COMMERCIAL Milne’s sales growth did not match cost rises

Press, Volume CXII, Issue 33065, 4 November 1972, Page 18

COMMERCIAL Milne’s sales growth did not match cost rises

(New Zealand Press Association) AUCKLAND, November 3. The vital factor affecting the result of Milne and Choyce, Ltd, Auckland retailer, in the year to July 31 was that the company did not achieve the necessary sales levels, especially in the Queen Street store, to offset higher wages and other costs, says the chairman (Mr R. S. Milne) in the annual report.

Retail sales rose by only 0.96 per cent to sB.6m. Even though the established branch stores showed increases in sales, the average rate of increase was only about half that achieved in previous years. As announced in the preliminary report, the group incurred a loss of $22,326 for the year, after last year’s 41.2 per cent drop in net earnings from the record $238,793 to $140,424. The annual report attributes the group loss to a drop of $250,000 in turnover at the Queen Street store, which traded at a loss, and the partial failure of the Paulis venture.

In June, all but two of the Paulis stores were sold, with a $30,500 loss on the sale of stock contributing to a total loss of $54,000 for the division. The St Lukes and Pakuranga shops were trading at a satisfactory level. Radical style changes and gross over-supply in the men’s clothing industry resulted in a loss by the menswear division of the Maida Vale Clothing Company, Ltd. The womenswear division earned a satisfactory profit but over-all the subsidiary incurred a loss of $76,000.

The Mangere store, which traded for only nine months of the year, failed to reach expected sales levels, and incurred a loss. Group turnover increased by only $11,537 to $10.2m. The position at Maida Vale appeared much more encouraging for the current 12 months. The menswear division had ceased production of shirts and would concentrate on suits, jackets, and trousers, Mr Milne says. The new range had been well received and there are

strong signs that the division was on its way to recovery, he says. As announced, the company will sell its Queen Street store and lease premises in the downtown area being developed by the FletcherMainline partners who have acquired a 24 per cent interest in the company. The loss was incurred after providing $27,088 more for depreciation at $150,482. Payroll tax was up from $41,700 to $43,222. The only dividend paid for the year was the 1| per cent interim, taking $27,000. Last year’s total 7 per cent (cut from 9 per cent) took $126,000. Shareholders’ funds were down by $34,357 to $2,786,062.

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