Blokey rebrand pays off in Hallensteins result
CLOTHING retailer Hallenstein Glasson has defied the sluggish apparel market with a 40 per cent profit increase for the first half of the year, which analysts say it could herald better fortunes for others.
Shares in Hallenstein Glasson jumped 15 cents or 4.6 per cent to $3.38 in mid-afternoon trading on the profit rise to $8.6 million after tax for the six months to February 1. Sales income rose by 4 per cent to $110.8m.
The profit was slightly better than even the company forecast, and followed a bad year in which unseasonal weather and bad buying decisions shaved 23 per cent off the group’s annual profit.
Chief executive Graeme Popplewell said the turnaround had come in December and January, a critical trading time, and the momentum appeared to be carrying into winter.
The best performer was menswear chain Hallensteins, which regained market share with better clothes and innovative marketing. Its sales lifted 5 per cent and net profit rose by over 50 per cent.
Womens fashion chain Glassons was also strong in Australia but lagged in New Zealand during the first four months of the period until it too experienced better Christmas trading.
The company has yet to find a replacement for former Glassons chief executive Tracy Shaw who resigned in August.
Its sister chain, Storm, saw profits rise by 20 per cent on flat sales.
Analyst Chris Byrne of Craigs Investment Partners said it really was ‘‘a story of two businesses’’.
‘‘If you look at the Glassons womenswear, its earnings are down quite significantly and I think women’s apparel is tough. But Hallensteins menswear has gone very well.’’
It was also a sign others in the sector.
‘‘The key point is that we’ve had two terrible winters in a row where it’s been very warm and that’s led to a lot of discounting. So
of hope
for if you get a normal – as much as normal is these days – winter, you’d suggest there should be some upside there for most of the retailers including Hallensteins.’’
Recent results from other apparel retailers would indicate that they are not out of the woods yet.
On Tuesday Kathmandu posted a first half loss of $1.8m compared with a profit of $11.4m a year earlier blaming late winter discounts trading.
Pumpkin Patch had a better Christmas but after ‘‘reorganisation costs,’’ its profit after tax was just $700.000, albeit better than the $100,000 it produced last year.
Byrne said part of Hallensteins’ success was its ‘‘excellent’’ rebranding job.
Lachlan McPherson, the creative director behind Hallensteins Brothers’ latest campaign, said the ads showing a group of young men on holiday in Cuba and motorbiking a la Burt Munro on the salt flats of Utah seemed to be working for them.
It was ‘‘the notion of brothers being a way of emotionally engaging with Kiwi males’’.
McPherson said the ads were targeting a younger market ‘‘but they’ve been connecting on a level that all males can relate to, which is the notion of having great, strong friendships’’.
Shareholders in Hallenstein Glasson will receive a dividend of 14.50c per share, up from 12c last year.
and
weak
Christmas