Rod Duke says the Christmas trading period will be crucial. Sandra Mu / Getty Images
Rod Duke says the Christmas trading period will be crucial. Sandra Mu / Getty Images
KEY POINTS:
Briscoe Group has announced strong rise in third-quarter sales, but chief executive Rod Duke says shrinking sales margins mean the extra revenue might not add to the bottom line.
He said it was not all plain sailing into the crucial pre-Christmas retail market.
The group owns Briscoe Homewarestores and sports retailer Rebel Sport and the results include the first two weeks of trading for its first Urban Loft store in central Auckland.
Sales in the three months to October 29 were up 10.8 per cent from the year before to $81 million. Same-store sales were up 7.1 per cent, with 8.7 per cent for homeware and 4.2 per cent for sporting goods.
Duke said the rise in same-store sales was "satisfactory" given the flat trading environment during August, but that meant the company had to discount through a big sale over Labour weekend to sell surplus stock.
The sale meant a brief reversion to the old format of discounting that resulted in lower margins and higher promotional costs.
"The effect of this and the set-up costs for four new stores and two refurbishments will have an impact on profit at the end of the full year.
"While we are confident of returning a bottom line ahead of last year the amount of the increase will depend on the sales during the crucial Christmas trading period," Duke said.
Overall homeware sales were $43.9 million compared with sporting stores at $26.1 million.
Duke said the opening of the first Urban Loft store had boosted the number of homeware division outlets to 39 and stores in New Plymouth and Panmure had been relocated.
The sports division grew to 25 with a new Rebel Sport store in New Plymouth and a sports outlet store in Northcote, in Auckland's North Shore.
Briscoe homeware stores in Napier and Wellington were being refurbished and new Rebel Sport stores were planned for Hamilton and Napier.
Duke would decide the rollout for the new Urban Loft stores at Easter.
More immediately he was looking at quarterly results for other companies such as The Warehouse to assess signs about the pre-Christmas sale environment.
Guy Hallwright of Forsyth Barr said that retail sector was still holding firm but agreed with Duke that the retail environment for October was slightly weaker than it was last year.
