality Fashion brands. Specialty Fashion had also been struggling and sold off the brands to pay down debt and focus on other retail businesses.
Noni B had also inherited some inventory issues when it bought the brands, shareholders heard yesterday.
The group had posted a 431 per cent rise in full- year net profit to $ 17.29 million the past financial year.
It was driven by the acquisition in 2016 of James Packer’s Pretty Girl Fashion Group for $ 75 million, which delivered Noni B more than 350 stores.