Specialty Fashion chief Gary Perlstein has no regrets on Rivers plunge and expects the brand to bounce back

SPECIALTY Fashion chief Gary Perlstein says he has no regrets about buying the Rivers business, despite the major turnaround needed to restore the embattled brand.

Specialty Fashion Group chief executive Gary Perlstein at Katies store in Eastgate Shopping Centre at Bondi Junction, Sydney.

SPECIALTY Fashion chief Gary Perlstein says he has no regrets about buying the Rivers business, despite the major turnaround needed to restore the embattled brand.

Mr Perlstein says the ­revamp of the fashion brand is starting to bear fruit and he ­expects it will be profitable next year.

Specialty Fashion, whose brands also include Katies, Millers and City Chic, snapped up Rivers for the bargain-basement price of $5 million in ­November 2013, but has faced an uphill battle to turn the business around.

But Mr Perlstein told Business Daily yesterday that he was “100 per cent” confident in the acquisition and would do it again given the chance.

“Rivers will return to profitability and when we look at what that will be able to deliver on the metrics, we will have ­acquired it at a very fair multiple,” he said.

As part of a cost-cutting drive, the group closed three warehouses in Ballarat and Rivers’ head office in Melbourne, centralising operations in Sydney, where Specialty Fashion is based.

Mr Perlstein said a return to quality fashion had helped halve Rivers’ underlying losses — a figure that strips out “one offs” — for the six months to December compared with a year earlier. Online sales at Rivers had increased 55 per cent, he said, while customers were responding well to a trial of a new-look store layout.

Across the group, Specialty Fashion chalked up a healthy 50.6 per cent lift in net profit to $8.81 million, up from $5.86 million last year.

Revenue for the six months rose 5.2 per cent to $434 million. Shares in the group surged yesterday after the ­result was released, closing 8c, or 15.4 per cent, higher at 60c.

Mr Perlstein said a rejuvenation of core brand Millers had good momentum, while City Chic had been successfully launched in Nordstrom and Macy’s department stores in the US.

Speciality Fashion has not paid a dividend since 2014, when it paid a final dividend of 2c for the year to June.