Crazy times at Miller’s Retail

Miller's Retail, an Australian discount retailer that owns the Crazy Clark's chain, will have a full-year loss after taking charges to write down the value of unsold stock and the cost of closing 7 per cent of its stores.

The charges, estimated at A$55 million ($59.4 million), will be deducted from earnings before interest, tax, depreciation and amortisation for the year ended June 30, 2005, of between A$48 million and A$53 million, the Sydney-based company said in a statement to the Australian stock exchange yesterday.

Miller's Retail is trying to fend off competition from New Zealand-based Warehouse Group, which is attempting to revive earnings at its unprofitable Australian stores.

The nation's retailers are also battling a drop in consumer spending that followed the central bank's decision to raise interest rates to a four-year high in March. Retail spending had the biggest drop in nine months in April, a government report last week showed.

The company "will be in a sound position to pay future dividends and create a platform for growth," managing director Gary Perlstein said.

The charges comprise A$25 million to write down stock and A$30 million for the cost of closing about 80 of its 1050 stores. The company will also write down the A$31.1 million remaining carrying value of its discount variety stores to zero. The non-cash write-down won't affect operating profit, it said.

Miller's Retail shares fell 3Ac, or 2.7 per cent, to 88Ac. They've dropped 15 per cent this year.

The company reported a first-half loss of A$10 million in February.

- BLOOMBERG