Kirkcaldies facing tough year - managing director
Retailer Kirkcaldie & Stains is facing another "tough year" as it tackles earthquake strengthening and low consumer confidence, its managing director says.
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Retailer Kirkcaldie & Stains is facing another "tough year" as it tackles earthquake strengthening and low consumer confidence, its managing director says.
John Milford was speaking at the company's annual general meeting last night in Wellington.
"We believe that the year ahead will also be a tough year for retail which will be exacerbated by further government cutbacks which have recently been announced ... we believe consumers will remain cautious," he said.
Prime Minister John Key wants to streamline the public service to cut costs and improve efficiency.
Mr Milford said government spending cuts would have a large impact on Wellington, which was so dependent on the government sector, he said.
Last year's difficult retail environment forced many retailers in the department store's vicinity to close, Mr Milford said.
He said Kirkcaldie & Stains sales were down almost 5% in 2010 compared to the previous year.
Mr Milford forecast a full year pre-tax profit of around $500,000, compared to last year's $1.3 million.
The projected reduction in profit was largely based on the cost of redeveloping and earthquake strengthening the Harbour City Centre building on Wellington's Lambton Quay, owned by the group's property company.
The work is reported to cost about $5.5 million.
The group was also discounting the rent of retailer Country Road, which had a flagship store in the building, due to construction work.
In March this year, the company condensed the retail space that Kirkcaldie and Stains occupies in the Harbour City Centre and refitted the cuisine and homeware departments.
The company has previously said it has 15 years to complete the earthquake strengthening of the building but it has chosen to undertake the work in conjunction with the refurbishment of Country Road.
It had re-signed Country Road to a long-term lease and added Contact Energy as another key lessee.
However, Mr Milford expected the Rugby World Cup 2011 and iconic Wellington events including the World of Wearable Arts to boost sales.
The company reported an after tax loss of $1.9 million for the year ending August 31, 2010, largely influenced by tax changes to building deprecation in the May budget.
NZPA and NBR staff
Wed, 16 Feb 2011
Wed, 16 Feb 2011
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Kirkcaldies facing tough year - managing director
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