Retail business Oroton Group warned first-half earnings were likely to decline by up to AUD3.5m (US$2.9m) on last year, thanks to lower sales and higher than expected levels of discounting at Christmas.

The company said sales had fallen thanks to its focus on margin generation, using fewer discounts than in the past, but added that earnings would also be impacted by a potential onerous lease provision on a recently closed store in Hong Kong, as well higher than expected startup costs for Brooks Brothers.

Updating on Christmas trading, Oroton CEO and managing director Mark Newman highlighted a stronger second quarter for the Oroton brand, but added that this was not enough to make up for lower earnings in the first quarter.

And he added: “Overall, all brands operated in a heavily and greater than anticipated discounted pre- and post-Christmas period.”

Brooks Brothers’ figures had been impacted by higher startup costs and a delayed launch for its online store, as well as a higher factory outlet sales mix, Newman said.

He said the company now expected first half earnings to fall short of last year by AUD2.5-3.5m, or AUD1.5-2.5m on an underlying basis, excluding Brooks Brothers.

Meanwhile, Oroton Group also announced the appointment of Vanessa De Bono to the position of group CFO, joining in April this year from her current post as CFO of Louis Vuitton China.