Weather nips clothing chain

Retailers' shares weakened yesterday after clothing outlet Postie Plus warned that a dismal summer would knock first-half profits into the red.

Managing director Paul Young said the chain had been hurt by an unfortunate combination of the wettest summer on record, the coldest summer since 1945 and the strong dollar, which had weighed on prices.

Young said these factors "haven't come together in the last 100 years".

With its key summer months of October to December gone, Postie Plus expects a $700,000 loss for the six months to January 31. That compares with a profit before tax of $3.1 million in the same period last year.

Interim and final dividends will be reviewed. Young said an interim dividend was still possible, albeit at lower levels than last year's full dividend of 7.06c a share.

Postie Plus shares fell 12c to 73c, dragging retailers specialising in apparel, summer sports and gardening equipment with it.

The Warehouse, which makes about 25 per cent of its New Zealand sales from clothing, fell 3c to $3.57, and Hallenstein Glasson slipped 7c to $3.52.

The warning follows the release of data last week giving conflicting messages about retail sales over the holiday period.

Eftpos firm Paymark, which says its network accounts for 80 per cent of electronic transactions, said consumers spent $3.2 billion last month, up 9.66 per cent on December 2003.

But the BNZ said the December result was slightly weaker than normal and followed below-average growth in November.

Young said the five Rendells stores in Auckland had fared badly. They had now been converted to Postie Plus outlets, at a cost of about $2 million.

The retailer forecast full-year sales of $113 million, up from $108.5 million last year, and annual profit before tax of $2.3 million, versus $6 million last year.

Young suggested Postie Plus' problems were only short term. It had simplified its business and been "pretty hard" on overhead structures.