Postie Plus returns to profit after shedding stores

Friday 25th September 2009

Postie Plus Group, the clothing and babyware chain part-owned by Kathmandu founder Jan Cameron, eked out a small profit after shedding unprofitable assets and gaining market share.

The retailer posted net income of $615,000, or 1.54 cents a share, in the 12 months ended August 2, from a loss of $10.9 million, or 27.13 cents, a year earlier, it said in a statement today. The company won’t pay a dividend as it seeks to preserve cash.

Postie Plus sold its unprofitable Arbuckles manchester chain to 17% shareholder Cameron and consolidated distribution in one Christchurch centre to screw down on distribution costs and improve stock management. The company cut costs from continuing operations by 5.5% in the latest year and said it benefited from an improved product range.

“While our investment in store development is indicative of our underlying optimism, market conditions remain challenging with any recovery in consumer confidence likely to take time,” said chairman Peter van Rij. “Since balance date our momentum continues with further improvement in sales by comparison to 2008.”

Helping stoke optimism, government figures this week show the economy emerged from recession in the second quarter while New Zealand consumer confidence surged to a four-year high.

“The prospects of the current quarter bringing an end to the two year recession will be welcomed by all retailers,” van Rij said.The retailer will aim to “minimise the extent of the customary first half loss and expects to maximise its earnings in the second half,” he said.Sales from continuing operations rose 2.5% to $110.4 million in the latest year.

Postie Plus has 79 Postie+ apparel stores and 24 Baby City childrens wear and equipment stores.

Businesswire.co.nz

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