Postie takes hit to be 'competitively positioned'
Clothing retailer Postie Plus Group reported a loss of $183,000 for the year to August 5 compared with a net profit of $656,000 for the previous year, due to restructuring costs.
Those costs relate to the sale of its lower -argin infant gear Babycity brand in May, and moving its marketing and distribution centres to Auckland.
Chairman Richard Punter said the performance reflected the group's decision to restructure the business, selling off Babycity and focusing on growing the Postie brand, in order to be "competitively positioned" when consumer confidence recovered.
“We took the hit now with costs associated with the sale of Babycity, which no longer fitted our business model, and the decision to recruit new retail expertise, outsource our distribution systems and processes to a new purpose-built centre at Mangere airport and begin a progressive shift of key marketing and other functions to Auckland,” he said.
The company reported a "normalised" full year net profit of $493,000 before those one-off restructuring costs. Shareholders will receive a fully imputed dividend of one cent per share on December 14.
A 4.24 per cent fall in sales revenue to $111 million from $115.7m the previous year reflected the continuing flat trading conditions and the sale of the Babycity stores, Punter said.
However the Postie brand had maintained margins and sales volumes.
Chief executive Ron Boskell said during the period under review two new stores had been opened and four closed, including one affected by the Canterbury earthquakes, while the other three were combined with existing stores.
A nationwide store refresh programme was also rolling out on schedule, overseen by newly appointed general manager Jane Gammon.
A new store had opened in Wellington in the current financial year, and another three stores will open in Auckland. The group now has 83 stores around New Zealand.
The group was now fully compliant with its banking covenants, Boskell said. The specialty apparel market had had no growth for four years, but the group was satisfied with its own position.
"We're comfortable where we're sitting in what is continuing to be a very, very tight sector in the retail market."
The clothing retailer was still looking to acquire a complementary business.
"But it has to be the right fit at the right price at the right time," Boskell said.
Postie shares closed flat at 24 cents a share yesterday. The stock has traded between 20 and 30 cents a share over the past 12 months.