Oroton flags earnings could fall more than 75 per cent
Australia's Oroton Group said this week its full year underlying earnings could fall more 75 per cent, on the back of continued sales losses for the luxury handbag and fashion retailer.
In a filing, Oroton said sales fell 11 per cent in first nine months of its financial year including April, with the decline extending from a 10 per cent slump in the first six months. Consequently, Oroton predicted underlying earnings of just A$2 million to A$3 million for the full financial year, down more than 75 per cent from $12.9 million in the prior year.
The downgrade caused Oroton shares to hit an 18-year low of $1.00 in trade earlier in the week , and ending Monday down 19.6 per cent at A$1.085, a loss of more than A $11 million from the company’s market value.
"Challenging conditions experienced across the retail market in April 2017, with low consumer confidence and a competitive market, has meant the group's April mid-season sales were below management's expectations and reflected a further decline from that seen in the first half," Oroton's interim chief executive Ross Lane said in a statement.
Lane replaced Oroton Group's former CEO Mark Newman last month. Newman left his post after the group posted a devastating double-digit net profit slump in the first-half of the fiscal year. Rose Byrne, Oroton's celebrity face, was also told her contract will cease. The Australian actress has fronted the Oroton brand for the last three years, with an Oroton Group spokesperson confirming Byrne's contract would not be renewed.
The group will “transition away from Rose Byrne to younger influences — [at a] lower cost," it said, in a statement.
It's been a dire year for Oroton. In the six months ending January, Oroton Group's net profit slumped 52% to $1.8 million following a 10 per cent drop in group sales to $67.1 million.
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