Curtains for Kresta stores as losses bite

BLINDS and awnings retailer Kresta will slash its retail footprint by as much as 15 per cent and close loss-making stores as it fights off ballooning losses.

The decision to close stores comes as the company’s Chinese backers pledge to extend the troubled retailer up to $20 million in loans to support the business.

The looming store closures in Australia and New Zealand follow the nation’s biggest retailer of window coverings and blinds launching a strategic re- view earlier this year.

Following on from the review, the listed Kresta Holdings says it has identified a number of fresh initiatives to improve its profitability.

The strategic review was led by retail industry veteran and consultant Roy Sammartino whose previous roles have included leading Toys R Us in China and, according to information on LinkedIn, currently operates a retail consultancy in Shanghai.

Kresta said as a result of the review, the company had decided to trigger an organisaThe tional restructure that would include the appointment of a group HR manager, consolidate certain financial and payroll teams at the company’s head office in WA and lease under-utilised facilities owned by the company that should generate potential rental income of $1.1 million to $1.3 million a year.

A review of its store footprint had identified a number of loss-making stores and Kresta would evaluate the future of these stores, it said. Kresta has about 30 stores in Australia and New Zealand.

company is overhauling its sales team in a number of initiatives it said would drive an increase in revenue of $3 million to $4 million over the next year.

Half-year accounts show revenue at Kresta slid to $28.2 million for the six months to June, compared with $38.5 million in the previous year. Losses blew out to $14.3 million from $1.89 million.

Kresta trades on the local bourse and is controlled by China’s Ningbo Xianfeng New Material Company.