Hallenstein Glasson half year profit falls 16.5%

Thursday 24th March 2011

Clothing retailer Hallenstein Glasson's half year net profit fell 16.5% to $7.14 million, as sales for Glassons in this country and Australia were weaker than expected in the key Christmas trading period.

Revenue for the six months to February 1 dropped 1.7% from a year earlier to $100.61 million.

Chairman of directors Warren Bell said Glasson sales during Christmas were critical to the company's profit and in the latest period it had struggled to achieve targets.

Competition had been particularly intense in women's apparel and the company had to meet the market to ensure inventory levels remained under control, Bell said.

At the end of the summer season inventories were $14.25 million, compared with $13.57 million last year.

Both Hallensteins and Storm had traded well during the Christmas period and their results reflected that.

Cash reserves reduced during the period from $34.94 million to $20.18 million, with a significant portion of that due to changes in terms of supply with some key offshore suppliers, the company said.

Volatility in cotton prices meant that in order to secure fixed contracts on future orders suppliers had to be paid earlier than in the past.

The company's interim dividend is unchanged at 14c per share.

While the $8.35 million being paid out in dividends was $1.21 million higher than profit after tax for the period, it could be comfortably managed given the group's cash reserves, the company said.

NZPA

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