Country Road has announced an overall 4.4 per cent rise in profit after tax for the half year ending December 31, 2010, but a decline in Australian and New Zealand sales.
The profit rise to $9.4 million is a combined figure for Country Road stores across Australia, New Zealand and South Africa. While South African stores have been performing well, the retailer posted a drop of 2.3 per cent for total sales in Australia and New Zealand for the period. Comparable like-for-like sales at Country Road were also down 9.6 per cent.
Country Road director Ian Moir said the absence of the government stimulus injection in the second half of 2010, coupled with rising interest rates had impacted negatively on consumer spending and affected sales in Australia and New Zealand.
“The challenging trading conditions were brought about by a significant drop in consumer spending through the half. However, despite the difficult trading conditions a continued focus on reducing costs and strict inventory management enabled business to improve overall profitability in the first half,” he said.
Despite the slight drop in Australia and New Zealand sales, the brand has invested over $6.5 million in capital programs during the half, including the establishment of seven new stores in Australia – three Country Road and four Trenery. The retailer has also introduced the Trenery ranges in its existing Camberwell and Melbourne Central stores and yesterday opened its first Australian combined Country Road and Trenery store in the Perth Claremont Quarter.
Country Road also launched its new online business in August last year, with customers responding well through the new channel and supporting expansion of the brand, according to directors' reports.
Moir said the economic outlook for 2011was uncertain.
“The directors remain cautious about growth prospects in 2011 and will remain focused on cost and inventory management.”
The retailer, which has 88 concession stores and 68 stand-alone stores (including Trenery) in Australia, released the results on the Australian Securities Exchange today. Country Road also operates 11 stand-alone stores in New Zealand.