NEW ZEALAND: Hallenstein Glasson Q1 sales hit by women's wear
New Zealand clothing retailer Hallenstein Glasson Holdings says it has experienced a "difficult" first-quarter, with the majority of declines being felt in its women's wear businesses.
Chairman Warren Bell told shareholders at a meeting yesterday (11 December) that sales for the August to 8 December period are down 7% on last year. He said this demonstrated how "competitive" the environment is in the apparel fashion sector.
The comments came after Hallenstein warned in its trading update last month that first-half profit would not match the same period last year.
Bell told attendees yesterday: "It is extremely difficult to forecast those results, but suffice to say if the current trading trends continue we will not recover any of the lost ground experienced for the season thus far.
"Our forecast of a 20% decline in profits will come under pressure if sales do not improve to above last year's level over the balance of the summer season."
An update is expected in January 2014 once results for Christmas and post-Christmas sales are known, he noted.
CEO Graeme Popplewell added that the company had experienced a "very challenging" summer period after booking an 11.2% fall in full-year profit.
He said there were "a number of external factors that [were] our outside our control". In particular, he pointed to the impact of the internet, which he said has driven "what can only be described as a fundamental structural change in retail as we know it".
The impact of e-commerce on the business, he said, was a "double-edged sword".
"We have grown our own sales on the web over the past two years from a very small number to now almost 5% of our turnover."
However, he added: "I don't want this to sound like sour grapes, but we are competing with an e-commerce world where profit margins are low or non-existent, and competition for market share is the name of the game."
Nonetheless, Popplewell said he believes the company's web business will continue to show "solid growth". "Even though it does not have a presence on the ground, a significant proportion of Hallensteins sales on the web come from Australia and we will continue to target that market."
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