Early poll call adds to retail challenge, says fashion boss
SPECIALITY Fashion Group chief executive Gary Perlstein has labelled the decision by Prime Minister Julia Gillard to announce this year's election eight months out an "absolute disaster" for retail.
He said the early election call only added to the challenging trading environment that retailers such as Specialty Fashion Group were already facing. The group owns a portfolio of fashion banners including Millers, Katies and Crossroads.
"Election periods always, always, affect us and the fact that it has been called so early is an absolute disaster," Mr Perlstein said.
"That's what people's attention will turn to and, from a retail perspective, it could have been the worst thing to happen."
Mr Perlstein made the comments as Specialty Fashion Group reported a net profit of $18 million for the six months to December, a 192 per cent increase on the previous corresponding period.
It declared an interim dividend of 2¢ a share, fully franked. Shares responded positively to the profit and the reinstated dividend, closing up 7.9 per cent at $1.025.
Mr Perlstein said the improved result was built on widening margins and a 2 per cent lift in comparable store sales. Margins should continue to increase this half, helping to deliver a better second half financial result.
"We have said we will see another 150 margin basis point [improvement] on top of last year's second half," he said.
"That will come from the same strategies that improved the gross margin in the current results, from our design-led strategy where we are no longer going overseas like to London and the US copying global players, then going via China and knocking it off.
"We have actually invested in our own design capabilities so we have our own unique product.
"That gives us a point of difference in the marketplace," Mr Perlstein said.
For the first half, operating cash flows were $14.3 million higher than the first half of the previous year at $46.2 million due to the improvement in profitability and the efficient management of working capital.
Specialty Fashion Group ended the half-year with a net cash position of $45.6 million, with these funds to be directed towards the company's ecommerce capabilities and online store, which would be a key driver of sales.
"We have no debt, the company is in a very strong [cash position] to make the investments in the whole omni-channel experience, that's key to have the strength to make those investments."