Sheets and pillows are defying Australia's retail crunch

An oversized sculpture by artist Will Ryman. Peter Macdiarmid/Getty Images

Adairs, the manchester retailer, has turned around its business to find growth in sheets and pillows.

The company had a poor start to the financial year with softer than expected Christmas trading, a common theme reported by other retailers.

However, sales grew in the second six months by 1%, overturning the drop of 4% in the first half.

And in the fourth quarter, like-for-like sales were up 3.8%, with momentum continuing into the first eight weeks this financial year with like-for-like sales growth of 13%.

“Over the course of the second half of FY17 we successfully re-balanced our range, largely correcting the issues within some of our key product categories, and stabilised the underlying profitability of the business,” says CEO Mark Ronan.

However, the company posted a 19.6% fall in full year profit to $21 million. Sales were up 7.1% to $265 million but like-for-like sales fell 1.4% over the 12 months.

Dividends for the full year are a fully franked 8 cents a share, down from 11.5 cents last year.

“The pleasing second half result has positioned the business for growth in FY18,” says Ronan.

“The previous product range issues have been largely addressed and we have seen the business return to like-for-like sales growth in June.

“With renewed confidence in our product execution, and continual improvement in our promotional and in store execution, there is improved momentum within the business.”

The company says sales for 2018 will be between $285 million and $300 million.

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