Woolworths, the Australian supermarket and consumer electronics retailer, pulled a bigger management fee from its New Zealand Dick Smith stores in the 2011 year even as earnings halved.
Dick Smith paid $5.9 million in management charges to its parent in the year ended June 26, up from $4.9 million in the previous year, according to financial statements lodged with the Companies Office.
The New Zealand Dick Smith chain also paid higher interest fees to Woolworths of $922,000, up from $542,000.
The fatter fees for Woolworths came as the electronic goods retailer reported a 5.6 per cent decline in sales, to $321.8 million, with earnings before interest and tax slumping 48 per cent to $5.6 million. Net profit was $3.6 million, down from $7.1 million.
In August, Woolworths reported the decline in sales and earnings in its group annual report, and said the business "continues to be challenged with the weak economic environment impacting discretionary retailers together with strong price competition and significant price deflation." That trend continued in the September quarter, with the New Zealand Dick Smith stores reporting a 4.8 per cent decline in sales, to $80 million.
The value of electrical and electronic goods sold has struggled to keep pace with volumes as retailers have cut prices in a bid to move stock.
Government data showed the value of sales rose 1.2 per cent to $663 million in the three months ended September 30, lagging behind the 13 per cent volume growth over the same period.