Rivers drags down earnings

CLOTHING retailer Specialty Fashion has flagged a slide of up to 32 per cent in its first-half earnings due to losses linked to its troubled Rivers brand.

CLOTHING retailer Specialty Fashion has flagged a slide of up to 32 per cent in its first-half earnings due to losses linked to its troubled Rivers brand.

The company, which also owns the Katies and Millers women’s fashion chains, expects earnings before interest, taxation, depreciation and amortisation for the six months to December 31, to be between $21 million and $23m. That’s down from $31.2m last year.

The slide is linked to an estimated $11m loss from Rivers, which the company has been trying to turn around after buying it for just $3.9m in 2013.

Specialty chief executive Gary Perlstein said the company’s other businesses, including the Katies and Millers chains, had performed well but heavy discounting had hurt Rivers.

“Continued discounting activity, while crucial to accelerate the improvement of the Rivers business in the medium term, has had a significant negative impact on our margins in the short term,” he said. “Nevertheless, we remain confident that Rivers will make a meaningful contribution to the company’s profitability in future years, alongside our other brands.”

Excluding Rivers, Specialty Fashion recorded comparable sales growth of 5.7 per cent in the six months to December 31, while total sales jumped 27.4 per cent to $413m. Speciality Fashion shares ended 2.5c higher at 73.5c.

AAP