AUSTRALIA: Just Group remains cautious despite sales rise
Clothing retailer Just Group said it is in a good position to face the forthcoming Christmas selling period but added that interest rates and cold weather are hurting its sales.
For the first three months of financial 2006, sales grew 4.1% to A$698m. However its caution on future trading caused shares to slump to a two-month low.
Managing Director Jason Murray said during the company's annual general meeting that the upcoming Christmas season would be the key determinate of its half-year finances.
Chairman Jonathon Pinshaw said the market situation was going to be troublesome and pointed out the firm had seen "some margin pressure" but vowed it had "the brands, people, retail machine and overall strategy" to continue to turn out a "superior financial performance" in the medium to longer term.
"Inventory is well controlled for all our brands and we have continued to invest into each brand, into store roll out and into our retail machine," he continued.
Murray added: "We remain interested in acquiring retail brands that are consistent with our portfolio and fits our transaction criteria and will also look to maintain a gearing ratio that reflects the strong cash generation of our business."
Murray confirmed the company had sold off its 4.9% share in the clothing and shoe company Colorado Group following failed brand acquisition discussions.
"Essentially it became an open contest for the whole business - we didn't want to acquire the whole business," he said.
The company added that its South African venture with Pepkor Retail for the Jay Jays brand has been going well and that it is now looking at setting up a 50/50 joint venture with Pepkor.
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