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Hallenstein Glasson expecting a better first-half

Wednesday 8th February 2012

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Hallenstein Glasson, the clothing retail chain, expects first-half earnings to be a quarter higher than last year, and plans to put more emphasis on its digital store strategy.  

The Auckland-based company’s net profit was between $8.7 million and $9 million in the six months ended Feb. 1, with sales up 7.9 percent at $108.6 million. It plans to release its complete results on March 28.

Record Christmas sales and a strong January underpinned the chain’s New Zealand performance, and while there were improvements in across the Tasman, “there is still some way to go in Australia before we can return to a level of profitability acceptable to the board.”

The retailer is reviewing its store portfolio as shopping centre landlords continue to lift rents annually, and wants to grow its online presence.

“Strong progress has been made over the past six months in growing our sales on the internet,” the company said. “We will continue to give strong focus to our digital stores which will clearly become an increasingly significant part of the business.”

Like other retailers, Hallenstein has had to contend with tepid consumer demand as households focus on repaying debt. That’s forced stores to discount prices in a bid to bring customers in.

The chain’s Glasson sales rose 7 percent in New Zealand and 13 percent in Australia, while Hallenstein sales gained 5 percent. Storm brand sales advanced 26 percent, and were up 7 percent on a same-store basis.

Hallenstein’s gross margin on sales rose to 57.1 percent from 56.6 percent in the prior period.

The shares fell 0.3 percent to $3.55 in trading yesterday, and are up 1.7 percent this year.


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