Steady plodder becomes a market darling

Friday 6th December 2002

Somebody at AMP must be feeling pretty smug about his pick of clothing retailer Hallenstein Glasson.

By July last year the fund manager had built up a 15.8% stake on a strong rising trend in the share price. It has since sold down gradually to 7% but the price is still at all-time highs.

Up until 1998 the company was a sluggish Stock Exchange performer and the reasons for its dramatic re-rating aren't exactly clear. Net profit has risen from $9.5 million that year to $11.4 million last year but has been flat for two years.

The company has built its store chain steadily.

In New Zealand it now has 49 Hallensteins men's clothing stores and 31 Glassons women's stores. The HBK children's clothing chain didn't work out and it was converted to HBK Girl catering to the 6 to 14-year-old market, with 15 stores.

As with many companies, expansion into Australia has proved hard going. The company now has 12 Glassons and four Hallensteins stores in Victoria and New South Wales but in the August year they "did not meet budget expectations" because of establishment costs and "extremely difficult trading conditions."

The company will have an unchanged 0.4% weighting on the new NZSE50 index despite the exclusion of former managing director Tim Glasson's 20.4% stake.

With annual revenue of $175 million, Hallenstein Glasson is dwarfed by The Warehouse but with the takeover of Arthur Barnett it's now the only listed specialist fashion retailer.

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