HB switch painful

Press, 12 October 1985, Page 23

HB switch painful

PA Dunedin Market repositioning of Hallensteln Brothers, Ltd, has been more painful than expected, the chairman, Mr E. M. Friedlander, says in the annual report “In particular, current rates of interest have meant that our capital expenditure programme has been more costly,” he says. During the year to August 1 the company invested 62 JSM in refurbishing stores. The work is not complete, but expenditure this year will be far less than in the year under review. Mr Friedlander was commenting on the downturn in Hallenstein’s profit, which was down 1.7 per cent at 62.8 M even after realising jIM in property gains. The chairman was not satisfied either with the 9 per cent increase in sales to SS6M. These were affected by the tight rein on the economy, the mild winter and disruption to normal trading by refurbishments, he says. In particular, the Napier and Hamilton branches traded in temporary premises during the first half of the year. Since returning to the rebuilt sites both stores have traded up to budget, though the full benefit has still to be felt.

The annual report says it takes on average three years to complete market repositioning and involves a sacrifice of profit growth during the transition.

The two key factors in the decision to reposition were: the rapid change in consumer spending patterns and the pressure of competition. “Market research showed conclusively that the expectations of today’s consumer society have lifted drastically in the last decade and that it is an accelerating process. The eighties society is more fashion conscious, image conscious and sophisticated in its

life style. It is the ‘me’ society?’ The New Zealand male has discarded his macho-handy-man image. His wardrobe includes not merely his best stilt but also some fashienoMe leisure wear, the report, says. Also, new and powerful competitors were moving into the patch Hallensteln had dominated for so long. . During the year two properties were sold in the Auckland area, along with a site in Manners Street, Wellington. These yielded a profit of f 1,098,000. Over the next three yean the company will participate in further profits from the development of Manners Street Hallensteln owns 32 properties. The newly completed Hamilton building, which cost 64M, had a valuation of 88M in an untenanted state when It was opened a year later. Referring to another subsldl"Z S W?Z’ toe Myß N.Z. Securities and Finance, which was acquired the previous year, is under discussion with major public finance companies “with a view to realising this investment” Deregulation had placed smaller finance companies in difficulties. The report shows that Mr Friedlander has increased his shareholding from 21,000 to 100,000 during the year. The only. shareholder with more than 5 per cent of the capital 13 Hugh Wright, Ltd, with 13.67 per cent