Hugs for Hallenstein

Australian women have embraced Glassons, helping clothing retailer Hallenstein Glasson post a second year of double-digit trading profit.

The company reported a 12.4 per cent increase in net profit to $19.3 million.

Analysts said that was ahead of market expectations and it helped drive Hallenstein shares 5c higher to close at $4.80.

Adjusted for a one-off gain from the sale of property last year, the increase in trading profit looked even better at 19.5 per cent, which followed a 41 per cent increase last year.

The company offered the figures to the market a week before schedule, due to early audit clearance. But executives would not comment on yesterday's disclosure by Max Fashion founder David Wright, that he had accumulated a 7.1 per cent stake.

Chairman Warren Bell said that the outlook for the company was positive on both sides of the Tasman.

He said that the company's performance in the latest period showed it had got the retail formula right for for both markets. The potential for growth, particularly in Australia, was encouraging.

Group managing director Cliff Kinraid said rising costs, driven by higher fuel prices and exchange rate uncertainty, offered a challenge but sales had been stable in the first six weeks of the present year.

"People are saying it will slow up: if it does we will just have to adjust our strategy," he said.

New Zealand's 46 menswear and 31 womenswear stores delivered a 16 per cent increase in trading profit to $19 million, on sales revenue of $163 million. Same-store sales were up 4.4 per cent.

In Australia, same-store sales rose 14.4 per cent, helping to drive a 23 per cent increase in overall sales to $20.7 million. Australia posted a $312,000 profit compared with a $261,000 loss in 2004.

"While still modest we have now traded profitably in Australia for three consecutive six-month periods and the last six-month performance has shown continued improvements," said Bell.

Three new Glassons stores were added in Australia during the period, taking the total to 18, with two more planned.

Kinraid said the next step for the company was to consolidate in Australia, where it would stick with womenswear.

"We've got the infrastructure in place to take on more stores," he said. New South Wales, Victoria and opportunities in Queensland would all be looked at.

It had no plans to expand beyond Australasia.