19 Dec 2008

Clothing retailer predicts 2009 will be difficult

10:02 am on 19 December 2008

Hallensteins Glassons chairman Warren Bell says a lower New Zealand dollar and higher domestic unemployment will hurt the retail environment next year.

The clothing retailer is reporting a 4% drop in sales since August.

Warren Bell told the company's annual general meeting of shareholders in Christchurch on Thursday that while profit might be down, the heart of the business remained sound and had the financial ability to ride things out.

He said in the past the company has been criticised for carrying excess cash on the balance sheet, but at times like this the strategy bears fruit.

Mr Bell said there had been a slight pickup in sales in November but margins had been lower due to intense competition.

He said the next few weeks were so critical to the company's financial result, he was unable to accurately predict profit for the first half, but would be in a better position to update the market in late January.

The company has also put expansion plans for its Glassons business in Australia on hold until market conditions improve, and has decided to move the buying team to Auckland instead of Melbourne.