Hallenstein Glasson half year profit falls 16.5 pct

Clothing retailer Hallenstein Glasson's half year net profit fell 16.5 percent to $7.14 million, as sales at women's fashion chain Glassons were weaker than expected in the key Christmas trading period.
Revenue for the six months to February 1 dropped 1.7 percent from a year earlier to $100.61m.
Chairman of directors Warren Bell said sales during Christmas were critical to the company's profit and in the latest period it had struggled to achieve targets.
Competition had been particularly intense in women's apparel and the company had to meet the market to ensure inventory levels remained under control, Mr Bell said.
At the end of the summer season inventories were $14.25m, compared with $13.57m last year.
Both Hallensteins and Storm chains had traded well during the Christmas period and their results reflected that.
Cash reserves reduced during the period from $34.94m to $20.18m, with a significant portion of that due to changes in terms of supply with some key offshore suppliers, the company said.
Volatility in cotton prices meant that in order to secure fixed contracts on future orders suppliers had to be paid earlier than in the past.
The company's interim dividend is unchanged at 14c per share.
While the $8.35m being paid out in dividends was $1.21m higher than profit after tax for the period, it could be comfortably managed given the group's cash reserves, the company said.
Group sales for the season to date were down 3.7 percent on a year earlier, but when adjusted for the impact of closed stores in Christchurch sales were flat.
Glassons in Australia had shown a steady improvement since January, which was particularly encouraging given the competition it faced in that market.
During the past two months, five stores in Australia had been refurbished with a new Glassons concept, with two more opening soon. The opened stores were showing positive results but more time was needed to evaluate their success, the company said.
The general economic environment could best be described as challenging.
``The rising cost of food and petrol has an immediate impact on our customers, and any benefit received from lower tax has been offset by price increases in these core consumer items,'' Hallenstein Glasson said.
``We have a business with a clean balance sheet, highly experienced management and the strength to compete in what we see will be a very demanding market over the balance of the year.''
During the latest half year sales at Glassons New Zealand fell 6.1 percent, with net profit down 24.3 percent. At Glassons Australian sales fell 5.6 percent, and there was a loss of $652,000.
At menswear chain Hallensteins sales lifted 3.7 percent for the half year and net profit was up 16.7 percent. Changes introduced by a new management team included a new advertising agency and new branding.
At Storm, introduced in 2007 to provide something more than specialty chains offered but not at designer prices, sales lifted 27.2 percent, and were up 4.7 percent on a same store basis, while net profit improved 31.8 percent.
The February 22 Christchurch earthquake had an impact on turnover to varying degrees in all of the groups 14 stores in the city, with seven stores still closed, although there some of those had reopening dates.
Insurance for loss of profits and material damage was in place which would protect earnings for the current financial year, the company said.