Friday 14th May 2004 |
Text too small? |
After a dream run in 2002 the shares are now trading back where they started, as investors continue to back-pedal away from the retail sector.
The company has moved strategically to protect its margins, which had an immediate negative impact on short-term sales, managing director Rod Duke said last week.
However, the sales performances from both its divisions were disappointing in the first quarter to April 30.
Rebel Sport, whose same-store sales were down 18%, continues to struggle despite a new store opening in Rotorua, while Briscoe's Homeware same-store sales were down nearly 5%.
Analysts say investor interest has disappeared from the sector and it is a case of "time will tell."
The question now is whether the new emphasis on protecting margins and improving the company's brand image pays off.
Duke said although the increase in margins had occurred faster than expected, the drop in first-quarter profit was unlikely to be made up in the second quarter.
Although the economy is still relatively buoyant, interest rates are expected to rise again. National retail sales grew in February, but the underlying trend suggests the pace is slowing.
According to Statistics New Zealand, sales were 1.6% lower in February than in the previous month.
Briscoe has also benefited from the higher New Zealand dollar but the currency market has since depreciated.
No comments yet
March 19th Morning Report
IPL - Divestment of Woolworths Mount Roskill
AIA - lands new partnership with global duty-free operator
BRW - Board changes & Withdrawal of meeting request
New Zealand King Salmon - Trading Update
GEN - Financial Assistance for the Purchase of Shares
MPG - Metroglass clarifies media statements by Crescent Capital
VTL - Takeovers Panel orders Empire to reimburse Vital's expenses
March 14th Morning Report
SKT - Sky secures iconic sports rights