By SIMON HENDERY
Hallenstein Glasson Holdings is the latest retailer to blame an underwhelming result on aggressive discounting by its competitors.
The group, which runs the Hallensteins menswear, Glassons womenswear and HBK Girl clothing stores in New Zealand and Australia, yesterday reported a flat full-year result for the year to August 1.
After-tax
profit was $11.46 million, compared with $11.43 million for the same period last year. Group revenue increased 1 per cent, from $175.1 million to $177 million.
Chairman Warren Bell said the result reflected a trading year in which the apparel market had been subject to aggressive discounting as competitors fought for market share.
In the past month retailers Briscoe Group and Farmers have also blamed competitive discounting when reporting less-than-spectacular results.
Hallenstein Glasson has also suffered another affliction common among New Zealand retailers - a fraught expansion into Australia.
The group decided during the year to pull Hallensteins out of Australia and had closed three of its four stores, with the last due to convert to a Glassons shop next month.
Bell said the decision would allow the company to concentrate its resources on developing the Glassons brand in Australia, which consists of 15 stores in Sydney and Melbourne. He said direct costs associated with the Hallensteins exit were $580,000.
In the New Zealand market - which accounted for 90 per cent of group operating revenue - Glassons had "continued to perform well", Hallensteins had "consolidated its position as a menswear fashion destination" and HBK Girl had also "experienced a period of consolidation" after two years of strong growth.
Bell said a number of economic factors, including the consumer-driven nature of the domestic economy, a spending focus on housing and related products, and increasing household debt, meant the company viewed the coming months "with a degree of caution".
The company will pay a final dividend of 9.5 cents a share, unchanged from last year, on December 15.
Despite Bell's subdued comments, Hallenstein Glasson shares rose 10c, or 3.4 per cent yesterday to close at $3.
Hallenstein Glasson Holdings Year to August 1
(figures for 2003 and 2002)
Revenue: $177.9m $175.9m
Pretax profit: $17.5m $17.1m
Tax: ($6.0m) ($5.7m)
Net profit: $11.5m $11.4m
Earnings per share: 19.5c 19.5c
Operating cashflow: $18.3m $17.3m
Investing cashflow: ($3.7m) ($4.5m)
Financing cashflow: ($10.9m) ($9.2m)
Final dividend: 9.5c* 9.5c
*Payable December 15
