The clothing retailer saw net profit after tax of $8.8 million for the half year compared to $5.9 million for the prior corresponding period, which saw an increase of 49.2 per cent.
Half-year losses at clothing and footwear label Rivers were halved to $5.2 million from the $11.2 million in the previous corresponding period as the Specialty Fashion Group Limited finished clearing old stock and closed Rivers’ warehouse, shifting distribution to Sydney.
The underlying earnings before interest, taxation, depreciation and amortisation was $27 million, which includes the loss of $5.2 million attributable to Rivers, compared with underlying EBITDA for the previous corresponding period of $22.6 million, which compared the loss of $11.2 million due to Rivers.
The company said the results show significant improvement from the prior corresponding period.
“The improved performance of Rivers during the half is extremely encouraging. We are on track with the transformation of this iconic brand. There is hard work still to go, but the worst is now behind us,” said Gary Perlstein, Specialty Fashion Group’s CEO.
Perlstein said he is confident Rivers will “start trading profitably during the FY 2017 period.”
The company bought Rivers from founder Philip Goodman for the price of $4 million about three years ago.
Specialty Fashion’s gross capital expenditure amounted to $7.6 million for the half year compared to the $10.7 million in the previous corresponding period, with the funds mostly spent on store refurbishment and the opening of 17 new stores, the continued focus on Millers’ brand rejuvenation, and on the integration and turnaround of Rivers.
Specialty Fashion announced it plans to open seven new stores and refurbish 27 existing stores during the second half of FY 2016.
The company’s digital sales grew to $39.1 million for the half, which represents 9 per cent of total revenue, an increase of 58.9 per cent or $14.5 million from the previous half.
“It’s clear customer enthusiasm for online shopping continues to grow across all demographics. Customers have significantly better online choice and service from all retailers, and it is essential we continue to provide an online experience that delivers and exceeds expectations,” Perlstein said.
He added the company is expecting the “growth in online digital retail will continue throughout FY2016.”
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