Shares in Specialty Fashion Group fell hard after the Australian clothing retailer downgraded its profit guidance.
A short time ago, the shares were down 14% to $0.215.
Clothing retailers in Australia have been hit hard by pressure from emerging digital competitors and weak market conditions.
Earlier this year Topshop, Topman, Marcs and David Lawrence all went into voluntary administration.
Specialty Fashion, the owner of Millers, Katies, Crossroads, Autograph, City Chic and Rivers, says difficult market conditions in July continued over the first quarter.
“The negative impact of the first quarter on trade means that any improvement is unlikely to be sufficient to recover the shortfall in earnings,” the company says.
Specialty Fashion now expects first half underlying EBITDA (earnings before interest, tax, depreciation and amortisation) to be in the range of $14 million to $17 million compared to $30.4 million last year.
“The business is continuing a robust improvement program focused on optimising the store portfolio, accelerated closure of loss making stores and continuation of its cost out program. Concurrently, it has now completed the successful implementation of a new Ecommerce platform to maximise multi-channel migration,” the company says.
The company’s profits have been dragged down since it bought Rivers, the warehouse-style clothing retailer, in 2013.
In 2017, its net loss after tax was $8.4 million. Revenue was down 2.1% to $808.91 million but Rivers returned to profitability,
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