The one big hope for retailers is to have the biggest Christmas shopping season as possible, and have throngs of buyers through the stores. Fashion apparel retailers have had to order everything well ahead, so if their targets are off, and not as many customers show up as expected, they will have to discount to clear stock.
Cutting costs and improving the bottom line is a big priority for Pacific Brands (ASX: PBG), after coming back in 2013 with a $73.8 million net profit after tax and abnormals, following heavy write-downs in 2012.
The company famous for King Gee and Hard Yakka workwear and Bonds underwear announced in November that it will be moving its workwear division's call centre in Melbourne overseas to Manila as an upgrade for customer service improvement.
In October Pacific Brands said that first half EBIT and NPAT may be materially down compared to the corresponding previous period. This is due to trading conditions, investments, a downturn in the workwear market and non-renewal of certain licences in its homewares, footwear and outerwear division.
Specialty Fashion Group (ASX: SFH) has made a recent acquisition of the Rivers bargain clothing chain for $5 million, reportedly below its book value. The chain has 160 stores, and Specialty Fashion is planning to invest about $4 million into them over the next two years to revitalise the business.
Specialty Fashion Group is known more for its women's fashion by such brands as Millers, Crossroads, and Katies. This acquisition will complement the business with men's and children's clothing, and enhance its position in the mature, value clothing segment.
Premier Investments (ASX: PMV), the operator of the Just Group subsidiary which has such brands as Just Jeans, Jay Jays and Portmans, said in its AGM meeting that it was getting ready for the entry of its Smiggle stationery stores in the UK.
It believes that potentially there is opportunity to open as many as 200 stores over the next five years, and expects profits could surpass those of its Australian stores. It plans to have around 8 stores opened within this financial year.
Foolish Takeaway
The result of this year's Christmas will give an indication as to how well the economy is bouncing back after a year of uncertainty. With low interest rates and the general consumer sentiment up, the holiday season's revenues have better prospects now.
