Oroton, Ralph Lauren to split

OROTONGROUP shares are expected to get smashed when the stock resumes trading today after the company announced that it had lost the licence exclusively to distribute Ralph Lauren in Australasia as of next June 30.

OROTONGROUP shares are expected to get smashed when the stock resumes trading today after the company announced that it had lost the licence exclusively to distribute Ralph Lauren in Australasia as of next June 30.

The company, one of the few performers among Australia's listed retail stocks, said Ralph Lauren accounted for 45 per cent of group sales and 35 per cent of net profits.

"After over 23 years developing the Ralph Lauren brand in Australia and New Zealand, we are disappointed to be ending our business partnership," Oroton chairman Ross Lane said.

"However, we are pleased to be in a position to accelerate the expansion of the Oroton brand in Asia and potentially to pursue other opportunities, including capital management."

The company said the business would be transferred to Ralph Lauren corporate next year, with the global brand required to pay Oroton for certain inventory and store assets currently valued at $30 million.

The company is expected to open new stores in Hong Kong and Shanghai next year. It has seven stores trading in Malaysia and Singapore.

Oroton said its 2012 financial year results would be announced on September 20. They were not expected to be affected by this announcement.

Like-for-like sales increased 9 per cent, and the company's net profit "is expected to approximate" last year's $24.8 million result.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles