KEY POINTS:
Clothing retailer Hallenstein Glasson has followed the fashion of retailers reporting falling sales as consumers become increasingly shy with their wallets and purses.
It announced yesterday that group sales for the 14-week period ending May 11 was $50.27 million, down 5.34 per cent on the same period last
year. Its directors also expect full year results to be lower than last year's.
Hallenstein Glasson's result follows drops in sales for The Warehouse Group, the country's largest listed retailer, and Briscoe Group, long regarded as the industry barometer.
It also came on the same day Statistics New Zealand released figures showing a seasonally and inflation-adjusted retailing sales fall of 1.2 per cent in the March quarter - the largest in 11 years.
"The retail environment during autumn has been particularly challenging, with a number of compounding events all impacting sales," Hallenstein Glasson said.
Consumer demand was under pressure from rising costs of living, while a mild autumn has not been favourable for winter apparel, which traditionally have higher margins. Easter, which historically acts as a catalyst for the start of winter clothing buying, was also early this year.
But the company's directors were pinning their hopes on a winter boost, with the recent cooler weather already showing an improvement in sales.
That was, however, unlikely to arrest a slide in fortune.
"With the core winter months of May and June ahead, it is difficult to predict a full year result, although directors advise it is unlikely to match the 2007 annual result."
Retail analyst Tim Morris, of Coriolis Research, said clothing retailers appear to have not been hit as hard as other sectors in the latest Statistics NZ figures.
Clothing retailing fell 5.9 per cent, but appliance retailing, and furniture and floor coverings suffered harder falls, down 15.2 per cent and 10.8 per cent respectively.
Morris said there were multiple streams in clothing retailing.
"If you've got a job, you've got to wear tidy clothes to go to work and they only last so long, so there's some pieces in that that are almost non-discretionary. There's other bits that are retail therapy ... It is a discretionary spend, but certainly it hasn't shown any evidence of slowing as quickly as some of the other areas."
The turnaround in retailers' overall fortunes has been swift, said Morris. He cited appliance retailing, which only recorded its first fall in sales in September last year. That fall was just 1.7 per cent. In March, the fall was 15.4 per cent.
"We're not talking about a small movement of a per cent here or a per cent there," he said.
All sectors - apart from supermarkets and grocery retailing, cafe and restaurants, and automotive fuel - were charting falls.
"It's tough times out there in retailing and certainly from the look of this data, it looks like it's getting worse not better."
* Hallenstein Glasson also announced that it was moving the buying function for its Glassons womenswear stores from Christchurch to Melbourne.
Chief executive Shayne Quanchi said the key buying team of five people will relocate from October.
TRYING TIMES
HALLENSTEIN GLASSON
* Sales for the 14 weeks to May 11 down 5.34 per cent to $50.27 million.
* Full year results expected to be worse than last year's.
THE WAREHOUSE GROUP
* Third quarter sales down 4.3 per cent to $394.6 million.
* Full year profit could fall by as much as 19 per cent to $94 million.
BRISCOE GROUP
* First quarter sales down 6.39 per cent to $90.3 million.
* Warns first half profit could potentially fall by more than 50 per cent.
KIRKCALDIE & STAINS
* First-half net profits up 12.8 per cent to $829,000.
* But expects trading conditions to get tougher.
