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Profits leap at Hallenstein Glasson

Clothing retailer Hallenstein Glasson has seen full-year profits leap almost 53% as profit margins improved – particularly across the Glassons clothing chain.The operator of the Hallensteins, Glassons and Storm retail chains this morning revealed a

Georgina Bond
Mon, 27 Sep 2010

Clothing retailer Hallenstein Glasson has seen full-year profits leap almost 53% as profit margins improved – particularly across the Glassons clothing chain.

The operator of the Hallensteins, Glassons and Storm retail chains this morning revealed a net profit of $19.6 million for the year to August 1, up $6.8 million or 52.9% on the same time last year.

Pre-tax earnings on normal operations rose 59.7% to $29.2 million, compared to the same time last year.

Group sales rose 4.5% to $207.2 million, from $198.2 million.
Earnings were particularly strong in the second half of the year, rising 62.5% between February and July, due to better profit margins.



Chairman Warren Bell said the stronger New Zealand dollar was a key factor in driving better profit margins and an improved product offering and buying regime had reduced the need to clear unwanted stock.

“This is particularly evident in Glassons, where real gains in margin have been achieved as a direct result of delivering to the market a more acceptable product offering.

“Our stock levels have been particularly well controlled and in a a difficult retail environment our continued ability to closely manage the business has delivered credible results.”

Mr Bell said all the brands had performed strongly and the Australian branches were now contributing to group results – with a pre-tax profit of $1.5 million compared with the previous year’s loss of $1.3 million.

Although the new financial year had started well, with group sales for the first seven weeks up 5% on last year, Mr Bell said the momentum would be hard to maintain.

“The retail environment remains challenging and we do not see any significant improvement in the near term.

Competition was heightened in Australia as rising interest rates dampened consumer spending.

“In New Zealand the future outlook is clouded by a GST increase, with an unknown contra effect from decreased personal tax,” he said in a statement.

“The momentum achieved over the past year will be extremely difficult to maintain and the opportunity to further improve sales and margin on the existing business base will be far more challenging.”

The net profit result included a one-off tax charge of $852,000, due to new rules on depreciation on buildings introduced in the May budget.

Hallenstein Glassons will pay a final dividend of 17 cents a share.

Georgina Bond
Mon, 27 Sep 2010
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Profits leap at Hallenstein Glasson
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