Premier Investments has declared its net profit after tax reached $39.4 million, which is down from $42.4 million that was recorded in the corresponding period last year.
As the owner of Just Group, which houses brands including Just Jeans, Smiggle, Jay Jays, Portmans and Peter Alexander, it reported sales as “flat” and is down 3 per cent from the same period last year to $458.4 million.
The company blamed the unprecedented series of natural disasters in Australia, New Zealand Japan, as well as the increasing cost of living for the falling profits and sales.
“The disappointing sales performance reflects a very challenging retail environment, characterised by weaker apparel industry sales and extensive discounting,” Premier Investments said in a statement.
“The environment worsened towards the end of the second quarter with the Queensland and Victorian floods impacting consumer sentiment and retail spending, causing numerous store closures.”
According to Premier, its unisex brands, Just Jeans and Jay Jays were most affected. It was also a “disappointing season” for Dotti after growing strongly for a number of years.
On the upside, Portmans turnaround progressed well in the face of the challenging environment with sales up 5.3 per cent on the back of a more fashionable range and improved visual merchandising. Profit performance also improved for Jacqui-E.
The company said Peter Alexander and Smiggle delivered the strongest performance of the group’s brands and it will continue to invest in their growth.
Smiggle will see international expansion with the first store to be launched in Singapore in April/May. There are plans to open up to five more stores within the next six months. Premier is also in the process of evaluating other markets that Smiggle may enter.
Accordingly, Premier now expects that Just Group EBITA for 2011 will be in the range of $80 million to $85 million.
“Like other Australian and New Zealand retailers, Premier is operating in an extremely challenging retail and macroeconomic environment. As noted, this environment deteriorated through the second quarter and there are no current signs of improvement in the third quarter,” the company said.