The women’s fashion retailer behind the Katies chain has suffered a dip in annual profit but says sales have improved at the start of the new financial year.
Specialty Fashion, which bought the Rivers clothing brand in late 2013, suffered a 3.8 per cent dip in net profit to $12.5 million for 2013/14. Revenue rose 20.3 per cent to $685 million.
The retailer said it had achieved positive comparative sales growth since July 1.
Its focus for this financial year is on integrating the Rivers business, rejuvenate its Millers brand, and expand the City Chic chain in the United States and South Africa.
Specialty said its comparative sales, which strips out the effects of store openings and closures, dipped 0.7 per cent during 2013/14.
However sales rose five per cent in the second half of 2013/14, a turnaround from a 4.9 per cent fall in the first six months of the financial year.
“After a disappointing first half, a much stronger trading performance has been achieved in the second half of the year, with a record Mother’s Day period,” SFG CEO, Gary Perlstein, said in a statement on Tuesday.
“Investments made in our brands, in particular Millers, and our ongoing improvements in supply chain have meant we have managed to continue to increase gross margins despite an adverse exchange rate.”
Perlstein said there was still work to be done on integrating the Rivers business, and an improvement was expected in the second half of this financial year.
Prices on Rivers products would continue to be marked down in the first half as Specialty tries to clear old stock.
There are currently three City Chic stores in California, with three more planned to open in coming months.
Specialty declared a fully franked final dividend of two cents a share.
It did not pay a final dividend in 2012/13.