Fashion retailer Country Road is bucking the flat retailing trend, with more bullish, wealthier shoppers supporting continued strong sales at its stores.
The retailer reported a 12 per cent lift in New Zealand sales to $43.7 million for the year ending June 30, while net profit more than doubled to $2.7m.
Country Road, which bought fashion brand Witchery in September for A$172m, said total group sales - including New Zealand, Australia and South Africa - for the six months to December 31 shot up 50 per cent to A$331.3m.
Australia-based chief executive Iain Nairn said while he couldn't disclose first-half sales figures for New Zealand, they were in line with the overall group performance.
Trading at Country Road stores had been strong and sales at Witchery had also improved in the past six months.
The retailer appeared to be taking business off its New Zealand competitors, he said.
"Our feeling is that the market at best is flattish and our improvement in sales in sales is probably resulting in improved market share."
The strong performance compared to other fashion retailers was partly down to a renewed confidence among more affluent consumers, he said.
"They were concerned going into the global financial crisis but I think there's been a period of stability in the last 12 months, there's less worries. Our customer, who is more affluent and more financially aware, considers these things."
Last season's fashion collection had also been a success, with particularly strong performances in certain categories such as coloured denim and dresses.
New Zealand retail did not have the same level competition as the market across the Tasman, where global fashion retailers such as Zara and TopShop had set up, he said.
The Christchurch earthquakes had dampened retail activity here but it had been revived somewhat since the Rugby World Cup, he said.
"I've been a little bit surprised by the turnaround. We thought after the World Cup and all the tourism the market would have been tougher. We're seeing a consistent performance, it's not as erratic as it was during the global financial crisis. We're quietly confident that that will continue.
"Generally consumers are just more buoyant [in New Zealand], that's what we're being told."
Country Road said sales in Australasia for the half-year ending December 31, including sales for the Witchery and Mimco brands since September 30, rose 55.6 per cent to A$294m.
Same store sales were up 10.7 per cent.
It projected group profit before tax for the half-year would be between A$26m and $29m, up from $13.7m the previous year.
Country Road is listed on the ASX but almost all its shares are owned by two investors, according to the Sydney Morning Herald.
Australian retail billionaire Solomon Lew's Australian Retail Investments owns nearly 12 per cent, while South African group Woolworths (unrelated to the Australian Woolworths business) holds just shy of 88 per cent.
- ? Fairfax NZ News
Source: http://www.stuff.co.nz/business/industries/8196016/Country-Road-rides-out-retail-storm
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