Oroton profits dive 52% on poor performing Gap stores
Oroton Group said on Tuesday profit for the first-half of fiscal 2017 fell 52%, on the back of a sales slump caused mostly by a poor performing Gap, which the Australian group operates locally.
Oroton Group said sales fell 10 per cent to AU$67.1 million (US$51.28 million) in the six months ending January 28, caused by discontinued categories, lower sales at outlet stores and poor sales at Gap full-price stores.
The group's comparable sales contracted 11 per cent, a mirrored contrast to the 11 per cent uptick for the same period last year. The biggest same-store blow came from Gap, with sales plummeting 12 per cent, compared to a 6.4 per cent increase in the previous period.
Gap's woes lead to a weak profit result at Oroton Group, where net profit slumped 52.1 per cent to AU$1.8 million (US$1.3 million). Earnings before interest, tax, depreciation and amortisation fell 43.5 per cent to $5 million.
"Clearly this is a very disappointing first-half result for the group," said Oroton Group chief executive Mark Newman.
"Positive trade in the second-quarter up to Christmas Day was outweighed by sluggish sales in the first quarter and the much-publicised, highly discounted and soft retail market from Boxing Day onwards where foot traffic to all stores, across all channels and both brands, was lower than last year."
Oroton confirmed on Monday it had bought a 30 per cent stake in The Daily Edited for $4.5 million in cash and shares.
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