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| Best foot forward |
   
Posted Date: 21/02/2012
By Inside Retail
Better margins have allowed RCG Corporation - parent of The Athlete’s Foot in Australia - to post a record half year profit on declining sales.
In the six months to December 25, RCG lifted its net profit by 5.8 per cent to $5.75 million.
The company says The Athlete's Foot recorded total group sales of $86.6 million, a decrease of 2.3 per cent on the same period in the prior year with like‐for‐like sales down four per cent to $84 million.
“Despite the slight reduction in group sales, through improved operating efficiencies TAF was able to maintain its profits at the same level as those of the prior year, reporting EBITDA of $5.4 million in both periods,” the company said in a statement.
Sales have improved significantly since the end of December, with sales for the seven weeks since then up 3.5 per cent on a like‐for‐like basis.
Chairman Ivan Hammerschlag said The Athlete’s Foot results are good considering ABS data shows the retail footwear and accessory sub‐category was down 5.9 per cent for the six months to December 2011.
“This suggests that TAF continues to over‐perform relative to the sector and continues to grow its market share. Moreover, the business has had extremely strong growth in the same period over the past four years, creating an exceptionally high base. Average like‐for‐like growth in the same period over the last four years was 7.3 per cent,” he said.
Since the beginning of the financial year, The Athlete's Foot has opened two new stores, including one in New Zealand, taking the total to 149 stores. It has also converted four stores to the larger format, bringing the total number of such stores to 39 as at the end of December. At least two morestores will be converted before the end of the financial year.
“TAF is making a substantial investment in the technology, infrastructure and personnel to build a best practice e‐commerce extension to the business. This investment will deliver an integrated, multi‐channel experience to TAF customers both online and in‐store and will reinforce TAF’s authoritative market position The new e‐commerce capability is to be launched during the last quarter of the financial year,” the company said.
“Delivering an integrated, multi‐channel, customer centric, offering is a key focus of the business. We are confident that multi‐channel retailing will become a significant part of the TAF business in the short term and are working hard to deliver the best possible solution,” said Hammerschlag.
RCG’s Shoe Superstore chain recorded total sales growth of 50.9 per cent from $2.44 million to $3.69 million for the half‐year. Like‐for‐like sales were down 3.5 per cent on the prior year. Four new stores ‐ three in Melbourne and one in Newcastle ‐ were opened during the period.
The chain delivered a $210,000 loss for the period due to expansion costs.
SSS launched a new ecommerce site in January, delivering significant usability and functionality enhancements. Online sales since the launch of the new site are up 148 per cent on the same period in the prior year.
Said Hammerschlag: “The online channel presents significant opportunity for Shoe Superstore. Ongoing investment in, and focus on, the online channel is expected to be a major focus and driver of growth over the coming months. Online sales currently account for more than 15 per cent of SSS’s turnover and we are confident that the additional investment will ensure the continued strong growth of this channel.”
Shoe Superstore will consolidate its first‐half new store openings and bed down its infrastructure and new ecommerce site before rolling out any more stores.
RCG Brands, the company’s wholesale and distribution division, recorded sales of $11.45 million for the half year - an increase of 47.6 per cent on the previous year’s $7.76 million. This growth is driven by an increase in Merrell sales of 31.1 per cent and the commencement of the CAT (Caterpillar) distribution business, which contributed $990,000 in sales during the half‐year.
EBITDA for the half‐year was $1.92 million, an increase of 36.2 per cent on the previous year’s $1.41 million. The division is on track to achieve sales growth of 35 per cent and at profit growth of at least 20 per cent for the 2012 financial year, said RCG. |
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