Hallenstein profit leaps
Retailer’s online sales grew 44pc in the year
Hall enstein Glasson Holdings, the clothing retailer, lifted net profit 26 per cent in the 2017 year as online sales continue to grow. Sales rose to $239 million in the 12 months ended August 1, from $223.5m a year earlier, the Auckland-based retailer said. Net profit was $17.3m, ahead of $13.7m the prior year, and within the $17m to $17.5m band it gave in August.
The retailer’s fortunes have improved after profit fell by a fifth last year as a decline in the kiwi dollar made imports more expensive, squeezing its margins, while its women’s clothing chain Glassons struggled. New chief executive Mark Goddard took over at the helm in mid-April, replacing l ong- serving Graeme Popplewell who ended 46 years at the company.
Goddard said the company’s new buying strategy, focus on cost control and a favourable exchange rate led to the profit increase. The first seven trading weeks of the current financial year had seen sales up 5.5 per cent, he said, with online trading continuing to show increased growth.
It will update shareholders at the December annual meeting.
The board declared a 17c per share final dividend, up from last year’s 16.5c, bringing the annual payout to 31.5c per share.
Goddard said online sales grew 44 per cent in the year, much faster than brick and mortar stores, and now account for 9 per cent of total turnover. The company will keep investing in technology and resources in the area to maintain that pace of growth, he said.
In New Zealand, Glassons sales rose 7.2 per cent to $89.5m, although the second half was not as strong as the first half. In the year, it opened one shop in the Christchurch CBD and closed an underperforming shop in Auckland’s Glenfield.
Glassons chief executive Di Humphries resigned earlier this month, and the company said it was searching for a replacement.
In Australia, Glassons sales gained 22 per cent to $50m. In the year, it opened three new stores, closed three, and refurbished six. It plans to open two new stores in Australia including one in Melbourne’s CBD in the cur- rent year. Hallenstein Brothers sales across New Zealand and Australia rose 1.9 per cent to $91.1m. Goddard said the brand had a “much improved second half”.
In the year, it opened three stores in Australia. In New Zealand, it opened two stores in Christchurch CBD and Newmarket in Auckland and closed one in Christchurch’s The Hub.
Sales dropped 11 per cent to $8.3m in the retailer’s Storm brand, which “has not been helped by major infrastructure works around three key Auckland stores”. The company closed its single Australian store in the year, and opened one in Queenstown.
The company’s shares closed up 15c yesterday at $3.33.
Chris Wilkinson from First Retail Group said online growth had been noticeable and necessary.
“At 9 per cent they’re slightly ahead of the industry average and their improvements in this area position them well ahead of future competition. This includes the impending arrival of Amazon,” he said.
Greg Harford, general manager of public affairs at Retail NZ said the result was positive news.
“Overall, many retailers are feeling gloomy . . . so it’s really good news that a key firm like Hallensteins is performing well.” —