The main concern for Specialty Fashion Group is the impact that the Queensland floods will have on its business.

The company has been forced to close four stores, which have suffered water damage and a further 41 stores that are vulnerable to flooding in Gympie, Toowoomba and Brisbane areas.

“Our immediate concern is the impact of the floods on both our team members and customers, and we are taking actions to provide support wherever we can. The floods follow from the macroeconomic challenges we have dealt with for the past year, and our store teams are very resilient and coping well given the circumstances,” Gary Perlstein, Specialty Fashion Group CEO, said.

This comes as part of the company’s announcement that the sales for the first half year ended 31 December 2010 was $313 million, which was down 1.6 per cent over the same period last year. Comparable store sales growth for the half year was negative 3.8 per cent, in contrast to the prior year’s first half of positive 8.9 per cent.

Challenging trading conditions, including a drop in consumer spending since the most recent rate rise announced by the RBA at the beginning of November and higher rental and costs were blamed for the half year sales trends.

Specialty Fashion Group expects EBITDA for the first half of FY 11 will be within the range of $33 to $34 million.

“In the first half year we successfully opened net 69 stores, and refurbished 54 stores in line with our strategy to invest in portfolio growth, finishing the half year with 880 stores. We are comfortable with our inventory levels and well places to trade in what we expect will continue to be difficult trading conditions,” Perlstein said.