Hallenstein first-half profit falls 20% as competition, lower currency crimp margins

Friday 5th February 2016

Hallenstein Glasson Holdings, the clothing retailer, said profit declined about 20 percent in the first-half as a weaker New Zealand dollar and competition crimped margins.

Profit was probably between $6.6 million and $6.9 million in the six months ended Feb. 1, down from $8.6 million a year earlier, the Auckland-based retailer said in a one-page statement. Sales edged up 1.3 percent to $112.4 million, and increased 2 percent in the key trading month of December, it said.

"Gross margin for the period is almost 4 percentage points below the same period last year due to the lower exchange rate and also to competitive influences," the company said.

A weaker kiwi dollar means the company has to pay more for clothing imported from manufacturing countries such as China. The kiwi dollar has fallen about 8.5 percent against the greenback, the transacting currency for many offshore purchases, in the past year.

Hallenstein Glasson reduce its first-half dividend to 13.5 cents per share, from 14.5 cents last year.

The retailer, which operates the menswear chain Hallensteins and the women's fashion brand Glassons, will publish its full earnings on March 23.

Its shares last traded at $3.22 and have slipped 6.1 percent in the past year.

BusinessDesk.co.nz

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