Hallenstein Glasson finds retail demand tightening

Tuesday 7th December 2010

Clothing retailer Hallenstein Glasson Holdings found retail demand tightening in the past two months.

Chairman Warren Bell told the company's annual meeting today that the first two months of the 2011 financial year, starting August 2, had growth of 5%.

But that improvement had been eroded so that sales for the whole August to November period were now flat compared to last year.

In Australia, the environment was becoming increasingly competitive, and a recent lift in interest rates was followed by an immediate dampening of consumer demand.

"The market is extremely competitive and margins are being put under pressure as competitors discount stock to retain market share," Mr Bell said.

In this country, demand peaked before the October 1 rise in GST, and then gradually fell away.

As in Australia, the company was having to compete aggressively to maintain market share.

"The momentum achieved over the past year will be extremely difficult to maintain, and the opportunity to further improve sales and margin on the existing business base is now far more challenging."

The December trading period was a significant proportion of the summer season and any projection at this stage would be premature. A further update would be given after the Christmas trading period.

For now Hallenstein Glasson's profit was marginally ahead of last year, but December was the "make or break month".

For the year to August 1, the company reported a 59.7% rise in earnings before tax on normal business activity to $29.2 million, on group sales up 4.5% to $207.1 million.

NZPA

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