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Briscoe sales fell 2.3% last quarter as margins pressured

Monday 4th August 2008

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Briscoe Group, owner of the homeware, Rebel sports, Living & Giving and Urban Loft outlets, said sales fell 2.3% in the second quarter as retailers cut prices, eroding margins.

Sales fell to NZ$91.7 million in the 13 weeks ended July 27, from NZ$93.8 million in the same quarter of 2007, Briscoe said in a statement. Same-store sales fell 5.3%.

"Trading conditions continued to be challenging during the second quarter and the high level of promotional activity in the market has kept pressure on margins," managing director Rod Duke said.

Retailers have lowered their earnings forecasts amid a slump in consumer confidence as household costs, especially for fuel and food, soared. The central bank cut its benchmark interest rate on July 24 and said more reductions may follow, which may help reduce consumer borrowing costs.

Duke said July sales were "more buoyant" than in the previous two months, exceeding the company's expectations, meaning first-half profit will be at the top end of its NZ$2 million to NZ$3 million forecast range.

Revenue in the first half fell 4.4% to NZ$190.3 million. Homeware sales fell 1.8% and sporting good sales fell 9.8%, the company said.

Briscoe announces its first-half results on September 5.

The retailer's shares fell 18% in the past three months and were at NZ$1.03 on Friday.

By Jonathan Underhill

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