Road to recovery for major retailers
Sydney Morning Herald
Saturday July 25, 2009
UPMARKET retailer Country Road has joined the ranks of Myer and David Jones to announce a "pleasing" second-half trading result and tipping earnings to rise by 52 to 56 per cent for the full year.Country Road said that, following strong sales and profit growth in the first half, it expected pretax profit for the full year to June 30 to be between $21.3 million and $21.8 million.This compares with a profit of $14 million for 2007-08."This has been an outstanding year for our business and has been achieved in spite of very difficult trading conditions," Country Road's chief executive, Ian Moir, said.Earlier this year the retailer posted an 84 per cent increase in pretax profit to $10.3 million for the six months to December 31 as sales rose 20 per cent to $176.7 million."Our focus on providing exceptional value has proven successful among our increasing customer base as the search for value intensified in a deteriorating economy," Mr Moir said.Last month the nation's two leading department stores upgraded their profit forecasts. David Jones reported that robust sales would lead to increased first-half 2009 profit guidance of between 20 and 30 per cent against earlier estimates of a maximum 5 per cent above the previous period. For the full-year, David Jones is tipping profit to rise by 8 to 12 per cent against an original forecast of flat to 5 per centNot to be outdone, Myer said last month that earnings before interest and tax and net profit for the full year to July 25 to show "mid to high single-digit increases", against an earlier forecast of a flat result similar to 2007-08.Mr Moir said key elements of Country Road's strong performance were total sales in the second half up 16.8 per cent and up 18.4 per cent for the full year.He said women's and men's accessories as well as its children's fashion range had performed exceptionally well."All of our divisions are performing strongly ... but the best performers are accessories and kids, and that's been consistent throughout the whole year." He said Country Road had widened the range of accessories it offered and devoted greater floor space to the department.Wholesale sales for the full year of $8 million was attributable to the establishment of Country Road in South Africa.
© 2009 Sydney Morning Herald
