Oroton profits have slumped over cost blow-outs for Brooks Brothers and Gap

The first GAP store in Australia at Westfield Sydney shopping complex. Cameron Spencer/Getty Images

Oroton posted a full year 68% fall in profit to $2.6 million, dragged down by the cost of establishing Brooks Brothers and Gap in Australia.

However, revenue was up 5.7% to $132 million and the outlook for 2016 is better with good sales in the first few weeks of the financial year.

Oroton has exited its Brooks Brothers joint venture with Brooks Brothers International and Gap sales have improved.

CEO Mark Newman says 2015 was a challenging year, reflecting the short-term effects of repositioning the core brand to one of affordable luxury and the expansion of Gap.

“It is pleasing to note positive and accelerating momentum from all of the initiatives that we’ve undertaken,” he says.

Sales in the first seven weeks of the 2016 financial year were up 11%.

In Asia, Oroton closed three loss-making stores but opened six, including those at department store concessions in Singapore, Malaysia and China and one free-standing store in Singapore.

The company declared a fully franked final dividend of 2 cents a share.

Oroton shares were up 2.6% to $2.30.

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