Clothing retailer Hallenstein Glasson Holdings reported a full year net profit down 19.3 percent to $12.8 million as margins were eroded in tight trading.
The decline in profit for the year to August 1 compared to the previous 12 months, came despite a 2.3 percent rise in total sales to $198.2m.
Chairman Warren Bell said retail conditions had been particularly difficult in the first half of the year, but there were signs that economic conditions had stabilised, albeit at a low level in the latter part of the year.
"The battle for market share has resulted in margin erosion," he said.
But the company tightly managed its inventory with inventories at balance date $15.2m, down 9 percent on the previous year. The net cash position improved from $18.4m to $26m.
A final dividend of 11c per share is to be paid, up from 10cps a year ago.
Hallenstein Glasson said it expected its trading performance to improve but was unable to provide any future profit guidance for now. It would give an update at its annual meeting in December.
Chief executive Roy Dillon said the result reflected the strategy developed last year to drive sales and retain market share, which would protect the business and position it to benefit as market conditions improved.
For the second half of the year profit rose 10 percent on a year earlier, mainly driven by improved performance from Glassons in Australia, Mr Dillon said.
The company was particularly encouraged by results in Australia, where it had implemented new strategies to improve its business model.
Same store sales in Australia improved 12.5 percent in Australian dollars, with most of the improvement generated in the second half of the year. One new store was opened at Doncaster, Melbourne in August 2008.
New Zealand had a more difficult environment, although new womenswear chain Storm bucked the trend with encouraging results, Mr Dillon said.
Same store sales for Storm lifted 12 percent for the year, and a further store was opened in Milford, Auckland last October.
Since balance date, two further Storm stores have been opened, inNapier and Christchurch, taking the Storm total to six, with further stores to be opened as suitable sites become available.
Glassons opened one new store at Blenheim and Hallensteins added a further store at Masterton in March, with the group now having a total of 116 stores.
With the exception of Storm, there would be a period of consolidation before further store openings were planned for Glassons in Australia and New Zealand, and also for Hallensteins.
Hallenstein Glasson shares closed at $2.94 yesterday, having fallen from $3.82 earlier in September.
