160114. Photo Diego Opatowski / RNZ. Glasson store in Lambton Quay, Wellington Photo: RNZ
Clothing retailer Hallenstein Glasson has posted a steady half year profit as sales rose but higher costs and pressure on margins restrained growth.
The company, which has the Glassons' women's fashion and Hallensteins' men's clothing chains, made a profit of $21.2 million for the six months to February, virtually unchanged from the year before.
Sales revenue rose nearly 8 percent to $240m, but its margins edged lower and its costs rose.
"The reduction in the margin was due to the challenging New Zealand retail environment over the peak trade period. The strengthening USD (US dollar) continued to impact on our inventory purchasing costs," chief executive Chris Kinraid said.
The Glassons chain remained the backbone of the group profit, with strong sales growth in Australia driving a 16 percent rise in profit, while the chain's New Zealand sales were fractionally higher although the profit improved.
The Hallensteins chain continued to struggle with flat sales, reduced margins and profit falling by almost half.
Online sales accounted for nearly 18 percent of all group sales, but the company said were customers shopping in-store as well as digitally.
Kinraid said sales for the first few weeks of the new trading year were more than 5 percent up on last year, but margins remained under pressure.
"The retail environment has remained subdued in the New Zealand market, although we remain well placed as this recovers."
He said significant challenges were expected amid the uncertainty of the current economic environment on both sides of the Tasman and around the world.
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