By Patrick Avenell
Clive Peeters has today announced a $1 million operating loss after tax for the first quarter of FY2009. This astounding revelation was made quietly this afternoon, eight days after Current.com.au urged the listed retailer to provide profit guidance to its investors.
In percentage terms, like for like sales for August and September 2008 were down 10 per cent and 14 per cent respectively. The financial year didn’t start so poorly, with July 2008 sales being ahead of budget.
In a notice posted to the ASX, managing director Greg Smith blamed losses on the global economic crisis and low consumer confidence.
“The main contributor appears to be the significant impact on consumer confidence due to the unprecedented events affecting the global and Australian financial sectors, and availability of credit, and emerging concerns about job security, adding to concerns about interest rates, fuel costs and costs of living,” said Smith.
Smith, who had so far resisted to follow the leads of fellow listed retail chains Harvey Norman and JB Hi-Fi in reporting the ASX, concluded that, “the combination of these events has created a climate of fear and uncertainty amongst consumers.”
This view is in stark contrast to JB Hi-Fi’s leadership group, who earlier this week noted the opportunities that had arisen for the retail chain in this current climate. Unlike JB Hi-Fi, however, Clive Peeters does not have a business model suitable for capitalising on these opportunities. As a result, Smith has presided over Clive Peeters during a three month period of nationwide intertia.
“Weaker floor traffic accounted for the sales decline, with sharp falls across all State in August and in September 2008,” he said.
Investors and business partners of Clive Peeters will further be troubled by Smith’s overall prediction for the short-to-medium term: “…the Board believes that retail conditions for at least the remainder of FY 2009 will remain very challenging”.