Jan 12, 2010
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Aussie retailers say sales picked up post-Christmas

Jan 12, 2010

MELBOURNE, Jan 12 (Reuters) -Australian retailers recorded brisk post-Christmas sales that offset a disappointing run up to the key holiday sales period marked by widespread discounts and margin pressures.

The rebound bodes well for Australia's economy, of which nearly a quarter is generated by retail sales, and could improve the flotation prospects of at least three retailers owned by private equity after retail shares underperformed the market in December on sales concerns.

"Post-Christmas somewhat made up for a slower-than-expected pre-Christmas," Richard Uechtritz, chief executive of electronics retailer JB Hi-Fi Ltd (JBH.AX) told Reuters in a interview.

"Certainly post-Christmas made December a good month and January year-to-date has been very good. It is well up on last year," Uechtritz said.

Retailers will officially report Christmas sales in early February. In November, retail sales jumped by 1.4 percent, according to government data..

Supermarket chain Woolworths' (WOW.AX) discount department store unit Big W and recently floated department store chain Myer Holdings Ltd (MYR.AX) said the traditional Christmas period, which can account for as much as one-third of annual profit, met expectations on strong stocktaking sales after a disappointing lead-up.

Big W said homewares and big-screen TVs were the most popular items.

"Sales were brisk and pleasing," at discounter Big W during the stocktake sales," said spokesman Luke Schepen.

Myer said it was pleased with post-Christmas sales after a season in which retailers offered unusually deep discounts.

"Sales have been good but not great, in line with our expectations for the period. Since Boxing Day we have been happy with how the stocktaking sale has progressed," said spokesman Damian Glass.

Myer has forecast a 3 percent increase in sales for the fiscal year and a profit rise of 10 percent, while upmarket rival department store David Jones Ltd (DJS.AX) has forecast profit will rise between zero and 5 percent this fiscal year.

David Jones declined to comment on Christmas sales, but analysts expect it to upgrade its profit forecasts after the holiday period as it has done each year since 2005.

Several private equity firms will be closely monitoring industry conditions as they consider whether to float their retail interests in 2010.

They include Pacific Equity Partners' REDGroup Retail, which owns bookstores Borders and Angus & Robertson; Archer Capital's sporting goods chain Rebel Sport and CHAMP Ventures' Retail Apparel Group.

REDGroup has said it will review its options in the new year, while Archer has hired three investment banks to advise on a planned float in the first half of 2010.

Shares in Australian retailers underperformed the market in December, with David Jones down 8.2 percent, furniture and electricals chain Harvey Norman (HVN.AX) down 5.1 pct and JB Hi-Fi down 3.7 percent.

The benchmark index .AXJO rose 3.6 percent in the month. (Editing by Balazs Koranyi)

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