Hallenstein Glasson posts 20 per cent jump in profit

All brands experienced strong growth as stores reopened from the 2020 lockdowns. Photo / NZME

By RNZ

Clothing retailer group Hallenstein Glasson has posted 20 percent jump in profit despite the challenges posed by Covid-19.

Key highlights (for the year to August vs year ago):

• Net profit after tax $33.3m v $27.7m
• Sales revenue $350.7m v $ 287.7m
• Operating profit $49.2m v $39.1m
• Total Liabilities $110.3m v $124.3m

The company said overall sales growth compared to the previous year was pleasing in what has been a tough environment.

All brands experienced strong growth as stores reopened from the 2020 lockdowns, with its inventory management ensuring stores were well stocked to meet demand, the company said.

"Online sales have continued to grow throughout the year and have been supported by the release of the Glassons App and the establishment of a USA website to sell direct to US-based customers. The increased sales on the prior year also compares to the periods where stores were closed in 2020," the company said.

However, Hallenstein Glasson's gross margin declined during the year due to a number of factors, including unfavourable exchange rates with the US dollar in both New Zealand and Australia, as well as challenges with freight costs due to the ongoing impact of Covid-19.

For Glassons, sales in New Zealand for the year were just under $120 million, up nearly 17 per cent, and net profit was $11.5m, down 5 per cent.

Sales in Australia were just over $133m, up by just over 38 percent, and net profit after tax was $16.4m, up by three-quarters on the prior year.

"With the large increases in online sales there has been significant investment in digital including the launch of an omni-channel Glassons app in October which has seen more than 300,000 downloads, and a specific Glassons USA website to serve our growing US customer base."

Hallenstein Brothers stores reported $97.2m in sales (including Australia), an increase by nearly 10 per cent and net profit was $4.8m, an increase of 7.5 per cent.

Online sales grew by more than 31 per cent, and represent nearly a quarter of all sales.

The new financial year has started under difficult circumstances for the company with both Australia and New Zealand in lockdown, with Group sales down around 19 per cent in the first eight weeks.

The directors have deferred the declaration of the final dividend until Auckland and the Australian states of New South Wales and Victoria come out of their lockdowns.