Hallenstein Glasson lifts sales, appoints new MD

By Phil Boeyen, ShareChat Business News Editor

Thursday 6th December 2001

Clothing company Hallenstein Glasson (NZSE: HLG) has appointed a new group managing director and reported increased sales for the start of the financial year.

Shareholders at the company's annual meeting on Thursday were told that Hallenstein boss, Cliff Kinraid, is to take over as head of the entire operation and that the current head of the Glassons womenswear chain, Tim Glasson, is to step down.

Chairman Warren Bell says Mr Kinraid has spent most of his working life with the company in Glassons, both in the buying and retail arms of the chains.

Mr Bell also told shareholders that group sales the four months ended November are 5% ahead of the same time last year, although he says this includes new store sales. A same-store comparison was not given.

"The December trading period accounts for a large proportion of our profit in the first half, and until December is complete it is impossible to accurately project our earnings."

One note of caution from the chairman was in regard to the Australian market, where the company has Glassons stores in Sydney and Melbourne and Hallenstein stores in Melbourne.

"We see the Australian retail apparel sector will continue to be difficult. I was in Melbourne earlier this week and whilst the newspapers were reporting some uplift in consumer spending in the household goods
sector, the apparel sectors were still under pressure."

Hallenstein Glasson now has 110 retail stores in total - 94 in New Zealand and 16 in Australia - but Mr Bell reminded shareholders that the Australian stores are smaller.

"It must be remembered the Australian stores are only two thirds the size of the standard format New Zealand stores. Maintaining such a large number requires significant capital investment, and tight controls on inventory and costs remains the key element to preserving cash flow and the company's strong balance sheet."

The company is also once again focusing on the issue of rent increases at shopping malls. Mr Bell says unrealistic rent rises are forcing the company to look at other options to maintain its profit base.

"The larger format store Hallensteins have opened in Botany Town Centre has shown encouraging results, and further large format stores in lower rental areas will be considered as the opportunity arises.

"The expansion of malls particularly in the Auckland area has meant an increase in turnover, but unfortunately the increase in operating costs has meant the company has profited little from the increased space. We are focusing strongly on this at present."

Looking ahead the company is forecasting that the current financial year will be dominated by international events that impact the local economy but notes that consumer confidence has remained remarkably stable following the September 11th events, helped by falling interest rates.

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