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Fashion retailer Hallenstein Glasson Holdings has announced a massive drop in profits since the Covid-19 spread.
The company, which owns Hallenstein Brothers and Glassons in New Zealand and Australia, reported a 32.1 percent drop in sales for the first quarter ending April 30 compared to the same period last year.
In an announcement to the New Zealand stock exchange, the fast-fashion company estimated that the after-tax loss would be approximately $ 2.8 million.
Hamilton Hindin Greene investment adviser Jeremy Sullivan said the results were better than expected after the company quickly turned to online sales during the Covid-19 shutdown.
In New Zealand, Glassons received $ 2.69 million in wage subsidies for 451 employees, and Hallenstein Brothers received $ 2.48 million for 415 employees.
In Australia, the company had also accessed payments from job seekers.
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The announcement pre-empted plans for a gradual reopening of stores in New Zealand starting May 14.
Things
Glassons and Hallenstein Brothers saw a 32.1 percent drop in sales during the first quarter of 2020.
Australian stores had already started to open.
With the reopening of stores this week, we anticipate operating profitably from May onwards, although we expect it to be at a lower level than the same period last year due to a likely decrease in pedestrian traffic, higher levels. unemployment and related economic impacts, “said statement by managing director Mary Devine.
The company had experienced significant growth in its online commerce during the coronavirus crisis, Devine said.
“We will continue to prioritize investment in this part of our business,” said Devine.
“We believe that the significant increase in our online business is likely to mark a permanent change in consumer habits in New Zealand and Australia, and we expect our online sales to represent a much larger portion of our total sales in the future.”
Hallenstein Glasson Holdings had taken a series of measures to preserve liquidity, he said.
Stuff-co-nz
Hamilton Hindin Greene investment adviser Jeremy Sullivan says the loss of Hallenstein Glasson was better than expected.
Sullivan said the results were slightly better than the market expected and that shares were up 3.3 percent on the reverse of the announcement.
But the delivery issues facing the retailer could hamper sales.
“That is really slowing down the speed of money in terms of turnover. It can certainly be understood that people who have a lot of backorders are not going to buy a lot of products,” he said.
Hallenstein Brothers and Glassons had been able to adapt faster than most, he said.
“They had a good online platform beforehand, and they have been able to increase, but they are still struggling with demand,” he said.
