Hallenstein Glasson sales up on last year, margins improve, chairman Bell says

Hallenstein Glasson, the clothing chain, said sales are tracking above last year after four months of trading and margins have improved, though the Christmas sales period remains critical, chairman Warren Bell says.

The Auckland-based retailer's sales are up 2 percent in the four months ending Dec. 1 from the same period a year earlier, and margins are wider indicating better profitability from 2013, Bell told shareholders at today's annual meeting in Auckland. Still, the Christmas period remains important to the first half, and shareholders will be updated in January.

"The next few weeks to Christmas are critical to our success for the balance of the summer season, but we are confident the business is in a stronger position than it was at a comparable stage last year," Bell said in speech notes published on the NZX. "As you are aware the next few weeks will have 'such a huge impact' on our first half result, for all chains."

Hallenstein, which operates the Hallensteins, Glassons and Storm clothing chains in New Zealand and Australia, was hit by a poor Christmas trading period last year, which resulted in a 40 percent slump in first-half profit, something it struggled to make up in the second six months of the year.

It has since taken steps to address poor planning and buying in its Hallenstein and Storm chains, but Glassons New Zealand is still a "work in progress" which has been hampered by executive changes, Bell said.

Chief executive Graeme Popplewell said the lack of a Glassons head has been a significant disruption for the business, and the company is currently considering some "very credible candidates" with a view to fill the role next year.

The shares rose 2.9 percent to $3.19, and have dropped 20 percent this year. The stock is rated an average 'buy' based on five analyst recommendations compiled by Reuters, with a median target price of $3.45.