Interest rate rises and financial market volatility have contributed to fashion retailer Noni B’s latest forecast of a net profit for the year of between $6 million and $6.7 million.
The forecast net profit for the 2007-08 year would be a decline from the previous year of $8.3 million.
Noni B said total sales were ahead of financial year 2007 and reports from shopping centres indicated the company’s stores were increasing their share of the current weak apparel market.
“Inventory has been kept under control through more selective buying and additional promotions, which have had an impact on average margin.”
The fashion retailer has previously stated that its first half performance had been affected by the decline in consumer confidence due to interest rate rises and financial market instability.
“It has been widely reported that, since then, consumer confidence and discretionary spending on women’s fashion have continued to weaken,” the company said. “The financial performance of Noni B stores remains in line with financial year 2007.”
Noni B said it had strong operating cash flow, no debt and was well placed to capitalise on an improvement in consumer demand.
“The company continues to invest in further growth, while containing costs, and it plans to open a further seven stores by December 2008, bringing the total to 227.”