Specialty Fashion Group’s focus on cutting cost has helped the company return back to profit on results from the previous year.
The company, which owns Katies, Crossroads, City Chic, Millers and Autograph, has reported a net profit of $13 million for the full year ended 30 June 2013, an improvement from a net loss of $2.8 million that was recorded last year.
It also reported that revenue was $569.5 million, 0.5 per cent lower than last year but discounting the cost of store openings and closures it’d be up 0.4 per cent.
Earnings before interest and tax depreciation and amortisation (EBITDA) were $41.1 million, which is nearly more than double than last year’s reported $21.7 million.
Specialty Fashion Group CEO Gary Perlstein attributed the profit turn around to making strategic transformation to its supply chain, including changing to a direct product sourcing model, as well as making investments to an in-house customer insights team and CRM platform.
The retail group also continues to rationalise underperforming stores while focusing on opening new stores with more attractive investment returns. Its physical store portfolio was 886 store at the full year, following the opening for 40 stores and the closure of 47 stores during half year.
“Specialty Fashion Group grew profit in FY2013, despite difficult economic conditions that affected the entire retail industry, particularly during the second half,” Perlstein said.
“This improvement is in large part due to significant operating enhancements that drove a record gross margin, along with flat costs of doing business.
“We are pleased with the progress we have made with our omni-channel strategy, with online becoming an increasingly important contributor to future growth.”
The group’s online sales grew to $10.6 million for the second half of the year, or 4.1 per cent of total revenue, and in FY2013, grew 50 per cent to $21.9 million, or 3.8 per cent of total revenue.
The group believes its focus on omni-channel strategies, customer relationship management and supply chain will help drive operational improvement in FY2014. However, the group said it will continue to remain cautious as to the extent of organic growth that may be achieved at the current time given the ongoing lack of consumer confidence in Australia.