Monday, July 25, 2011
NZ jobs to go as Aus owner closes fashion stores
Jobs will be lost at fashion stores around New Zealand after the Australian owner of Just Jeans, Jay Jays, Portmans and Jacqui E announced store closures.
Premier Investments says it will close up to 50 "loss-making stores" in Australia and New Zealand at the end of their leases.
The ASX-listed operator of the chain stores also owns youth-focused fashion store Dotti, sleepwear brand Peter Alexander and novelty stationery shop Smiggle.
The Melbourne-based company - which operates as Just Group - says once the stores are closed it will focus its business online, and on the Peter Alexander and Smiggle brands.
"The internet is already Just Group's largest store, with Peter Alexander in particular having a strong online business," said CEO Mark McInnes in a statement.
Just Group has not identified exactly where the cuts will come but did confirm staff would be laid off as it aims for "significant labour force efficiencies".
The closures will cost the business between $17 million and $20 million.
Market analyst Gretchen Williamson from Craigs Investment Partners told TV ONE'S AMP Business today that lay-offs in retail are becoming a trend.
"The human cost is somewhat alarming, there are a number of jobs that will go in this move," she said.
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"Margin has remained under pressure as industry-wide discounting has increased," McInnes said. He said the current school holidays are not providing the uplift the company expected.
In the next three years, Premier plans to open 15 to 30 Peter Alexander stores in Australia, and 30 to 50 Smiggle stores on both sides of the Tasman.
Smiggle sells funky stationery in malls and McInnes describes it as "a unique brand in a highly attractive market" but says it is under-represented in Australia and New Zealand.
It is also looking at between 12 and 20 more Smiggle stores in Singapore, with a view to expanding deeper into Asia.
McInnes said online retailers and overseas-based brands like Zara and Top Shop - which have recently opened stores in Australia - are adding to the pressure on other retailers.
Premier Events expects to report full-year pre-tax earnings of between $A64 million and $A66 million, rising to a range of between $A80 million and $A95 million in the 2012 financial year.
The ASX-listed shares fell 2.6% to $A5.17 in trading yesterday, and have dropped 16% this year.
- with BusinessDesk
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