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Black back in fashion at Country Road

By Phil Boeyen, ShareChat Business News Editor

Thursday 10th August 2000

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Clothing and homeware retailer Country Road has returned to profit for the first time in three years.

The company has announced profit before tax for the year of A$3.3 million, representing a turnaround of A$5.9 million on the previous year's A$2.6 million dollar loss.

All markets in which the company operates - Australia, New Zealand and the United States - returned a profit. Stores in New Zealand went from loss of A$0.964 million to a profit of A$415,000.

While sales for the group were flat on the previous year the company says that performance must be seen in context of stock levels, which were 13% lower than the previous year and 23.4% lower than two years ago. In both those years substantial markdowns were necessary to clear excess stocks.

Country Road says an anticipated uplift from the GST introduction in Australia did not materialise until very late in June.

The company says operating costs have been well controlled, and reduced inventory levels have resulted in better stockturn and a reduced requirement for funding which saw the company end the year with a strongly positive cash flow.

Country Road chairman, Mac Drysdale says while the last two years have seen a considerable turnaround the company still has plenty of work to do to return to satisfactory levels of profitability.

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