Thursday 12th December 2013
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Hallenstein Glasson Holdings, the clothing chain, may have to cut its profit guidance further if sales don't improve in the summer season, chairman Warren Bell says.
Last month the Auckland-based retailer cut its guidance for first-half profit to $8 million in the six months ending Feb. 1, 23 percent lower from a year earlier, and may have to trim it further if it can't improve its sales through the summer season, Bell told shareholders at today's annual meeting.
"We are now at the 'business end' of the season and the success or otherwise of the next few weeks will have a significant influence on our first half profit," Bell said. "Our forecast of a 20 percent decline in profits will come under pressure if sales do not improve to above last year's level over the balance of the summer season."
Last month, government figures showed a slump in consumer spending on apparel in the September quarter, with retail sales of clothing, footwear and accessories sliding 6.8 percent in the three months ended Sept. 30, the biggest quarterly fall since the series began in 1995.
Chief executive Graeme Popplewell told shareholders the retail sector is undergoing a fundamental change in business models with more purchases being made over the internet, which has grown to become 5 percent of the company's turnover in the past two years.
"We can't measure how much business we are losing to international brands and to pure play web sites however it would be naïve to suggest there is no impact," Popplewell said. "What we do know is that the failure of the tax system in both New Zealand and Australia to collect GST from sales made by international web sites to our customers puts us at a clear disadvantage."
The shares fell 2.3 percent to $3.81, and have slumped 26 percent this year.
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