Learn To Invest
Stocks Special Reports LICs Credit Funds ETFs Tools SMSFs
Video Archive Article Archive
News Stocks Special Reports Funds ETFs Features SMSFs Learn


Oroton weighs options after hefty loss

Petrina Berry  |  29 Sep 2017Text size  Decrease  Increase  |  
Email to Friend

Page 1 of 1

BRISBANE - [AAP] Embattled luxury handbags retailer Oroton (ASX: ORL) is looking at its options, including selling to new owner, after falling sales and the demise of its Gap stores pushed it to a full-year loss.

The iconic Australian accessories brand, founded 79 years ago, sank to a $14.3 million full-year loss in the year to July 29 compared to a $3.4 million profit the prior year.

This was largely due to a significant slump in sales during key trading periods at its Oroton and Gap stores and costs linked to its decision to end its tie-up with the US apparel brand.

All six of its Gap stores will close by the end of January.

Interim chief executive Ross Lane, the grandson of Oroton founder Boyd Lane, said he was disappointed with the result and the group was considering its options.

"The progression of the strategic review continues to be a key priority which may include a sale, refinancing of debt facilities or recapitalisation of the company," he said in a statement to the ASX on Friday.

"While the group continues to engage with interested parties in the process, there is no certainty this process will result in a proposal or transaction for OrotonGroup."

The group's underlying earnings before interest, tax, depreciation, amortisation and impairment of $2.7 million for the year to July 29, was down from $12.9 million in the prior year, but in line with Oroton's guidance given in May.

Revenue was down 9.7 per cent to $123 million compared to a year ago, partly due to an 11 per cent fall in its Gap stores' sales.

While the Oroton brand's stores had a 1.3 per cent lift in sales of its core categories, loss sales from categories it is shedding, including apparel, footwear and lingerie and reduced factory outlet sales weighed on the group's revenue.

Mr Lane said the first eight weeks of the 2018 financial year has shown a lift in sales and profit margin compared to the 2017 financial year and Gap is trading in line with the group's exit plan.

He said Oroton brand's constant currency gross margin is above the prior year and is a good sign given aggressive discounts in Oroton Factory Outlet stores.


* $14.3m net loss for 2016/17, down from $3.4m 2015/16 profit

* Revenue down 9.7 pct to $123.2 million

* No final dividend, compared to 2 cents a share in 2015/16


AAP logo image

© [2017] Australian Associated Press Pty Limited (AAP) or its Licensors. This is the Morningstar service with content provided by AAP where indicated. AAP reserves all rights, including copyright, in services provided by it. The information in the service is for personal use only, does not constitute financial product advice (whether general or personal) and may not be re-written, copied, re-sold or re-distributed, framed, linked or otherwise used whether for compensation of any kind or not, without the prior written permission of AAP. You should seek advice from a professional financial adviser before making decision to acquire or dispose of a financial product.

This service is published for general information purposes only without assuming a duty of care. AAP is not in the business of providing financial product advice (whether personal or general advice), and gives no warranty, guarantee or other representation about the accuracy of the information or images contained in this service. AAP is not liable for errors, omissions in, delays or interruptions to or cessation of the services through negligence or otherwise. The globe symbol and "AAP" are registered trademarks.

Email To Friend