Specialty Fashion Group has managed to strengthen both its store portfolio and online presence, which has helped increase the company’s revenue for the six month period to 30 June 2012 to $265 million, 1.4 per cent higher than the second half of the prior year.
Despite this, comparable store sales for the half year were 2.3 per cent lower than the second half of the prior year, reflecting the difficult trading conditions throughout the period.
As a result, the company expects earnings before interest, taxation, depreciation and amortisation (EBITDA) for the full year ended 30 June 2012 to be within the range of $21 million to $22 million – almost half the $40.6 million that was posted last year.
“Industry-wide discounting remains unchanged and the reductions in the cash rate have had little effect on consumers’ discretionary spending, however the opportunities to innovate and enhance the omni-channel experiences for our customers are exciting,” Specialty Fashion Group CEO, Gary Perlstein, said.
“Some tailwinds are expected with respect to the containment of product costs and some other costs of doing business, and we are very focused on recalibrating the Group to ensure the company thrives in an industry that is undergoing permanent structural change.”
The company has decreased its store portfolio to 893 stores, following the opening of five stores and the closure of 21 stores during the second half the year. The rationalisation of underperforming stores will have a positive impact on the profitability of the Group in 2013 financial year.
In other aspects, the group’s online sales for the second half the 2012 financial year tripled compared to the same period in 2011 financial year, growing to $15 million for the full year, or 2.6 per cent of total revenue.
“Our customers are enjoying their online shopping experiences, and there is significant potential for further growth in online as we migrate more of our solely in-store customers to become omni-channel shoppers. Our experience is that enthusiasm for online shopping is across all demographics,” Perlstein said.
“I’m confident the proactive and strategic investments we have made and will continue to make in our technology and organisation will enable us to reach our target of 15 per cent of sales through online within three years.”
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