The weakening retail environment and slowing economy have not stopped high-end retailers David Jones and Oroton from producing impressive profit results for 2007-08.
The weakening retail environment and slowing economy have not stopped high-end retailers David Jones and Oroton from producing impressive profit results for 2007-08.
This morning, David Jones posted a net profit excluding one-off items of $137.05 million for the 12 months to 18 July, up 25.1% on the previous year. Total sales revenue grew 5.8% to $2.098 billion in the year, while like-for-like sales rose 4.5%.
Luxury goods company Oroton produced a 70% increase in net profit for the 12 months to 28 July to $16.7 million, compared with $9.8 million last year. Sales increased from $110.2 million to $122.6 million.
Both companies believe they can weather the slowing economy.
David Jones chief executive Mark McInnes says the company’s sales in the first eight weeks of the year were in line with budget and he remains confident the company can achieve its guidance of at least t 5% to 10% profit after tax growth in 2008-09.
Oroton plans to spend $13 million on capital expenditure next year and will open three new Polo stores and eight new Oroton stores.
But Just Group, owner of the Just Jeans, Dotti and Portmans chains, is clearly struggling, and its profit fell from $63.9 million to $49.1 million. New owner billionaire Solomon Lew, head of Premier Investments, says the global credit crunch has made shoppers very nervous.
Still, the famed retail bargain hunter remains on the lookout for acquisitions and has a $300 million war chest for more deals. He expects the price of retail businesses will continue to fall because of slowing retail sales and tight credit conditions.
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