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HLG increases profit but economic outlook 'soft'

By Phil Boeyen, ShareChat Business News Editor

Saturday 30th September 2000

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Hallenstein Glasson is warning it expects future sales to be adversely affected by the 'softer' economy despite reporting an increased tax-paid profit for the past year.

The clothing retailer made $11.3 million for the year to the end of August compared with $9.9 million last year, and has declared a 9.5 cents final dividend.

Total sales revenue was slightly higher rising 2% to $160.4 million. Summer and pre-Christmas sales contributed strongly to the first half year's result, but the winter season has proved more difficult
with total sales being only marginally ahead of last year.

The company says sales recently have been adversely affected by higher interest rates and fuel costs and the lower dollar, all of which have contributed to a 'softer' domestic economy. It is also warning that higher prices could be on the way if the kiwi dollar stays at low levels.

Despite the stronger rural economy in New Zealand, HLG says sales have been hampered because of Hallensteins high exposure to the New Zealand rural sector, with 29 of its 56 stores located outside the major cities. Recently The Warehouse claimed it was doing slightly better in provincial New Zealand than in metropolitan areas.

Throughout the year HLG says it focussed strongly on ensuring trading margins were maintained, and that it didn't get itself into an overstocking situation.

The retailer opened two new Glassons stores in Australia last summer, and plans to continue to strengthen its market position with larger stores in Auckland and further testing of the Australian market.

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