Record sales from brands Smiggle and Peter Alexander have driven Solomon Lew’s Premier Investments to a record interim profit, offsetting a weaker performance from clothing brands Just Jeans and Dotti.
Premier’s net profit rose 9.4 per cent to $78.6 million in the 26 weeks to January 27, and revenue jumped 6.8 per cent to $634.4 million.
Stationery and accessory brand Smiggle achieved record global sales of $170.7 million during the half year, up 26.7 per cent on a year ago, thanks to the opening of 35 new stores and strong sales growth.
And, sleepwear chain Peter Alexander grew sales 15 per cent to $114.4 million during the half, with strong total and like-for-like sales growth in both Australia and New Zealand.
The two brands were the backbone behind a seven per cent rise in overall retail sales to $630.1 million, the company said, and a 2.4 per cent increase in like-for-like sales.
The strong result prompted the board to increase its interim dividend three cents, from 26 cents to 29 cents, fully franked.
Premier chief executive Mark McInnes said the company plans to invest further in Smiggle and Peter Alexander.
“We identified in 2011 that Smiggle and Peter Alexander were unique brands with personalities driven by in-house design, research and innovation,” Mr McInnes said.
“We set out to invest in these businesses and grow them aggressively.”
Over the past five years, Premier has opened 260 Smiggle and Peter Alexander stores.
But the company has also closed 82 stores over the past six month, including the Just Jeans and Portmans stores in the Bourke Street Mall in Melbourne and eight others as a result of “unrealistic” rent expectations.
The company said it will continue to close unprofitable stores as customers shift to online shopping.
Premier’s other retail brands, including Jays Jays, Just Jeans and Dotti, performed weaker during the half.
The company said Jay Jays delivered positive like-for-like sales, but Just Jeans’ sales were negative and Dotti was disappointing.
Premier, which is Myer’s largest shareholder, made very little mention of the department store chain despite Mr Lew previously being highly critical of the company’s performance and its executives.
The company’s investment segment was flat during the half, reporting revenue and other income of $3.5 million.
Analysts at Citi say Premier’s initial $101 million investment in Myer last March, has depreciated by $63 million in just a year, representing a 40 cents per share drag on the company’s share price.
The embattled department store chain is due to release its half year results on Wednesday.
Shares in Premier gained 6.1 per cent to $15.27 on Friday.