Retail brand owner Premier Investments says it is enjoying great success from its shops in Singapore and plans to push into other Asian markets.
Premier Investments, which owns retailers including Just Jeans, Jay Jays, Peter Alexander and stationery brand Smiggle, today posted a 68 per cent profit rise and said recent retail sales have been stronger than in the previous year.
The group, which comprises Premier Retail and other investments, made a net profit of $68.2 million in the year to July 28, up from $40.5 million in the prior year, driven mainly by $27.8 million in cost reductions.
The prior year’s net profit had included an $11 million restructuring cost.
Earnings before interest and tax for Premier Retail rose 23 per cent to $80.4 million, despite the challenging retail environment.
But overall retail sales were down 4.3 per cent to $829.14 million and 6.7 per cent lower on a like-for-like basis, which takes out the impact of new or expanded stores.
Premier said its 13 Smiggle stores in Singapore - 10 of which opened in fiscal 2012 - were performing exceptionally well, and the group had identified Malaysia and Japan as the next markets to target in a push into Asia.
New Smiggle stores are expected to open in Malaysia and Japan in late 2013.
There was potential for more than 30 stores in Malaysia and 15 to 30 stores in Japan in the next three to five years.
"The structural issues that we’re facing in Australia are not faced in Asia at all,” Premier Retail chief executive, and former David Jones boss, Mark McInnes said.
Asian markets had big populations, high economic growth and "lots of consumerism", and if a product was unique it could do well there.
Premier, whose chairman is billionaire businessman Solomon Lew, had spent more than nine months considering which countries to launch into next.
"Both Malaysia and Japan give us the next best opportunity for Smiggle,” Mr McInnes said.
"Not forgetting that we do have another five to 10 stores that we could open to Smiggle in Singapore, and we are evaluating the launch of a Peter Alexander business in Singapore at the same time.
Mr McInnes said internet sales had lifted by 67 per cent, and the upgraded Dotti website launched in March 2012 had produced "incredible results".
"We’ve also launched mobile technology, and it’s been highly successful,” he said.
"The results that we are getting from young girls buying from their mobiles late at night is incredible."
Mr McInnes said trading in the first seven weeks of the current fiscal year had been positive, with both total sales and like-for-like sales up on last year.
The second quarter, which includes the Christmas trading period, would be the most important part of the year for Premier Retail, and it was too early to determine whether stronger sales would continue.Shares in Premier Investments were 45 cents, or 8.69 per cent, higher at $5.63 at 11.06am.
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