Hallenstein Glasson announced record profits yesterday, but revealed it is suffering growing pains in Australia.
The company reported a net profit of $21.7 million for the year to July 31, up 12.7 per cent on the previous year. Just A$56,000 of that sum came from its 23 Australian stores.
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A$56,000 is a drop from the A$379,000 profit for the year to August 1 last year.
With the Australian results excluded, Hallenstein Glasson's 80 New Zealand stores delivered a profit increase of 15 per cent.
Maquarie Financial Services analyst Warren Doak was not concerned by the progress in Australia and said it was too early to judge the performance in Australia.
The operation was still rolling out and did not yet have the critical mass to deal with start-up costs like staff training .
"It's a proven cookie-cutter business model and there are no surprises. They had started the new Storm stores with two outlets and they increased the gross margin which some might not have predicted," he said.
Women's clothing outlet Storm is pitched above standard retail but below boutiques. It opened its third store in Ponsonby on Wednesday.
Hallensteins Glasson chairman Warren Bell said performance in New Zealand had remained strong in an increasingly difficult retail market.
Group managing director Cliff Kinraid said that since balance date Glassons had opened a new Hallensteins at the Silvia Park retail complex in Auckland, and Glassons was to open stores soon in Whangarei and Queenstown. In Australia the company has 23 Glassons stores but no Hallensteins. Plans were being considered for expanding Glassons in Australia. Hallensteins Glasson Holdings was down 2c yesterday at $5.27.
