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Slowing sales trend for Bendon

By Phil Boeyen, ShareChat Business News Editor

Thursday 30th November 2000

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Apparel manufacturer Bendon (NZSE: BEN) is forecasting a further sales slowdown after a quieter than expected October and November but is advancing plans to launch its products in the United Kingdom.

Bendon recorded an interim profit of $21.9 million for the six months to the end of September compared with $1.6 million last year, including a $28 million net profit on the July sale of its China Clays business.

The company says a 38% increase in earnings before interest and tax for its core Bendon intimate apparel business is the significant feature in the interim result, rising to $1.63 million from $1.18 million last year.

It says the ebit result was achieved on steady revenues, with the company focusing on retaining quality turnover and maintaining market share in the target markets.

In New Zealand the chain of Bennett & Bain retail stores has helped to maintain market share while contributing to profit, and the company says there has been a continuing emphasis on containment of costs and the sourcing product from offshore at the best possible price to maintain margins and generate a better bottom-line result.

Overseas sourcing and tight inventory control also helped the company reduce stock levels to $19.7 million from $23.3 million last year.

Bendon has also done considerable work on plans to launch its intimate apparel range in the UK market and partnership arrangements are close to being finalised, with further announcements due early next year.

However in the Australasian markets the outlook is less than rosy, especially following the failure of the Australian market to recover post the introduction of GST, and the company says it does not see an early turnaround to slower-than-expected October and November sales.

On the back of the tougher outlook the company says earnings for the second half of the year will be similar to last year.

An interim dividend of 5 cents a share has been declared.

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