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sass & bide in 48% profit jump

Sydney Morning Herald logo Sydney Morning Herald 1/05/2014 Eli Greenblat
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Australian fashion label sass & bide has successfully fended off the invasion of foreign retail giants such as Spanish fast-fashion giant Zara and Topshop and a slew of online competitors like ASOS to post a robust 48 per cent rise in full-year net profit to $7.68 million.

sass & bide, wholly owned by the nation's biggest department store Myer which recently bought the business for $72.3 million, has also benefited from an expansion of the label's freestanding and concession store network as well as a push into new product ranges such as intimate apparel.

Founded 15 years ago by friends Sarah-Jane Clarke and Heidi Middleton, sass & bide has proved incredibly resilient through the global financial crisis, the explosion in online retailing and the arrival on Australia's shores of hordes of well-known overseas retail brands such as Zara, Topshop, GAP and others.

According to documents obtained by Fairfax Media, sass & bide recorded total sales of $60.548 million for the 12 months to July 27, 2013, up 18 per cent against revenue of $51.278 million recorded in 2012. In 2009-10 sass & bide had sales of $37 million, with the group's turnover set to double in the space of the last four years. Between 2011 and 2013 sass & bide is estimated to have boosted sales by 45 per cent and profit by 112 per cent.

The profit was similarly strong, up 48 per cent to just under $8 million.

According to sass & bide's financial documents it paid a dividend of $7 million.

The most recent performance by sass & bide comes as many retail brands face tough trading conditions brought on by intense competition in the sector from overseas and online stores and a general pull back in consumer spending and confidence.

It is also especially heady when compared to its owner Myer, which recently posted an 8 per cent slide in first-half profit for fiscal 2014, and its arch rival upmarket department store David Jones, which is also facing shrinking profits and stagnant sales.

Myer paid $42.3 million for a two-thirds stake in the high-end sass & bide fashion label in 2011, later paying another $30 million last year to acquire the remainder of the business. Myer said at the time of its initial purchase of a stake in sass & bide that the price represented less than six-times fiscal 2011 earnings before interest, tax, depreciation and amortisation, or seven times historical earnings.

sass & bide founders Ms Clarke and Ms Middleton are still involved with the fashion label they founded but have taken a step back in terms of boardroom direction and oversight.

Recently Christopher Colfer was appointed chief executive of sass & bide, having worked across a range of industry sectors including luxury goods, fashion, technology and fast moving consumer goods including roles as CEO at global luxury goods company Alfred Dunhill (UK) and a leading role with Swiss-based Richemont International which owns Cartier, Montblanc and Net-a-Porter.

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