Business Description:
OrotonGroup Limited (ORL) is a wholesaler and retailer of clothing, leather, and other fashion accessories. The Group owns and manages the Oroton brand and is the sole licensee of Polo Ralph Lauren clothing in Australia and New Zealand. The Group distributes its branded products through its own retail outlets and via wholesale customer relationships with other retailers such as David Jones and Myer.

Strategy Analysis:
Merchandise is marketed as high quality luxury items for aspiring consumers. The premium status of the brand is protected through steady product pricing with significant discounting restricted to traditional retail sales periods. Product and category expansion is a focus, and modern store designs seek to enhance the shopping experience. Management has embraced the online revolution with a significant effort in developing an online capability. Asia is also an opportunity where the brand receives good recognition and ORL can take advantage of lower operating costs and rising affluence. Management is considering the acquisition of complementary brands with similar market positioning and brand awareness as Oroton. OrotonGroup reported NPAT up 7.9% to $24.79m for the year ended 30 July 2011. Revenues from ordinary activities were $164.42m, up 12.3% from the same period last year. Diluted EPS was 60.57 cents compared to 56.10 cents last year. Net operating cash flow was $23.99m compared to $24.58m last year. The final dividend declared was 28 cents, taking the full year dividend to 50 cents compared with 48 cents last year.