27 Sep 2010

Hallenstein Glassons profit jumps

5:16 pm on 27 September 2010

Hallenstein Glassons' annual profit has risen by more than half, which the firm puts down to an improved clothing range in its stores and a stronger New Zealand dollar.

The clothing retailer made $19.5 million in the year to August, an increase of 53% compared with the previous year.

Despite subdued consumer spending, sales across its Hallensteins, Glassons and Storm stores rose 4.5% to $207.1 million.

In terms of profit, Glassons led the charge, with a 53% increase in New Zealand, while in Australia it turned a profit after losses in the previous year.

Hallenstein chairman Warren Bell says real gains have been made in Glassons by offering better ranges and controlling stock levels. The stronger New Zealand dollar also contributed to the better margins, he says.

Momentum seen as difficult to maintain

Looking ahead, Mr Bell expects retail trading to remain tough, with no significant improvements in the next few months. He says the momentum achieved over the past year will be difficult to maintain.

While sales rose 5% in the first seven weeks of the new financial year, he says it's too early to predict first-half earnings.

Forsyth Barr analyst Guy Hallwright also says it'll be difficult for the company to maintain that momentum in what is still a tough retail trading environment.