Clothing retailer Specialty Fashion Group Ltd. (ASX: SFH) today announced it expects earnings for the half-year ending December 2014 to be between $21-$23 million on sales of $413 million. Comparable store sales growth was up 5.7%, compared to the prior corresponding period, excluding the numbers around its acquisition of the Rivers business.
The group attributed the positive result to improved margins in a highly promotions driven environment, a successful cost reduction program and strong performance from its Millers brand. The group also operates the Katies, Crossroads, Autograph, Chic Chic and Rivers brands.
The Rivers acquisition remains a turnaround project as Specialty fashion stated that Rivers had suffered from years of aggressive discounting and inventory accumulation. The group though remains confident in its strategy to turn around the Rivers business and ensure it delivers a meaningful contribution to overall profitability in future years.
This would appear a decent result for Specialty fashion over a period which has seen other retailers like OrotonGroup Ltd (ASX: ORL) and Myer Holdings Ltd (ASX: MYR) deliver disappointing sales numbers.
The broader economic picture for apparel retailers remains one of soft consumer sentiment in the face of rising unemployment and real wage growth hitting a brick wall. Indeed Specialty Fashion's share price has declined around 19% over the past year and although up 2% today it still remains only marginally above 52-week lows.
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