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Clothing retailer Hallenstein Glasson Holdings has warned of a profit drop if sales remain as weak as they have been through spring.
In a statement to the NZX yesterday the company said sales across the group in Australia and NZ for the 16 weeks to November 16 were down by 2 per cent.
Its shares dropped 21c to close at $5.40.
Last week, the Warehouse Group also warned its annual shareholders' meeting that clothing was one of the categories that were down in the current "patchy" trading. Its shares fell 9c yesterday to close at $6.71.
Hallenstein Glasson said the drop was due to difficult trading conditions with intense competition in the fashion clothing segments of both Australia and New Zealand.
"While margins have continued to improve, directors advise that should current trends continue through the key month of December, profit for the six months to February 1 would be unlikely to meet that earned for the period last year."
Group managing director Cliff Kinraid said one factor was that the previous half-year results - a net profit of $10.9 million from sales of $100 million - were high due to a strong December and January.
He said clothing sales that would normally be moving by now to shorts and T-shirts had been delayed due to continuing cool weather.
Analysts said the consumer market was slowing slightly but warned against over-reacting to the Hallenstein Glasson trading announcement.
"There are no signs that anything is falling off a cliff," said Guy Hallwright, retail analyst for stockbroker Forsyth Barr. "The apparel sector has been hit badly by the bad weather continuing into the spring. People are not buying spring and summer stuff."
Retailers Association chief executive John Albertson said retail indicators were not showing any major slide.
The danger with clothing was that if sales did not pick up soon some people would not bother to make a big purchase for the summer, opting instead to make do with last season's clothes.
Briscoe Group chief executive Rod Duke said he had noticed colder weather had affected sales of outdoor furniture.
Hallwright said it was encouraging that Hallenstein Glasson was growing margins. "But they will have trouble continuing with that because they are on record margins now."
