Postie Plus narrows first-half loss

Thursday 19th March 2009

Postie Plus Group, the clothing and babyware chain part-owned by Kathmandu founder Jan Cameron, posted a narrower first-half loss as it trimmed inventory levels and repaid debt.

The net loss was $2.7 million, or 6.7 cents a share, in the six months ended January 31, from $2.9 million, or 7.29 cents a year earlier, the company said in a statement. Sales fell 5% to $49.9 million.

Postie Plus shed its unprofitable Arbuckles chain and has worked through an overhang of stock, replaced inefficient warehousing with a centralized distribution centre and revamped its Postie+ branded stores. Cameron, the cashed-up founder of the Kathmandu outdoor equipment stores, this month lifted her stake to 17.8%, nearing the 20% threshold that would require a takeover offer.

"We are quietly confident that we will turnaround the losses at the end of the financial year," said managing director Ron Boskell. Still, "we anticipate it will be a late run for us to reach the line and deliver the modest profit growth we seek," he said.

Bank debt fell by 32%, or $6 million and the company said Bank of New Zealand has confirmed its renewed funding facilities. Inventory levels had fallen 30% from the same period a year earlier, with apparel stocks and costs down 15%, it said. Postie Plus's central apparel distribution centre had achieved cost savings that were $454,00 ahead of target, it said.

The shares of Postie Plus last traded at 30 cents and have fallen 10% this year, lagging behind the NZX 50's 5% slide.

In December, the clothing chain said it was "making steady progress" in turning around the previous year's losses and bolstering its margins. Still, the retail market was "fragile," Boskill said.

Cameron has separately purchased the retailer's Arbuckles chain.

By Jonathan Underhill

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