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Profits dips for Hallenstein

NZ NewswireNZ Newswire 22/09/2016 Jonathan Underhill

<span style="font-size:13px;">&nbsp;Glassons Australia recorded a loss of $1.9m</span> © SNPA  Glassons Australia recorded a loss of $1.9m Hallenstein Glasson Holdings posted a 21 per cent decline in full-year profit, reflecting a loss from its Glassons unit in Australia and weaker earnings from its flagship menswear chain.

Profit fell to $13.7 million in the 12 months ended August 1, from $17.4m a year earlier, the Auckland-based retailer said , while sales rose 0.9 per cent.

Like most clothing retailers, Hallenstein buys in seasonal stock and relies on predictable weather to ensure customers buy its coats in the winter and beachwear in summer. But in the latest winter season, consumers in both Australia and New Zealand basked in what the company called "record mild temperatures", reducing both sales and margins.

In the first six weeks of the current year, sales are up about 9 per cent, Glassons is recovering and "we anticipate a much-improved profit performance for the current trading period", chief executive Graeme Popplewell said.

The biggest deterioration in the latest year was from Glassons Australia, which recorded a loss of $1.9m, which it blamed on a mild winter and margin pressure, from a profit of $170,000 a year earlier.

It closed two outlets during the year and said "further store rationalisation is under review". At the same time, three stores were refurbished to a new design and more will be changed out to the new format, while two new stores will be opened before Christmas, it said.

Profit at its Hallensteins chain in New Zealand recorded a 4.5 per cent gain in sales but its gross margin contracted which it attributed to the mild winter and a weaker exchange rate, resulting in an 11 per cent decline in profit.

Profit at its Storm chain fell 7.2 per cent to $868,000 while e-commerce sales rose 24 per cent.

It plans to provide a trading update at its annual meeting in December.

The shares last traded at $3.01 and have dropped 11 per cent in the past 12 months.

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