Hallenstein Glasson's net profit drops but sales steady thanks to online shoppers

The first eight weeks of the new financial year have seen group sales grow 10.71 per cent on the prior year - driven predominantly by online sales. Photo / File

Hallenstein Glasson Holdings says it was able to maintain sales despite store closures and the disruption of the Covid-19 pandemic due to a spike in online shoppers.

The retail company today released its results for the full year ending August and said sales for the 12 months to August 1 were at $287.76 million - slightly higher than prior year at $287.55m.

The audited net profit after tax for the 12 months, however, was $27.77m, a decrease of 4.29 per cent.

The NZX-listed company said overall sales were maintained largely due to an increased level of online sales from April onwards.

Covid-19's impact saw store closures in New Zealand and Australia and challenges with freight costs resulting from the impact of the pandemic, the company said.

After Auckland moved to alert level 3 in August, 13 Hallensteins stores and 12 Glassons stores were closed and reopened at the end of the month in the city.

For Glassons, however, sales in New Zealand for the year were $102.60m, an increase of 1.86 per cent on the prior year. Sales in Australia were $96.69m which was an increase of 8.03 per cent.

Hallensteins, meanwhile, saw sales for the 12-month period at $88.48m (including Australia), a decrease of 9.09 per cent on the prior period.

The company said sales for Hallensteins were more challenging in the second half of the year as demand for tailored product diminished with the impact of lockdowns on people working remotely and restrictions on gatherings.

Online sales collectively grew over the period by 46.87 per cent against last year, including growth of 80.1 per cent within the second six months of the financial year, the company said.

Online sales now represent 21.88 per cent of total sales for the full financial year but represented 30.30 per cent of the total sales for the second half of the year.

Because of the rise in online sales the company has invested in digital including relaunching the website and a planned launch of an omni-channel Glassons app later in the year.

The first eight weeks of the new financial year have seen group sales grow 10.71 per cent on the prior year - driven predominantly by online sales.

The company said while this was a positive it will continue to be cautious in regard to the future impacts of Covid-19.

Hallenstein Glasson said it had reduced operating costs, claimed government wage subsidies, extended supplier terms and placed capital projects on hold.

The company also negotiated rent relief with landlords and the directors, executives and support office staff taking short-term reductions to their salaries.

The rental negotiations with landlords for the lockdown period are still ongoing.

The company's directors also declared a final dividend of 24 cents per share (fully imputed) to be paid on December 15. Together with the interim dividend of 15 cents per share that was paid on September 4, the full year dividend is 39 cents per share.