Fashion firm feels the 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 the fashion and apparel category, is 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.

The latest profit warning from a retailer is just three weeks after the end of Christmas and comes at a time when retail businesses should have full coffers and cash registers from brisk Christmas, Boxing Day and new year sales activity.

But 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, with its women’s apparel category particularly squeezed over Christmas.

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 after its sales trajectory turned sharply negative.

PAS was founded in 2004 and has built up a number of fashion brands such as Yarra Trail, Marco Polo, Breakaway and Metalicus.