Hallenstein Glasson sees profits boost as it gets its strategy right
New Zealand-based fashion retailer Hallenstein Glasson had a good first half with net profit surging 65% as it opened new stores in Australia, ramped up its digital efforts and avoided heavy markdowns.
The owner of the Hallenstein Brothers and Glassons stores made NZ$15.1 million in post-tax profit during the six months to February with CEO Mark Goddard saying that two new Glassons stores in Australia helped its growth.
Local analysts also said it is benefiting as consumers are reconnecting with home-grown brands after being distracted by a spate of launches from international labels.
This reconnection is particularly noticeable in smaller towns as international chains like Zara and H&M focus on the biggest cities while the domestic chains have a wider network of stores across the two countries.
But analysts also praised Hallenstein Glasson for competing directly with global newcomers and opening impressive experiential stores in big cities.
Not all of its units over-performed though. The company was in the news last month after it sold its Storm womenswear chain to the unit’s creative chief and CEO Deborah Glasswell. It said Storm had no longer been a "core asset” and that view makes sense given that the accounts showed it made a NZ$1.4 million loss as sales fell almost 13% in the six-month period.
But the company certainly sees Glassons and Hallenstein Brothers as core and sales rose at both chains. Christmas was a strong period with sales surging during the festive season while six-month sales were up almost 20% to NZ$146.8 million from NZ$122.9 million.
New Zealand sales rose nearly 10% and in Australia they soared over 60%, while the gross margin across the group rose 3.4 percentage points to 61.5%. Sales also rose strongly online to make up 11% of total revenue in the period to February 2018.
As well as higher web sales, fewer markdowns and new stores, the company also said that getting new styles into stores faster boosted the chains’ appeal, while better customer service and a greater degree of digital engagement were key too. The company has moved away from traditional marketing to digital, social and influencer events and this has clearly paid off.
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