AUSTRALIA: Oroton H1 profit edges up on rising sales
Australian retailer Oroton saw first half profit edge up on the back of of rising sales and gains from exiting its Ralph Lauren licensed business.
The company said that first half net profit grew 2.1% to AUD16.4m (US$17.1m) from AUD16.1m in the same period of the prior year.
Revenue grew 2.4% to AUD101.5m, with like-for-like sales flat over the period.
"Our International investment and roll out in Asia continues to be a key strategic focus. We have committed to two new Oroton stores in Hong Kong and Shanghai, China with both expected to open in Q1 FY14. This will take Oroton's total Asian store portfolio to nine," said CEO Sally Macdonald.
"In addition we are pleased to announce that we have signed a distribution agreement with a Dubai based company for at least six Oroton stores to open in the UAE and Qatar region over the next five years. The first store/s are planned to open in FY4 in Dubai and/or Abu Dhabi."
The Ralph Lauren licence is set to expire on 30 June and will not be renewed beyond that date. In February, the two companies signed an asset purchase agreement confirming Ralph Lauren's obligation to purchase inventory and store assets as well as providing for employment of retail store team members and transition of lease arrangements as at the end of June 2013. In addition, the agreement provides for a payment by Ralph Lauren to OrotonGroup of US$1.5m, Macdonald said.
Macdonald added that the outlook for the remainder of the year is "cautious in what is a subdued retail environment undergoing increased global competition and price restructuring".
Looking forward, the company's strategy remains focused on the long-term brand development of Oroton through multi-channel retailing and international expansion.
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