Pink pencil cases and pyjamas save Premier from building collapses, store closures and an earthquake

PINK pencil cases and pyjamas have saved retail group Premier from a disastrous six months in its clothing stores Portmans, Dotti and Jacqui E.

PINK pencil cases and pyjamas have saved retail group Premier Investments from weak sales in its traditional clothing businesses.

Solomon Lew’s retail giant, which includes stationery chain Smiggle, sleepwear chain Peter Alexander and clothing stores Just Jeans, Jay Jays, Dotti, Jacqui E and Portmans, posted a slight rise in its first-half profit to $71.9 million.

Total sales revenue grew 7.1 per cent to $588.6 million in the six months to January 28 compared with the same period a year earlier, while underlying earnings rose 10.6 per cent to $93 million.

Global sales at Smiggle were up 26.4 per cent during the half, sales at Peter Alexander increased 13.8 per cent, and online sales across the group grew by 48 per cent.

“These results were achieved in a half that saw several Australian discretionary retailers go out of business while others have reported significant decline in earnings,” Mr Lew said.

“At the end of the first half, Smiggle had 272 stores across Australia, New Zealand, Singapore, England, Scotland, Wales, Malaysia and Hong Kong. The brand has opened globally more than one store a week for the past 12 months with results ahead of expectations.”

Mark McInnes, chief executive of Premier Retail, said: “We are relentlessly focused on implementing our strategies — investing in expanding Smiggle globally, growing Peter Alexander significantly and delivering a world-class online experience for our customers while achieving ongoing cost efficiencies and continuing to invest in our core apparel businesses.”

The news was less positive in the clothing business, with Premier saying the cool start to summer “led to both a negative impact on total and like-for-like sales that directly led to gross margin decline as all clothing brands were forced to compete on price with all retailers to clear inventory across the critical Christmas quarter”.

Premier’s apparel brands were also impacted by “significant external events” including the temporary closure of four Hobart stores in July due to the partial building collapse at the Cat & Fiddle Shopping Centre, the closure of all Chadstone stores in the first quarter due to the centre’s redevelopment, and November’s Wellington earthquake which caused temporary closures of 26 stores.

Just Jeans delivered “strong sales growth” of 4.7 per cent, Jay Jays had a “challenging” first half with sales up 3.3 per cent, while Dotti sales were up 0.5 per cent and Jacqui E sales fell 2.5 per cent after excluding one-off impacts of Hobart, Chadstone and the New Zealand earthquake.

Portmans fared the worst, with sales down 5.8 per cent. “This result was in part due to a cooler start to summer and some poor fashion choices,” Premier said, adding that “give the market opportunity” for the brand, the decision was taken to “strengthen and revitalise” its senior leadership team.

The company has raised its interim dividend by 13 per cent to 26 cents a share.

[e-mail]