Specialty Fashion Group continues its store rationalisation program to close or exit underperforming stores, which has resulted in the company reporting a net loss for the 2012 financial year of $2.8 million.
The owner of stores including Millers and Katies also announced its EBITDA of $21.7 million is in line with the results guidance that was provided on 13 July 2012.
Despite this loss and challenging economic and retail market conditions continues throughout the year to June 2012, the company remains optimistic.
It said underlying trend in SFG’s sales and gross margins improved in the second half of the year, largely as a result of improvements made its supply chain, which has improved its gross profit margin from the current level of 58.1 per cent for the year.
This is being achieved through improvements in purchase commitments driven from reductions in the underlying cost drivers of fabric and product manufacture, more favourable hedged USD exchange rates and further internal improvements in supply chain management.
In addition, the company has continued to aggressively pursue online sales growth and the delivery of omni-channel shopping experiences through investment in a new e-commerce platform, expansion of its online logistics operation, as well as leveraging its customer relationship management capabilities., especially its new online business Stylefix.com that was launched 2 July 2012.
In 2012 financial year, the company’s online sales grew to $15 million, representing 2.6 per cent of total revenue. Email membership grew to 2.1 million members.
“While growth of the womenswear market is expected to be low we are focused on pursuing expansion into new sales channels and product categories. We believe we have the largest women’s retail shoppers database in Australia and a unique opportunity to monetise this asset,” Gary Perlstein, SFG CEO, said.
The also company expects an improved trading performance in the 2013 financial year, although it remains cautious as to the extent to which macroeconomic factors, both in Australia and abroad, may adversely influence consumers’ propensity to spend on discretionary items.
“We have a strong balance sheet and this combined with the business improvement initiatives underway positions the company to trade solidly in 2013 financial year, and improve the group performance,” Perlstein said.