Hal­len­stein Glas­son dressed for suc­cess

Bay of Plenty Times - - BUSINESS -

Hal­len­stein Glas­son Hold­ings has con­firmed an­nual profit rose 58 per cent as ex­pected.

The re­tailer said sales at Glas­sons and Hal­len­stein Brothers cloth­ing chains lifted 7.2 per cent in the first eight weeks of this fi­nan­cial year as it fo­cused on im­prov­ing its buy­ing, speed-to-mar­ket, cus­tomer ser­vice and ex­pand­ing its net­work.

Un­der the ste­ward­ship of new chief ex­ec­u­tive Mark God­dard, who took over in April last year, the re­tailer sold its un­prof­itable Storm re­tail chain in April and is fo­cus­ing its ef­forts on ex­pand­ing its two ma­jor brands across New Zealand, Aus­tralia, and on­line.

It con­firmed that profit in the year to Au­gust 1 was $27.4 mil­lion, in line with its fore­cast last month for profit of $27.1m to $27.6m. An­nual sales rose 16 per cent to $277.6m.

“The buy­ing strat­egy, in­vest­ment in dig­i­tal and the im­prove­ments in cus­tomer ser­vice and ex­pe­ri­ence that were im­ple­mented in 2017 have sup­ported sales and mar­gin growth,” the com­pany said. “Com­bined with tighter cost con­trol, this has in turn led to sig­nif­i­cant net profit growth. Whilst the trad­ing en­vi­ron­ments re­main tough in . . . New Zealand and Aus­tralia, our brands have re­sponded and adapted to these con­di­tions to de­liver the strong re­sult.”

It will pay a 24 cent fi­nal div­i­dend on De­cem­ber 17, tak­ing the an­nual div­i­dend to 44 cents, ahead of 31.5 cents the pre­vi­ous year.

The com­pany’s shares rose 5.5 per cent to $5.93, hav­ing gained 42 per cent so far this year.

In its largest busi­ness, the Glas­sons wom­enswear brand, an­nual profit in New Zealand rose 31 per cent to $10.6m as sales lifted 8.1 per cent to $96.7m. It ren­o­vated its Queen­stown and Queens­gate stores to a new con­cept de­sign and closed an un­der­per­form­ing store in Hen­der­son.

So far this fi­nan­cial year it has re­fur­bished its Dunedin store and has other re­fur­bish­ments planned, it said.

Mean­while, profit at Glas­sons Aus­tralia jumped to $8m from $1.4m as sales surged 57 per cent to $78.4m. It opened new stores in Mel­bourne Cen­tral and Charlestown, while War­ringah and Cherm­side were re­fur­bished in line with its new con­cept. It re­cently re­fur­bished stores in Bondi, High­point and Par­ra­matta and said it has more re­fur­bish­ments planned, along with store open­ings in The Glen and Liver­pool and oth­ers un­der con­sid­er­a­tion.

Its menswear brand Hal­len­stein Brothers in­creased profit 19 per cent to $8.9m as sales lifted 6.4 per cent to $96.9m.

It re­fur­bished its Queen­stown store in line with a new con­cept and closed two small un­der­per­form­ing stores.

Its three Hal­len­stein stores in Aus­tralia have per­formed “steadily” and the com­pany said it re­mains pos­i­tive about the op­por­tu­nity that ex­ists for the brand in that mar­ket.

Fur­ther in­vest­ment in stores is planned for the cur­rent fi­nan­cial year as well as an ex­ten­sion to the dis­tri­bu­tion cen­tre to ac­com­mo­date the growth in on­line sales, it said.

The di­vested Storm chain re­ported a loss of $732,000 com­pared with a loss of $313,000 in the 2017 fi­nan­cial year. It didn’t dis­close the sale price, which it said wasn’t sig­nif­i­cant.

“The group’s fo­cus is on ex­pand­ing its other two much larger fash­ion brands, namely Glas­sons and Hal­len­stein Brothers in both New Zealand and Aus­tralian mar­kets,” the com­pany said.

“The group con­tin­ues to im­prove and build on its buy­ing strate­gies, speed-to-mar­ket, and cus­tomer ser­vices.”

On­line sales grew 64 per cent and now rep­re­sent 13 per cent of group turnover, the com­pany said.

“We will con­tinue to in­vest in tech­nol­ogy and re­sources to build mo­men­tum in this strate­gic area of the busi­ness into the fu­ture,” it said.

“Strate­gic in­vest­ment con­tin­ues in dig­i­tal, as well as in new and re­fur­bished stores. Cus­tomers have re­acted pos­i­tively to new sea­son stock and web sales con­tinue to grow.”

The com­pany said it was fo­cused on de­liv­er­ing a “strong per­for­mance” go­ing into Christ­mas trad­ing, and it will pro­vide an up­date at its an­nual meet­ing of share­hold­ers in De­cem­ber.

Mark God­dard took over as chief ex­ec­u­tive of Hal­len­stein Glas­son last year.

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