Kirkcaldie's expect $400,000 six-month loss, break even for year

A clearance sale to offload excess stock is thought to have been responsible for much of an expected $400,000 six-month loss by plush Wellington department store Kirkcaldie & Stains.

In a forecast today Kirkcaldie's board said it expected the company's consolidated result in the financial year to August 31 to be just at the break even point.

That compared with a pre-tax surplus of $1.8 million for the year to August 2005.

Kirkcaldie already had a disappointing six-month result to February 2006, with consolidated earnings before tax 66 per cent below the same period a year earlier, but at least then the figures were still in the black at $449,000.

Managing director John Milford confirmed the figures pointed to a loss of $400,000 or so in the second half.

Several factors had affected the result, with the biggest being a recent sale on the Wellington waterfront to clear over-stocked items and excessive inventory, he said.

Trading was now beating expectations, but several factors were having an impact on the confidence of consumers to spend.

"Certainly we believe that we are addressing a number of the issues of the business to ensure that we have a better financial year next year," Mr Milford said.

Kirkcaldie's directors said the waterfront sale had reduced stock levels in ladies', men's and children's fashions, and would benefit future trading.

Several business initiatives were being worked on, including the revitalisation of the interior of the store and improving product ranges, presentation and layout.

It was also anticipated that the Harbour City Centre would improve its financial performance. The centre is across a side road from Kirkcaldie's Lambton Quay store and houses some of the company's retail business and some tenants.

Kirkcaldie shares last traded at $2.71 on Monday, having ranged between $2.40 and $2.91 in the past year.

- NZPA