Hallenstein Glasson Holdings, the clothing retailer, lifted net profit 26 per cent in the 2017 year as online sales continued to grow.

Sales rose to $239 million in the 12 months ended August 1, from $223.5m a year earlier, the Auckland-based retailer said in a statement. Net profit was $17.3m, ahead of $13.7m the prior year, and within the $17m to $17.5m band it gave in August.

The retailer's fortunes have improved after profit fell by a fifth last year as a decline in the kiwi dollar made imports more expensive, squeezing its margins, while its women's clothing chain Glassons struggled. New chief executive Mark Goddard took over at the helm in mid-April, replacing long-serving Graeme Popplewell who ended 46 years at the company.

Goddard said in a statement that the company's new buying strategy, focus on cost control and a favourable exchange rate led to the profit increase. The first seven trading weeks of the current financial year has seen sales up 5.5 per cent, he said, with online trading continuing to show increased growth. It will update shareholders at the December annual meeting.

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The board declared a 17 cents per share final dividend, up from last year's 16.5 cents, bringing the annual payout to 31.5 cents per share.

Goddard said online sales grew 44 per cent in the year, much faster than brick and mortar stores, and now account for 9 per cent of total turnover. The company will keep investing in technology and resources in the area to maintain that pace of growth, he said.

In New Zealand, Glassons sales rose 7.2 per cent to $89.5m, although the second half was not as strong as the first half. In the year, it opened one shop in the Christchurch CBD and closed an underperforming shop in Auckland's Glenfield. Chief executive Di Humphries resigned earlier this month, and the company said it was searching for a replacement.

In Australia, Glassons sales gained 22 per cent to $50m, which the company said came despite "a particularly tough market for retail" in the country. In the year, it opened three new stores, close three, and refurbished six. It plans to open two new stores in Australia including one in Melbourne's CBD in the current year.

Hallenstein Brothers sales across New Zealand and Australia rose 1.9 per cent to $91.1m. Goddard said the brand had a "much improved second half". In the year, it opened three stores in Australia and said it would monitor the success of those stores to decide on any further rollout. In New Zealand, it opened two stores in Christchurch CBD and Newmarket in Auckland and closed one in Christchurch's The Hub.

Sales dropped 11 per cent to $8.3m in the retailer's Storm brand, which it said was due to a competitive market and "has not been helped by major infrastructure works around three key Auckland stores which has had a material impact on trade." The company closed its single Australian store in the year, which it said improved trading, and opened one in Queenstown.

The shares last traded at $3.18 and have gained 4.4 per cent this year.

Chris Wilkinson from First Retail Group said online growth had been noticeable and necessary.

"At 9 per cent they're slightly ahead of the industry average and their improvements in this area position them well ahead of future competition. This includes the impending arrival of Amazon," he said.

Greg Harford, general manager of public affairs at Retail NZ said the result was really positive news.

"Overall, many retailers are feeling gloomy and are reporting that it is difficult to meet targets, so it's really good news that a key firm like Hallensteins Glassons is performing well," Harford said.

"There is significant growth in online sales across the retail market and its work in the online channel shows that Kiwi firms can prosper in this space," he said.

"Many retailers are preparing for the arrival of Amazon in this part of the world - and it's good to see a local retailer positioning itself well."