Tag: ORL

The slide in Australian retailing continues with handbag retailer OrotonGroup collapsing yesterday and being placed into administration.

A bid is expected today or tomorrow to privatise the underperforming luxury products retailer, OrotonGroup.

After all the negative reports this year (profit downgrades, closures, job cuts) for the struggling OrotonGroup, shareholders yesterday grabbed the first bit of good news for a while and gave the shares a solid push higher.

Struggling luxury retailer OrotonGroup will get up to $3 million in credit support from its largest shareholder as the company looks at proposals to sell off assets and break up the group.

The chances of upmarket accessories retailer OrotonGroup being privatised have risen sharply after it revealed yesterday it had hired investment bank Moelis & Company to conduct a strategic review warning of a shock plunge into the red for the 2016-17 financial year.

OrotonGroup (ORL) shares are expected to resume trading later today after the board provides the numbers of flesh out yesterday’s downgrade in five months.

The retail malaise in some parts of the sector has claimed another CEO victim with OrotonGroup (ORL) replacing its CEO of the past four years with its major shareholder as its interim chief executive after in the wake of the company’s disappointing half-year result.

Oroton (ORL) shares slid nearly 6% yesterday after the semi luxury retailer met the lowered guidance targets from a January downgrade, but surprised by omitting its interim dividend.

OrotonGroup (ORL) was the second niche retailer to reveal a solid set of figures yesterday (the other was Premier Investments) and the third this week (Kathmandu on Monday), showing that at least one part of retail is doing well.

OrotonGroup (ORL), the Sydney-based luxury products retailer and distributor, nicely exposed the panic merchants in the market yesterday with its interim profit report and higher dividend.

Shares in OrotonGroup (ORL), the country’s largest domestic luxury goods group, jumped more than 4% yesterday, despite reporting a swingeing 68% slide in earnings for the year to July.

Normally when a company, especially a retailer, has cast doubt on earnings forecasts, investors go into a tizz and sell off the shares.

Shares in local luxury accessories retailer OrotonGroup (ORL) soared 15% yesterday after the company produced a better than expected full year result, with the promise of another solid 12 months to come.

The Australian luxury goods retailer OrotonGroup (ORL) has confirmed that it had a miserable first half, with net profit down by more than 66%, as it forecast in an earnings downgrade last month.

Yet another couple of conflicting reports from the retailing sector yesterday.

Shares in Oroton Group (ORL) rose as much as 3% after the upmarket retailer reported a six month record net profit after tax of $10.4 million.

It’s on a scale much smaller than Coles, but there’s a very clear lesson from the way luxury goods retailer, Oroton group, has gone about its recovery from a near death experience last year by pursuing a determined change in strategy.

The difference in size is enormous: Oroton group is capitalised at just over $110 million with the shares hitting a new 52 week high of $2.60 yesterday, up 30c after the result, or 10 per cent.

Struggling Coles has a market cap of more than $19 billion and the shares rose yesterday on more news about the break up and sale of the company, not an interim profit that was inadequate.

It took some tough decisions at Oroton group: from selling expensively acquired brands in Aldo shoes and the clothing labels, Marcs and Morrissey, significant changes in management with long time CEO, Ross Lane stepping down and new blood appointed. But it worked with interim earnings up 52 per cent to $6.10 million and a higher dividend.

But with not having to flog discounted unwanted product from Aldo, Marcs and Morrissey, the group’s retail margin improved in the half, a sign that the right decisions were made, despite the cost of more than $25 million (based on the purchase cost of the brands).

For all the difference in size the end result now is that Oroton group is at last starting to feed off the very strong retailing conditions, especially where it operates in up-market clothing and leather goods while Coles is stuck in a rut and headed for the corporate knackery.

The incoming CEO was Sally Macdonald who said yesterday that “The comprehensive restructuring program that was announced in September 2006 is firmly on track and early results are pleasing.

“There is significant further work to be completed, and we remain committed to driving the business to its full potential with our two core brands.

“Oroton remains the clear growth driver of the business overall, with stronger profitability and untapped potential.”

She said four new stores were trading well and the company expected to open a further six in the second half while the Oroton online store was also launched in the first half and was trading above expectations.

The company said there had been ‘some wholesale channel problems’ with Oroton’s Polo Ralph Lauren business with solid earnings on the back of an unchanged 11 per cent rise in like for like sales for the half year.

In contrast the company’s old mainstay, the Oroton business, saw an impressive 21 per cent rise in like for like sales in the half and the company is expecting that to improve as the impact of discounting the disposed brands allowed more time and money to be spent on Oroton.

During the first half Oroton sold its Aldo, Marcs and Morrissey businesses, and directors said this cut 10 per cent off the continuing cost base of the company with the savings to be really felt in 2008.