Profits at Kirkcaldie's fall 41pc

Wellington high-end retailer Kirkcaldie & Stains has reported a 41.8 per cent fall in half-year net profit to $482,000.

Sales for the six months to the end of February were down 6.2 per cent from a year earlier to $20.9 million.

With the prevailing lack of confidence in the economy, retail demand was low for the entire six-month period, the company said today.

The end of season clearance sale was successful with increased volume, which helped achieve a healthy reduction in stockholding.

Markdowns during the latest period were significantly higher than previously, under a deliberate strategy to ensure clean stocks and reduced inventory levels for the rest of the year, Kirkcaldies said.

Combined with pressure on margins to achieve sales, the markdowns resulted in lower gross profit.

While many costs had increased due to inflation, total expenses for the period were below the level of a year earlier.

Management remained confident of a full year profit similar to last year on the basis that the current level of retail confidence did not further deteriorate, the company said.

"We do not envisage the retail environment changing substantially in the coming 12 months."

An interim dividend of 3c per share is to be paid.

- NZPA