Hallenstein Glasson Holdings half-year earnings down almost 4%, dividend cancelled

The retail company's margins were down 1.5 per cent in the six months to February 1. Photo / Jason Oxenham

Hallenstein Glasson Holdings earnings for the first-half of the financial year decreased by almost 4 per cent. It has since activated its pandemic management programme and applied for the Government's wage subsidy scheme to manage ongoing disruption.

The retailer with operations in both New Zealand and Australia posted a net profit after tax of $15.44 million, down 3.8 per cent on the $16m it posted a year earlier.

In the six months to February 1, the company made total sales of $160.2m, up 5.7 per cent compared to the same time last year, with gross margins down about 1.5 per cent in the period.

The results were in line with its guidance issued to the NZX on February 17.

Hallenstein Glasson's says it will not pay an interim dividend due to uncertainty around the impact of Covid-19.

Sales in the company's womenswear retail chain Glassons were up 5.3 per cent to $54m in New Zealand compared to $53.9m, up 10.9 per cent, in Australia.

Sales at menswear chain Hallenstein Brothers were up marginally to $52m in the six months of the year.

The company says its investment into e-commerce saw its online sales grow to now account for 15 per cent of group sales.

"As a business, we remain focused on continued investment in digital and social channels," group managing director Mary Devine said in a statement released to the NZX.

"Glassons New Zealand, Glassons Australia and Hallenstein Brothers now all have larger fulfilment centres to allow for continued online growth."

In the statement, Devine said sales in the first seven weeks of the company's second-half were up 3.8 per cent prior to disruption from Covid-19 setting in.

The company's physical and online stores are now closed as part of the Government's move to Alert Level 4 Covid-19 lockdown to help stop the spread of the virus. Hallenstein Glasson closed its stores on March 26, but its web store in Australia continues to operate.

"This has resulted in an unprecedented level of uncertainty and it is challenging to forecast the extent of these events on the business," she said.

"The Group has applied for the New Zealand government wage subsidy scheme in order to support employees wages during this uncertain time."

Devine said the group's pandemic plan would reshape the business during the evolving situation. This includes reducing operating and labour costs, managing inventory levels and putting capital projects on hold.

"The Group will continue to follow advice and monitor the situation closely to ensure an agile approach to reduce the adverse impact on trading and protect our team and customers."

When contacted by the Herald, Devine refused to comment on the company's results or outlook for the rest of the year.