HLG - Hallenstein Glasson

[Beagle]

I tell him that

I asked him why he chose HLG and his other stocks. Answer 'thats what the guys down the bowling club are doing'I feel there is a lot of ignorance out there and as the oldies move from bank deposits to shares there will much sadness in a year or two when interest rates start rising and share prices (many currently being valued as a bond) start falling

The ol safety in numbers thing eh...

[Not too Flash]

Looks like everyone buying in for the dividend

[macduffy]

FWIW Chris Lee had a fair bit to say about older investors having to take on board some risk to maintain their income level's in his most recent newsletter and a good mention of REIT's.


I guess he's got to sell something. A few years ago it was finance company debentures!

;)

[BeeBop]

Well I didn't buy....couldn't make the risk/return work on my parcel and I need to believe in the stock long-term. I had wanted to by HLG some time ago when they were around 3.30 but the numbers didn't add up at all - As an absolute basic for me, the div was more than the eps. So this gave me no long term comfort. Sold a few shares this past week that have had great runs and am now in to an adjusted set. Will be missing a few divs. But good enough return is a good enough return for me! Now I just need my PGW to do its thing!!!!! Bah humbug

[winner69]

Well I didn't buy....couldn't make the risk/return work on my parcel and I need to believe in the stock long-term. I had wanted to by HLG some time ago when they were around 3.30 but the numbers didn't add up at all - As an absolute basic for me, the div was more than the eps. So this gave me no long term comfort. Sold a few shares this past week that have had great runs and am now in to an adjusted set. Will be missing a few divs. But good enough return is a good enough return for me! Now I just need my PGW to do its thing!!!!! Bah humbug

I reckon you be better off with HLG than PGW

Hope with PGW is not a good strategy

[BeeBop]

I reckon you be better off with HLG than PGW

Hope with PGW is not a good strategy

agree....problem is I bought PGW a long time ago...have nearly neutralised with divs but not ready to sell that holding yet...will give it a bit more time as farming will come back in favour....if no performance after a while then I will move out of it but only after I have put some brain work into the move. Just bought some HBY.

[BeeBop]

Sad thing is, I spent a long time mulling over PGW at the time and I liked what I read then - had been in an out over the years.

[winner69]

Looks like everyone buying in for the dividend

Heading to 310 when you posted this

If they were buying for the dividend bit of time for a recovery

The guys down the bowling club got their dividends and decided to cut their losses and sold out of HLG. Almost en masse they have bought into AIR as they heard it was paying huge dividends.

[macduffy]

Heading to 310 when you posted this

If they were buying for the dividend bit of time for a recovery

The guys down the bowling club got their dividends and decided to cut their losses and sold out of HLG. Almost en masse they have bought into AIR as they heard it was paying huge dividends.

Who's spreading all these rumours at the bowling club, winner?

;)

[winner69]

Who's spreading all these rumours at the bowling club, winner?

;)

I don't play bowls

[winner69]

From Retail Watch - card transactions

For March Clothing & Footwear category down 2.4% on March last year (total overall spend up 3.1%)

Rag trade struggling a bit?

[winner69]

What punters thoughts on the return of Di?

Hope her luck has changed from patch days

Marked Price Sensitive so must be good news

[Beagle]

What punters thoughts on the return of Di?

Hope her luck has changed from patch days

Marked Price Sensitive so must be good news

LOL I like your dry sense of humour mate.
http://www.nbr.co.nz/article/prodigal-daughter-returns-glassons-cs-187524

Her results at PPL are hardly what anyone would call "stellar" are they ! The chain could hardly be trading worse could it !

Suppose all the trendy women are listening to Hillary Barry and buying online. Blame Paul Henry's new Breakfast chat show for that eh, they seem to make a good team.

[winner69]

From that article - Analysts put the continued poor results at Glassons partly down to this high management churn.

Does the return of the prodigal daughter count as churn?

Returns policy at Hallensteins obviously quite generous (though retailers don't usually take back used goods unless they obviously broken)

[winner69]

Di - the $6m wonder woman

Immediate response to the announcement

[percy]

Di - the $6m wonder woman

Immediate response to the announcement

Yes very good news for HLG shareholders.

[GR8DAY]

....Mrs. Market likes it. I guess they wouldnt have got her back unless she had a positive history there already.......if she can turn Glassons around that should impact the bottom line many percentage points. All they need now is for the $NZ to continue strengthening and all might be rosy.

[macduffy]

....Mrs. Market likes it. I guess they wouldnt have got her back unless she had a positive history there already.......if she can turn Glassons around that should impact the bottom line many percentage points. All they need now is for the $NZ to continue strengthening and all might be rosy.

In that case they'd be the odd one out. All other importing retailers have warned recently that the stronger NZD is creating head winds for them.

;)

Please disregard the above nonsense. They were bemoaning the WEAKER NZD!

:blush::blush:

[Beagle]

From that article - Analysts put the continued poor results at Glassons partly down to this high management churn.

Does the return of the prodigal daughter count as churn?

Returns policy at Hallensteins obviously quite generous (though retailers don't usually take back used goods unless they obviously broken)

Also from that article...So she reckons she's learned lessons from her time away from HLG...one presumes at PPL. What lessons are those one wonders considering PPL is on its knees trading at the behest and pleasure of the bank after her tenure there. I hope she proves me wrong but I am cautious.

$Kiwi is slightly above the 20 year average so called Goldilocks level. Retailers better get fit and get used to this new normal IMO.

[winner69]

Yes NZD slightly ab0ve average at 67 US

Problem being that its +/- average for only 15% of the time as it cycles from high to lows

Pundits say it will go lower ....hmmm

[Beagle]

Yeap, I've put the saddle away, not looking for another ride around the paddock anymore.

[winner69]

Graeme said this in March 'The record temperatures in both New Zealand and Australia have not been conducive to early autumn sales'

Still seems very warm for autumn coming on winter

Wonder how sales are going?

One thing though - if the huge overstocks were summer gear they have had longer to quit it. That's good

On the other hand if it's winter gear might be a big problem if we don't have a winter this year

[percy]

Graeme said this in March 'The record temperatures in both New Zealand and Australia have not been conducive to early autumn sales'

Still seems very warm for autumn coming on winter

Wonder how sales are going?

One thing though - if the huge overstocks were summer gear they have had longer to quit it. That's good

On the other hand if it's winter gear might be a big problem if we don't have a winter this year

Clothing retailers' enjoy bigger profits on winter clothing,than on summer clothing.
They do not sell winter clothing in warm weather.

[winner69]

Wonder what the weighting of Hallensteins / Glassons trans-seasonal stock is?

[winner69]

Whose the first going to be to have to have a winter clearance sale before winter begins is whats being asked

http://www.smh.com.au/business/retail/fashion-a-victim-of-the-endless-summer-20160504-gommlw.html

Probably a further drag on Glassons Aussie already pretty mediocre performance

[percy]

Logistics of clothing retailing is you must clear stock for incoming stock.
Unless we get a very cold snap soon, I would think clothing retailers "appear to have a problem".
A very big one.!
A year of "the clearance sale."
That means a year of dismal earnings.

[IAK]

Logistics of clothing retailing is you must clear stock for incoming stock.
Unless we get a very cold snap soon, I would think clothing retailers "appear to have a problem".
A very big one.!
A year of "the clearance sale."
That means a year of dismal earnings.

Ditto Kathmandu.

[crighton100]

The cold snap came just at the right time [& it certainly is cold],I think you will find these clothing companies will do very well in the next few months.You watch the educated buyers come in & the shares go up.The other thing to remember is the kiwi dollar has had a bit of a lift lately which will also help their cause for the coming season [you really dont have to be a rocket scientist to work these things out].

[janner]

The cold snap came just at the right time [& it certainly is cold],I think you will find these clothing companies will do very well in the next few months.You watch the educated buyers come in & the shares go up.The other thing to remember is the kiwi dollar has had a bit of a lift lately which will also help their cause for the coming season [you really dont have to be a rocket scientist to work these things out].

Kiwi's are not paid like rocket scientists.. Therefore unable to rush out and buy when ever they want or need to.

Unless of course it is on the " Never Never ".

[winner69]

You would think that if Kathmandu are creaming it at the moment then HLG should be as well.

Share price pretty low at the moment, struggling to rise above multi year lows

[nextbigthing]

You would think that if Kathmandu are creaming it at the moment then HLG should be as well.

Share price pretty low at the moment, struggling to rise above multi year lows

Sounds like a buy Winner?

[see weed]

Topped up on yesterdays close at 2.65. Couldn't resist the 30c div and 11%+ yield:).

[James108]

Topped up on yesterdays close at 2.65. Couldn't resist the 30c div and 11%+ yield:).


30c div? I don't think so in the next year at least.

[see weed]

30c div? I don't think so in the next year at least.
Would be happy at anything over 20c, which = four times bank interest.

[winner69]

Retail on a roll in NZ. Stats Electronic Card Spend figures for June exceeded even the most optimistic forecast.

Westpac say -


Spending on retail cards surged in June, with a 1.2% gain over the month. While we had expected some bounce following last month’s Easter-related weakness, the gain seen in June was well above even the most optimistic market forecast.

Gains in spending were widespread in June. There were particularly large increases in spending on durables (likely related to the continuing strength of the housing market) and apparel, possibly assisted by the recent turn in the weather. The strong tourism season also appears be boosting spending with a solid increase in spending on hospitality.


HLG will be doing more than OK - profit upgrade coming

[GR8DAY]

.......gotta be happy chappy's at HLG right now. What with the cold damp miserable weather which should see the woolly winters flying off shelves AND the high KIWI$.........they must be printing money right now surely. BIG divi cant be too far off either? HOLDER

[Arbroath]

Retail on a roll in NZ. Stats Electronic Card Spend figures for June exceeded even the most optimistic forecast.

Westpac say -


Spending on retail cards surged in June, with a 1.2% gain over the month. While we had expected some bounce following last month’s Easter-related weakness, the gain seen in June was well above even the most optimistic market forecast.

Gains in spending were widespread in June. There were particularly large increases in spending on durables (likely related to the continuing strength of the housing market) and apparel, possibly assisted by the recent turn in the weather. The strong tourism season also appears be boosting spending with a solid increase in spending on hospitality.


HLG will be doing more than OK - profit upgrade coming

Winner,

I've rejigged my numbers for the full year and have the following (could have egg all over my face as we could see a Trading update any day). I'm banking on expenses falling about $3m from H1 to H2 like they did in 2015 to partially compensate lower gross margin from lower NZDUSD which knocks GP by about $4-5m.

FY Implied 2H
Sales: $225m $112.6m
GM: 56.2% 55.6%
Expense: $107m $52.1m
NPAT: $14-14.5m $7.2-7.7m

[winner69]

Winner,

I've rejigged my numbers for the full year and have the following (could have egg all over my face as we could see a Trading update any day). I'm banking on expenses falling about $3m from H1 to H2 like they did in 2015 to partially compensate lower gross margin from lower NZDUSD which knocks GP by about $4-5m.

FY Implied 2H
Sales: $225m $112.6m
GM: 56.2% 55.6%
Expense: $107m $52.1m
NPAT: $14-14.5m $7.2-7.7m

A tad lower than last years $17.4m

Everybody expecting a ****ty result so your $14.5m would be a stunning result and all will be honky dory again and the share price will rocket over $3 again ...and more

Seeing retailers appear to doing very well at the moment with the economy on fire and all that one would hope that they don't report something like $13m npat - that indeed would be bad

[winner69]

Maybe not $2.50 but how about $2.75 then



You guys laughed at me i posted that last October

plenty o be had sub 275 wasn't there

[Beagle]

Hard to figure with other retailers doing well why Mr Consistent in the apparel trade has a blot on their almost impeccable track record ?

A one off and management working hard to restore lustre or systematic of something of an evolving trend affect the middle price segment of the rag trade ? Dividend hounds will be hoping its the former and regular XXL sized feeds will resume soon.

Hard to read the tea leaves on this one. This hound loves a good divvy feed but cautious on this one. as I get the sense the amount of dog food coming might be trimmed back a bit for a while / perhaps more than a little while ?

[Arbroath]

You guys laughed at me i posted that last October

plenty o be had sub 275 wasn't there

Not me. I recall saying to you that if they came in below $13m (the break even line on our pint bet) that they'd see $2.50. As its turned out nearly got there anyway on poor sentiment.

This is result is hard to pick. No market updates would imply something in the $13-15m range so anything outside that they should really be updating the market imho.

[JayRiggs]

Went to Hallenteins recently to shop for some t-shirts on special.
Wasn't very impressed by their $10-$15 range, because they went down too long past the waist. Same thing with their long sleeve tees, but they went down even longer.
I went to the Warehouse and bought some $5 t-shirts instead.

[see weed]

Glasson opening new shop in Sylvia Park?, noticed the other day as walking past all those flashy shops. Big posters of Glasson Models covering all the construction protective barrier walls while the renovation is going on.

[Beagle]

Glasson opening new shop in Sylvia Park?, noticed the other day as walking past all those flashy shops. Big posters of Glasson Models covering all the construction protective barrier walls while the renovation is going on.

Now come on mate...you know its no good for a slightly older gentleman's blood pressure looking at those pretty models :D

[GR8DAY]

Went to Hallenteins recently to shop for some t-shirts on special.
Wasn't very impressed by their $10-$15 range, because they went down too long past the waist. Same thing with their long sleeve tees, but they went down even longer.
I went to the Warehouse and bought some $5 t-shirts instead.

.......perhaps your'e just vertically challenged in the leg department JR?? Anyway you'll be taking those Wharehouse T's back for a refund shortly as they fall apart then back into HLGs for some real quality!!

[Joshuatree]

Disagree there. The hallensteins shirts are so thin now they look tatty after a few washes (just like elsewhere). The long tshirts are the BLVD Kings brand ,style, some with 15cm zips on each side; great if you want to look like a 61 year old gangsta:). I buy their tshirts because some of the designs on the panel tshirts(printed/patterned all over not just a small block print on the front )are really creative and cool. In fact if anyone has the Park brand with the Tide design on it and want to sell please pm me. I emailed the company asking for 10 but they'd discontinued it after two successful years.

[tim23]

I buy all my work business shirts, suits and trousers from hlg and they are great quality, smart looking plus great value superior to whs in my opinion

[Arbroath]

A tad lower than last years $17.4m

Everybody expecting a ****ty result so your $14.5m would be a stunning result and all will be honky dory again and the share price will rocket over $3 again ...and more

Seeing retailers appear to doing very well at the moment with the economy on fire and all that one would hope that they don't report something like $13m npat - that indeed would be bad


Pre-release looks OK overall:

Sales: $223.5m, GM: 56.5% NPAT: $13.5m

Dividend to be maintained at historic levels suggests a final of 16.5cps which means a payout of 30cps for the year v eps of only 23cps. Clearly management are confident of cash flows remaining strong & stronger than npat/eps. Also state unfavourable FX hedges have been used and future FX is at better rates and Glassons doing better since Di came back. Reads a bit like a FY17 upgrade of sorts although far too early to make predictions about FY17.

[sb9]

Following sentence taken from their trading update, had to laugh at the highlighted bit doesn't two negatives make a positive?? Just an observation nothing cynical...

"Net profit after tax is projected at approximately $13.5 million, a decrease of -22% on the
prior year ($17.386 million.)"

[winner69]

Pre-release looks OK overall:

Sales: $223.5m, GM: 56.5% NPAT: $13.5m

Dividend to be maintained at historic levels suggests a final of 16.5cps which means a payout of 30cps for the year v eps of only 23cps. Clearly management are confident of cash flows remaining strong & stronger than npat/eps. Also state unfavourable FX hedges have been used and future FX is at better rates and Glassons doing better since Di came back. Reads a bit like a FY17 upgrade of sorts although far too early to make predictions about FY17.

The dividend is often more than free cash floe - obviously see consistency as important even if runs down cash reserves a bit

The $13.5m a bit lower than your estimate of the $14.0m-$14.5 a week or so ago - but as long as you are happy that's OK

Long time ago my forecast was $13.3m (with a $10m worst case) so I reckon I pretty clever. Somebody has to say so - nobody else does

[BIRMANBOY]

W69 ...clever doesn't even start to describe your contribution...the reason why people don't say it more often is its the new "normal" for you.:p
The dividend is often more than free cash floe - obviously see consistency as important even if runs down cash reserves a bit

The $13.5m a bit lower than your estimate of the $14.0m-$14.5 a week or so ago - but as long as you are happy that's OK

Long time ago my forecast was $13.3m (with a $10m worst case) so I reckon I pretty clever. Somebody has to say so - nobody else does

[Arbroath]

The dividend is often more than free cash floe - obviously see consistency as important even if runs down cash reserves a bit

The $13.5m a bit lower than your estimate of the $14.0m-$14.5 a week or so ago - but as long as you are happy that's OK

Long time ago my forecast was $13.3m (with a $10m worst case) so I reckon I pretty clever. Somebody has to say so - nobody else does


Haha. Well winner you are so clever you'll remember that you owe me a pint as I went $13m or above and you took unders.

[winner69]

Haha. Well winner you are so clever you'll remember that you owe me a pint as I went $13m or above and you took unders.

Might be a recount - wait until official result is posted and we'll sort that pint out

[winner69]

Updated an old chart

The market over the years has been very consistent at how it has 'valued' HLG hasn't it

If you believe next years NPAT will recover to 2015 levels (+30% odd) then todays price is a SCREAMING BUY

One for the value hunters or dividend hounds maybe?

[Beagle]

Updated an old chart

The market over the years has been very consistent at how it has 'valued' HLG hasn't it

If you believe next years NPAT will recover to 2015 levels (+30% odd) then todays price is a SCREAMING BUY

One for the value hunters or dividend hounds maybe?

The three factors they mentioned as impacting this year's results have all be fixed or ameliorated. Exchange rate was around John Key's goldilocks 65 cents for quite some time there and that's obviously changed materially and the start of winter was the warmest I can ever recall and oh my goodness how that's changed !! Looks like Glasson's its getting is product offer sorted too.

With other clothing retailers like Kathmandu doing well this year's result is increasingly looking like the bottom of the cycle.

Good that the top line has been maintained which gives me confidence they can bounce back from here. Signalling final dividend will be at historical level's has this hound assessing the future deliveries to his food bowl.

Last year we had 16.5 cps final and 13.5 cps interim, total 30 cps fully imputed so at $2.70 that's a net dividend yield of 11.11% or a gross yield of 15.4%.

This reporting season is ALL ABOUT THE OUTLOOK and this is a prime example in my opinion. Outlook materially better than the expected result. How many other companies pay you a consistent 15% divvy to wait for improved results ?

There's definitely seriously good value here for dividend hounds !!

[Beagle]

Got to thinking, (over a good steak and cheese pie for lunch) a 6 cent rise in the Kiwi from 65 to 71 U.S. (9% increase) is going to do wonders just in itself in regard to their circa 3% reduction in gross profit margin.
At the very least this in itself should easily restore gross profit margins to previous level's, if not considerably improve them from historical norms and then with things starting to pump at Glassons if we had half normal weather next year, gosh, we could easily see this back to $3.50 plus.

[winner69]

Got to thinking, (over a good steak and cheese pie for lunch) a 6 cent rise in the Kiwi from 65 to 71 U.S. (9% increase) is going to do wonders just in itself in regard to their circa 3% reduction in gross profit margin.
At the very least this in itself should easily restore gross profit margins to previous level's, if not considerably improve them from historical norms and then with things starting to pump at Glassons if we had half normal weather next year, gosh, we could easily see this back to $3.50 plus.

The stars are all aligning nicely aren't they

Jeez - $3.60 is about a 30% gain and add in dividends that's pretty good

As per last night's post - A SCREAMING BUY

[Beagle]

The stars are all aligning nicely aren't they

Jeez - $3.60 is about a 30% gain and add in dividends that's pretty good

As per last night's post - A SCREAMING BUY

45%+ total shareholder return over the next year would not surprise me in the slightest. Nice clean and tidy balance sheet and they're good operators who slipped once and the market has punished them too harshly.

I can easily see $20m plus next year just on the currency shift alone ! GENUINE VALUE HERE !! Its ready to take off !!
http://movieneon.com/titles/1987/wall-street/characters/hooker/

[winner69]

Got to thinking, (over a good steak and cheese pie for lunch) a 6 cent rise in the Kiwi from 65 to 71 U.S. (9% increase) is going to do wonders just in itself in regard to their circa 3% reduction in gross profit margin.
At the very least this in itself should easily restore gross profit margins to previous level's, if not considerably improve them from historical norms and then with things starting to pump at Glassons if we had half normal weather next year, gosh, we could easily see this back to $3.50 plus.



You mention xrate of us 71 cents - its 72 cents today but wheeler is going to stuff the nz economy tomorrow so lets assume 70 cents for the full year

Never mind - the key thing is that margins are likely to be higher in F17. Even if only 2% points higher thats more than $4m extra profit which would take npat back to F15 levels

As you mention other things, like Glassons, have improved and we should see a decent sales boost as well - a couple more million eh

Yes $3.50 share price sometime soon is on the cards

It started that run today eh - positive momentum is good, long may it continue

[nextbigthing]

Yes $3.50 share price sometime soon is on the cards


Not by Christmas by any chance is it Winner? Gee with HLG going to $3.50, HBL up to $1.60 and SCL headed to $5 (all by Christmas), isn't it a great time to be alive.

Anyway, Roger, back to your turn to push this thing up the ramp.

[Beagle]

You mention xrate of us 71 cents - its 72 cents today but wheeler is going to stuff the nz economy tomorrow so lets assume 70 cents for the full year

Never mind - the key thing is that margins are likely to be higher in F17. Even if only 2% points higher thats more than $4m extra profit which would take npat back to F15 levels

As you mention other things, like Glassons, have improved and we should see a decent sales boost as well - a couple more million eh

Yes $3.50 share price sometime soon is on the cards

It started that run today eh - positive momentum is good, long may it continue

Okay I won't disappoint you NBT. Here's the thing, for the vast majority of FY16 the exchange rate was 65 cents..even if we assume an average of 70 cents this year, (closed at 72 as you quite rightly said W69) that's a fairly conservative 8% reduction in the cost of purchases so I see their profits exceeding FY15 on the exchange rate alone. Then add in Di Humperies reinvigorating the fashion pizazz into the product line at Glassons and with half normal weather we're off to the races with $20m+ profit in FY17.

Here's what they said this year - Sales up circa $2m to $ 223.5m They mentioned gross profit dropped ~3% to 56.5% so:-
Purchases must have been $97.21m Kiwi, (assume for a minute stock level was consistent and average exchange rate of 65 cents U.S.) Purchases in U.S$63.18m
Gross profit $126.3m = 56.5% - gives $13,5m net profit

Now if we assume an average of U.S. 70 cents this year (which currently looks conservative) those purchases would have cost them $U.S.63.18m / 0.7 = $90.25m Kiwi a reduction of just on $7m so GROSS PROFIT WOULD BE SEVEN MILLION DOLLARS MORE AT US 70 CENTS AND WE ARE CURRENTLY AT 72 CENTS !!

That's $13.5m net profit plus the extra $7m gross profit which flows straight to the bottom line so that's $20.5m for FY17 just based on the currency increase !, assuming all other costs remain the same, but the word seems to be they've been trying to pull costs out of their structure to cope with the lower currency so one would hope we get the full year's benefit of those efficiency gains this year in addition to the above favourable impact from the currency. Then factor in Di Humphries well known positive influence and if the weather starts to be half normal...well we could easily see $4 again this time next year and profit somewhere well north of $20m.

This is too easy mate, for anyone that knows where the dollar has been and its effects on importers and then the subsequent effect when it goes back up (AFTER the company has been vigorously pulling other costs out of its cost structure to cope with the lower dollar)...for anyone with some vision of what's going to happen its clear profitability is highly likely to AT LEAST be restored to FY15 level's if not considerably beyond. This could easily do a Kathmandu style recovery and grow profits by 67% next year to $22.5m !!

On top of that the 15% gross dividend yield which the company has confirmed makes this arguably the most compelling dividend yielding stock on the NZX with a very long and stable track record of paying exceptionally stable and exceptionally high level's of dividends.

[see weed]

Okay I won't disappoint you NBT. Here's the thing, for the vast majority of FY16 the exchange rate was 65 cents..even if we assume an average of 70 cents this year, (closed at 72 as you quite rightly said W69) that's a fairly conservative 8% reduction in the cost of purchases so I see their profits exceeding FY15 on the exchange rate alone. Then add in Di Humperies reinvigorating the fashion pizazz into the product line at Glassons and with half normal weather we're off to the races with $20m+ profit in FY17.

Here's what they said this year - Sales up circa $2m to $ 223.5m They mentioned gross profit dropped ~3% to 56.5% so:-
Purchases must have been $97.21m, (assume for a minute stock level was consistent and average exchange rate of 65 cents U.S.) Purchases in U.S$63.18m
Gross profit $126.3m = 56.5%

Now if we assume an average of U.S. 70 cents this year (which currently looks conservative) those purchases would have cost them 63.18m / 0.7 = $90.25m a reduction of just on $7m so GROSS PROFIT WOULD BE SEVEN MILLION DOLLARS MORE AT US 70 CENTS AND WE ARE CURRENTLY AT 72 CENTS !!

That's $13.5m plus $7m or $20.5m for FY17 just based on the currency increase ! Then factor in Di Humphries well known influence and if the weather starts to be half normal...well we could easily see $4 again this time next year and profit somewhere well north of even $20m.

This is too easy mate, for anyone that knows where the dollar has been and its effects on importers and then the subsequent effect when it goes back up (AFTER the company has been vigorously pulling other costs out of its cost structure to cope with the lower dollar)...for anyone with some vision of what's going to happen its clear profitability is highly likely to AT LEAST be restored to FY15 level's if not considerably beyond.

Disc - Bought several parcels today...low hanging fruit doesn't just grow on apple trees.
Likewise, got 5 parcels at 2.69, 2.67, 2.65, 2.64 and 2.61 in last 7 weeks:). Was hoping to keep it quiet until we got AIR out of the way.

[Beagle]

Likewise, got 5 parcels at 2.69, 2.67, 2.65, 2.64 and 2.61 in last 7 weeks:). Was hoping to keep it quiet until we got AIR out of the way.

You're at least as cunning as any other bloodhound mate.

This will be great for even better margins going forward. http://www.msn.com/en-nz/money/news/kiwi-jumps-a-cent-as-ocr-cut/ar-BBvujZL?li=BBv6TfA&ocid=spartandhp

[James108]

I think short term margins will obviously benefit from a stronger NZ dollar but long term HLG margins will continue to be compressed due to formidable foreign competition entering the market (i.e. Zara, Topman etc.). Just FYI my female friends aged ~25 all rave about Zara and can't wait for more shops to open in NZ.

Despite that I currently hold, seems pretty good value at current levels.

[see weed]

I think short term margins will obviously benefit from a stronger NZ dollar but long term HLG margins will continue to be compressed due to formidable foreign competition entering the market (i.e. Zara, Topman etc.). Just FYI my female friends aged ~25 all rave about Zara and can't wait for more shops to open in NZ.

Despite that I currently hold, seems pretty good value at current levels.
Do you think HLG could buy shares in Zara, Topman etc? then it wouldn't matter. If you can't beat them.....join them.

[h2so4]

Probably buy their own shares.

[winner69]

Okay I won't disappoint you NBT. Here's the thing, for the vast majority of FY16 the exchange rate was 65 cents..even if we assume an average of 70 cents this year, (closed at 72 as you quite rightly said W69) that's a fairly conservative 8% reduction in the cost of purchases so I see their profits exceeding FY15 on the exchange rate alone. Then add in Di Humperies reinvigorating the fashion pizazz into the product line at Glassons and with half normal weather we're off to the races with $20m+ profit in FY17.

Here's what they said this year - Sales up circa $2m to $ 223.5m They mentioned gross profit dropped ~3% to 56.5% so:-
Purchases must have been $97.21m Kiwi, (assume for a minute stock level was consistent and average exchange rate of 65 cents U.S.) Purchases in U.S$63.18m
Gross profit $126.3m = 56.5% - gives $13,5m net profit

Now if we assume an average of U.S. 70 cents this year (which currently looks conservative) those purchases would have cost them $U.S.63.18m / 0.7 = $90.25m Kiwi a reduction of just on $7m so GROSS PROFIT WOULD BE SEVEN MILLION DOLLARS MORE AT US 70 CENTS AND WE ARE CURRENTLY AT 72 CENTS !!

That's $13.5m net profit plus the extra $7m gross profit which flows straight to the bottom line so that's $20.5m for FY17 just based on the currency increase !, assuming all other costs remain the same, but the word seems to be they've been trying to pull costs out of their structure to cope with the lower currency so one would hope we get the full year's benefit of those efficiency gains this year in addition to the above favourable impact from the currency. Then factor in Di Humphries well known positive influence and if the weather starts to be half normal...well we could easily see $4 again this time next year and profit somewhere well north of $20m.

This is too easy mate, for anyone that knows where the dollar has been and its effects on importers and then the subsequent effect when it goes back up (AFTER the company has been vigorously pulling other costs out of its cost structure to cope with the lower dollar)...for anyone with some vision of what's going to happen its clear profitability is highly likely to AT LEAST be restored to FY15 level's if not considerably beyond. This could easily do a Kathmandu style recovery and grow profits by 67% next year to $22.5m !!

On top of that the 15% gross dividend yield which the company has confirmed makes this arguably the most compelling dividend yielding stock on the NZX with a very long and stable track record of paying exceptionally stable and exceptionally high level's of dividends.

Jeez $22.5m for F17 - awesome

With the nzd on fire your forecast could be seen as even more likely - maybe even $25m

Last time they were making anything like this sort of money the share price was closing in on $6 ...yes $6. As bull keeps telling us lower interest rates mean pe expansion so goodness knows where the price is heading

Whatever today's price is cheap ....and comforting to know that getting over $5 is not a new experience - its been there before

[Snow Leopard]

...That's $13.5m net profit plus the extra $7m gross profit which flows straight to the bottom line so that's $20.5m...

https://cobornsdelivers.files.wordpress.com/2010/02/apples-and-oranges.jpg

Best Wishes
Paper Tiger

Disc: Regard HLG as a sensible investment.

[Raz]

I think short term margins will obviously benefit from a stronger NZ dollar but long term HLG margins will continue to be compressed due to formidable foreign competition entering the market (i.e. Zara, Topman etc.). Just FYI my female friends aged ~25 all rave about Zara and can't wait for more shops to open in NZ.

Despite that I currently hold, seems pretty good value at current levels.

Add H & H to that list. Well isn't the point that they rav about them as as they purchased when overseas..I have not purchased clothes in NZ for at least five years...an't that a problem?

[Beagle]

Add H & H to that list. Well isn't the point that they rav about them as as they purchased when overseas..I have not purchased clothes in NZ for at least five years...an't that a problem?

Not at all Raz. Wouldn't expect an international business class jetsetter who drives high end Euro cars to shop here and especially not at HLG but against all this new competition others have referred to above HLG is still growing its annual sales and with the dollar on fire significant margin and resulting profit expansion looks like a given. I guess that's what being right at a nice mid price point with an extremely well recognised and trusted brand in the apparel trade does for you ! Mr and Mrs Joe Average happy to go to their local HLG store and find nice clothes to try on that they can easily afford.

Crikey Winner, even I didn't know they'd hit $6 before !!! Better buy some more :t_up:

[GR8DAY]

[QUOTE=nextbigthing;631775]Not by Christmas by any chance is it Winner? Gee with HLG going to $3.50, HBL up to $1.60 and SCL headed to $5 (all by Christmas), isn't it a great time to be alive.

Anyway, Roger, back to your turn to push this thing up the [I]ramp.

........HAHA, nicely put NBT.

[James108]

HLG may be growing annual sales but far below national clothing footwear and accesory spending. HLG are losing market share and it is having an impact on margins as they discount to try to retain market share.

Any short term gain from the NZD aside I see the business as stagnant or declining.

[winner69]

Not at all Raz. Wouldn't expect an international business class jetsetter who drives high end Euro cars to shop here and especially not at HLG but against all this new competition others have referred to above HLG is still growing its annual sales and with the dollar on fire significant margin and resulting profit expansion looks like a given. I guess that's what being right at a nice mid price point with an extremely well recognised and trusted brand in the apparel trade does for you ! Mr and Mrs Joe Average happy to go to their local HLG store and find nice clothes to try on that they can easily afford.

Crikey Winner, even I didn't know they'd hit $6 before !!! Better buy some more :t_up:

Didn't hit $6 ..... I said closing in on $6

Looks like $5.85 was the high - in 2013 so not long ago

[winner69]

Didn't hit $6 ..... I said closing in on $6

Looks like $5.85 was the high - in 2013 so not long ago

..... and that was after they made $21m npat in 2012

[Raz]

HLG may be growing annual sales but far below national clothing footwear and accesory spending. HLG are losing market share and it is having an impact on margins as they discount to try to retain market share.

Any short term gain from the NZD aside I see the business as stagnant or declining.

Well said, I have ceased being a customer a while back and the brand is overlooked by the young who spend, ramp up guys as I overlooked selling this a while back and may look at timing an offload, some here must be in a hole from last year on this one me thinks:)

[Biscuit]

I overlooked selling this a while back and may look at timing an offload....

Also agree. Sold down a couple of years ago but still holding some as it has a good track and dividends. There is little here to support a long term hold, but I think there will be better selling opportunities ahead.

[Beagle]

http://hallensteinglasson.co.nz/online-annual-report/section?rsid=40df1da8-4ec5-4ac2-8d32-b13056f0b556

Consistent record of very high divvy's. 2015 was 30 cps IIRC and we're on track for a repeat this year. With the expansion in margin with the higher Kiwi I'm forecasting a return to 33.5 cps fully imputed for FY17 which at $2.80 gives a gross dividend yield 33.5 / 0.72 = 46.528 / 280 = 16.62% !! Beagles are glutinous by nature. "There's little here to support a long term hold" Hmmm, I suspect many a dividend hound would disagree with that. Must be the highest dividend yielding stock on the NZX surely !

[Biscuit]

Beagles are glutinous by nature. "There's little here to support a long term hold" Hmmm, I suspect many a dividend hound would disagree with that. Must be the highest dividend yielding stock on the NZX surely !

"Glutinous" = sticky like glue. Do you mean you are looking for a long-term hold? I've held HLG for a long time for the dividend. Profitability may come and go with the exchange rates to some extent but long term it needs to be relevant and competitive in the market.

[Beagle]

gluttonous my bad on the spelling. Means like to drink and eat excessively, greedy for large divvy feeds.

[Biscuit]

gluttonous my bad on the spelling. Means like to drink and eat excessively, greedy for large divvy feeds.

Well, gluttony can lead to glutting which can leave you feeling glutinous, so I know what you mean. Whe I go on to the HLG link, I only get financials up to 2014?

[James108]

I think there is long term value in HLG at current prices but I question those heralding a return to $5/share, it may happen but I would have sold out long before then.

[Arbroath]

I think there is long term value in HLG at current prices but I question those heralding a return to $5/share, it may happen but I would have sold out long before then.

I agree. I hold at an average of $3.02 and think the stock is worth around $4.00 but talk of $5-6 is pie in the sky to me. Too many variables that can go wrong like the NZD, rising rents and more competitors etc for this to justify $5+ like it did a few years ago. But 30c dividends should attract the punters back as long as H1 2017 comes in above $8m npat and provide those holding now with a decision whether to hold or not above $3.50.

[Beagle]

Value doesn't kick you in the head and force you to buy, it whispers quietly to you there's money to be made here. In post #561 I outlined the potential for FY17 just based on the exchange rate difference and how is we assumed nothing else changed (i.e. we still had really weird unseasonal weather, Di Humphries appointment made no difference and the effect of the full years costs they've been pulling out of the business in Fy16, (see commentary in 2016 interim report) for some strange reason didn't happen in FY17. Just the exchange rate only gives $20.5m next year up from forecast $13.5m this year.

Just this factor alone gets us back to the good days of FY15 but of course there's more to this story of potential.

There's the future effects of their cost reduction programme and a full year of those benefits to flow through in FY17, (part year FY16) and there's Di Humphries positive influence on the more attractive fashion offer at Glassons which the company has eluded too. Whether we get bizarre and unusual weather patterns like the warmest start to winter I can ever remember going forward from here is frankly anyone's guess but I think its fair to say they don't face that sort of challenge every year

The dividend yield is compelling and there's plenty of potential for profit growth from a low of FY16.

[Ghost Monkey]

Geez, this has been quite the sales pitch over the last couple days. Gotta admire your enthusiasm if nothing else.

[Biscuit]

Geez, this has been quite the sales pitch over the last couple days. Gotta admire your enthusiasm if nothing else.

Well, my bet is that its got upside from here over the next 6 months or so if the exchange rate stays on track

[winner69]

Geez, this has been quite the sales pitch over the last couple days. Gotta admire your enthusiasm if nothing else.

We'll check back again next year eh

Roger will be happy when share price over $4 ......and no doubt a few others as well

[winner69]

Latest Retail Sales data from Stats NZ showed clothing,footwear etc ingustry sales for the June quarter were up 7% on last year

That covers the start of the HLG year so even if they aren't growing share (James comment) sales growth is happening. ....at least in NZ

And if Di has got things humming - well 10% growth could be happening

Economy on fire (~4% gdp) and consumers spending heaps - even on clothes

Looking good for likes of HLG (and KMD - pity Postie Plus went bust)

I

[Biscuit]

- pity Postie Plus went bust

No, that's a good thing - less competition!

[percy]

Postie Plus lives.
New owners.
New lower everyday prices.
The menswear retailer that surprises me is The Farmers.I think they are gaining market share.

[winner69]

Postie Plus lives.
New owners.
New lower everyday prices.
The menswear retailer that surprises me is The Farmers.I think they are gaining market share.

So they do - thanks for pointing that out

Probably doing OK as well

[Raz]

Postie Plus lives.
New owners.
New lower everyday prices.
The menswear retailer that surprises me is The Farmers.I think they are gaining market share.

Yes farmers are doing well, acquired some high quality buyers..never under estimate the difference they can make.

[Ghost Monkey]

Ok, so assuming that this has been oversold a bit and that Roger's assumptions are on the money (refer post #561 (http://www.sharetrader.co.nz/showthread.php?4494-HLG-Hallenstein-Glasson&p=631783&viewfull=1#post631783)), one could safely assume that there is definitely some upside to this stock if we assume that the headwinds of this year have retreated!
However, and I may be assuming too much here so please forgive me if I am, we may also assume that they face more competition and lack of 'brand desirability' in which case we can therefore assume that margins may stay under pressure, with the resulting assumpti.........wait a minute.........where'd my tail go? ..........
tail? ....... that's strange, I swear it was here just a minute ago ............tail?.............. ................. ................... .....
........
........
(exit screen, wanders off to look for tail)

[Beagle]

Last time I got on this horse about a year ago people were saying that competition was going to take its toll e.t.c. e.t.c. and yet they grew top line sales and profit has held up reasonably well with the lower dollar at 65 cents.

I think with Di Humpheries leadership and fashion expertise back at Glasson's (Hallensteins grew sales 6%, (see FY16 interim report) there's definitely a lot of potential there and the company itsdelf said the Glassons side of things is getting back on track and confirmed the key summer stock purchases are to be made at a much more favourable exchange rate.

Even if all that potential isn't fully realised and shareholders simply enjoy the (30 / 0.72) / 271 = 15.4% gross dividend yield and the SP does nothing this hound will still be wagging his tail in delight with the size of those XXXXL dividend feeds.

[boysy]

Think holders are not understanding the completion heading HGL way much like AIR there's a reason why the divi yield
Is creeping up its all to do with completion we are entering a new age where competitors are offering cheaper products of better quality than HGL can offer. Can shareholders honestly say they would rather shop at HGL tha competitors such as top shop etc ?

[Beagle]

Or maybe the bean counting dog has seen 1001 sets of financials and understands the effects a key change in the input costs has on the bottom line, something we will see with the completion of their FY17 financial's and knows the company has a well established brand with a widespread distribution network...not one or two shops in the odd location here and there. Disc Hold AIR too, many think competition will kill that company's profitability too, (YAWN). (long week for the hound, tired of hunting,......must be time to sit by the food bowl and wait for a divvy feed shortly, AIR will be the first huge feed I think)

[winner69]

Or maybe the bean counting dog has seen 1001 sets of financials and understands the effects a key change in the input costs has on the bottom line, something we will see with the completion of their FY17 financial's and knows the company has a well established brand with a widespread distribution network...not one or two shops in the odd location here and there. Disc Hold AIR too, many think competition will kill that company's profitability too, (YAWN). (long week for the hound, tired of hunting,......must be time to sit by the food bowl and wait for a divvy feed shortly, AIR will be the first huge feed I think)

Only 1001 sets of accounts - lazy bugger

Accountants understand margins and what input costs can do for them - good or bad

But more importantly margin management comes instinctively to real retailers and the older they get the more canny they get. Rod Duke as the high profile one but HLG have Graeme Popplewell as CEO and Tim Glasson as a Director

Both of these guys (like Rod Duke) instinctively know how to make a buck and I would say far better at it than any accountant. Making a buck just a term for margin management - simple really, buy stuff that punters want at a good price and sell it at a good price(s) and don't get left with too much on the shelf at the end of the day.. HLG have done this very well over many decades - one of the highest margin retailers in NZ and never any real cash problems from having too much stock. They have doing this without any debt as well

Guys like Rod, Graeme and Tim also know things don't stand still - the world changes, fads come and go, competitors come and go. Some of their new stores are pretty classy and I believe the new Christchurch store is going to be the best yet. That will stop Top Shop contemplating going to Christchurch

Hallensteins been going since 1873 and Glassons since early 1900's - I reckon they still be going many more decades with good margins and generating plenty of cash

[boysy]

Roger who is buying HGL clothes the millennials are going on line for cheaper and more stylish options than HGL, looking at financials will not change the fact the retail landscape is changing. HGL has lived with competition for years this is now changing with overseas brands now getting a physical presence n NZ - Margins are going to be squeezed longer term

[Beagle]

Roger who is buying HGL clothes the millennials are going on line for cheaper and more stylish options than HGL, looking at financials will not change the fact the retail landscape is changing. HGL has lived with competition for years this is now changing with overseas brands now getting a physical presence n NZ - Margins are going to be squeezed longer term

People were talking the same thing a year ago and the year before that and yet their top line sales have grown in a soft economy. Margins will expand considerably with the higher Kiwi you mark my words and HLG directors said as much too. These guys didn't come down in the last shower mate. Vast numbers of people still want to try clothes on and see how they feel and look before buying and want to buy from a handy local shop from a trusted brand they know. Agree 100% with what Winner said above...good operators make their own luck.

People were expressing the same concerns regarding Briscoes a year or two back and Rod Duke just keeps on keeping on just like HLG will. They're good operators, keep stock turn high, have a really nice clean balance sheet with no B.S. intangible assets like 101 other companies do and operate in a good middle price point in their segment.

Agree Winner...I need to lift my game....should have that up to 1005 sets of accounts by month end :)

[Snow Leopard]

Roger who is buying HGL clothes the millennials are going on line for cheaper and more stylish options than HGL, looking at financials will not change the fact the retail landscape is changing. HGL has lived with competition for years this is now changing with overseas brands now getting a physical presence n NZ - Margins are going to be squeezed longer term

I feel this is, too a large degree, my fault.
It was after all me who criticised you for providing real-time trade by trade updates of the TIL share price. By the way, have you noticed a new all time closing high for them today?

So whilst it is good to see you out and about, so to speak, and taking on the Glutinous Ramp Hound or whatever he is calling himself now, in such excellent debate, I think it would help your cause a little if you could get the code for the company correct. It is HLG.

Best Wishes
Paper Tiger

Millennials outraged over TV show portraying millennials as outraged (http://www.independent.co.uk/arts-entertainment/tv/news/millennials-outraged-over-tv-show-portraying-millennials-as-outraged-a7184771.html)

[Beagle]

I feel this is, too a large degree, my fault.
It was after all me who criticised you for providing real-time trade by trade updates of the TIL share price. By the way, have you noticed a new all time closing high for them today?

So whilst it is good to see you out and about, so to speak, and taking on the Glutinous Ramp Hound or whatever he is calling himself now, in such excellent debate, I think it would help your cause a little if you could get the code for the company correct. It is HLG.

Best Wishes
Paper Tiger

Millennials outraged over TV show portraying millennials as outraged (http://www.independent.co.uk/arts-entertainment/tv/news/millennials-outraged-over-tv-show-portraying-millennials-as-outraged-a7184771.html)

LOL I've had a couple of after dinner drinks and a big feed so I can see the funny side of that. BTW does the resident cat buy his jelly meat online like millennials apparently buy everything now days ?
Would help one's cause a little if they could spell competition too.

[Beagle]

Only 1001 sets of accounts - lazy bugger

Accountants understand margins and what input costs can do for them - good or bad

But more importantly margin management comes instinctively to real retailers and the older they get the more canny they get. Rod Duke as the high profile one but HLG have Graeme Popplewell as CEO and Tim Glasson as a Director

Both of these guys (like Rod Duke) instinctively know how to make a buck and I would say far better at it than any accountant. Making a buck just a term for margin management - simple really, buy stuff that punters want at a good price and sell it at a good price(s) and don't get left with too much on the shelf at the end of the day.. HLG have done this very well over many decades - one of the highest margin retailers in NZ and never any real cash problems from having too much stock. They have doing this without any debt as well

Guys like Rod, Graeme and Tim also know things don't stand still - the world changes, fads come and go, competitors come and go. Some of their new stores are pretty classy and I believe the new Christchurch store is going to be the best yet. That will stop Top Shop contemplating going to Christchurch

Hallensteins been going since 1873 and Glassons since early 1900's - I reckon they still be going many more decades with good margins and generating plenty of cash

Top post mate and shows you have a very good understanding of the business and the calibre of the people involved unlike some others on here.

[boysy]

I repeat my question who goes shopping at HLG these days (appreciate the ticker correction paper tiger) ?

[Hectorplains]

I repeat my question who goes shopping at HLG these days (appreciate the ticker correction paper tiger) ?

My last foray into said store unwittingly resulted in brutal competition with many sharp elbowed women folk; there wasn't even a sale on. The online revolution might well be stymied by the fairer genders love of shopping as combat sport. I don't know where this puts HLG but it does explain the abomination that are boxers.

[winner69]

My last foray into said store unwittingly resulted in brutal competition with many sharp elbowed women folk; there wasn't even a sale on. The online revolution might well be stymied by the fairer genders love of shopping as combat sport. I don't know where this puts HLG but it does explain the abomination that are boxers.

Betcha most of those women folk had glowing cheeks and smooth skin as a result of swearing by what rosehip and other decentomen folk Trilogy skin care products does for you

And those same women folk had bought their Trilogy from the pharmacy next door - no on line stuff for them

[Hectorplains]

Betcha most of those women folk had glowing cheeks and smooth skin as a result of swearing by what rosehip and other decentomen folk Trilogy skin care products does for you

And those same women folk had bought their Trilogy from the pharmacy next door - no on line stuff for them

Yeah, exactly that! They paid for their armloads of boxer shorts with Heartland eftpos cards, whilst furiously devouring Mr Apples' Jazz apples too. Probably boarded an AIR plane for the journey home...

[Joshuatree]

I repeat my question who goes shopping at HLG these days (appreciate the ticker correction paper tiger) ?

Business men buy their suits and shirts there
Raz stocks up big every 5 years
I bought 2 tshirts for $20 last week
Teenagers from comfortable white middle income demographics buy Tough hoodys and Gangsta trou there for street creed attempts.
Percy goes in there just to look and insert bookmarks in pockets and count them next week.
PT pilots drones in and out of their shops looking for non aligned panel prints.
W69 sits outside with a notice(I am Blind) and a soup tureen collection bowl.
W69Two sits at the next shop front with shades on ;his sign says , "i can see quite clearly"
Roger sits outside in a tip truck , motor running. The tarp moves and a beagle eases to the ground and sneaks in amongst the slacks and boxer shorts, exits moments later with a satisfied grin , jumps back under tarp and settles amidst 10,000 pairs of slightly worn plimsolls.
James and GR8Day coast past in a convertible hummer throwing darts at a board mounted on the radiator cap
boysy drives past in an austin cambridge blue with a white stripe and retrofitted with an airbag. He doesn't look.
Hector brushes against womens elbows going for a record ;23 jabs in the ribs.
Snoopy labourishly writes out a 5 page parking ticket to Roger pointing to the multiple chalk marks and oil stains.
Hoop is sign writing the shop window in squiggly lines, correcting them and also offering palm readings to passing Milfs on the side.
Hallees is humming and all is well on this sunny friday afternoon.;)

[mikeybycrikey]

Last time I saw Roger ramping something, it was AIR: it duely went from about 305 to 205. Hopefully he's more successful here.

I've thought for a while that 270 was a bit low for HLG. It's a decent stock caught in a rough patch. I'd definitely count it for 330 within a few months. $4, I'm not so sure though.

I'd definitely ignore the talk about the dividend. That's a historical measure and HLG likes to keep their divvie high, regardless of the profit. Hopefully dividend and profit can both improve in the next 24 months. When divvie yield is greater than profit, it's just not sustainable!

[Raz]

Last time I saw Roger ramping something, it was AIR: it duely went from about 305 to 205. Hopefully he's more successful here.

I've thought for a while that 270 was a bit low for HLG. It's a decent stock caught in a rough patch. I'd definitely count it for 330 within a few months. $4, I'm not so sure though.

I'd definitely ignore the talk about the dividend. That's a historical measure and HLG likes to keep their divvie high, regardless of the profit. Hopefully dividend and profit can both improve in the next 24 months. When divvie yield is greater than profit, it's just not sustainable!

Interesting comments, I decided to returning to the real world yesterday and attend office drinks at Raz's business and see how the worker bees are doing with HLG very much on my mind.

What i found is a fragmented market in the world of shopping from an informal survey..the administrators, under paid and over worked, bless them, find no time to get out of the office so resort to internet shopping..usually the cheaper sites. The touch team are fizzing with the prospect of planning a major shop after their Sydney tournament visit, good for them, just loving the cross rate. One associate is planning a trip to USA and I point her towards Portland, great vib of a city with tax free shopping..try Washington Square, Tigard, I kindly suggest.

My aspiring managers are all wearing clothes from Sergio's or Euro style as we exchanged pleasantries while my main managers say their wives do the shopping and most of it is via the internet with UK sites in favour currently.

Also love within this group for the USD being higher...more future US trip being planned by the sounds of it.

The older set seem to buy from farmers when I caught up.

Pick up the kids from sport on the way home and suggest HLG and the reaction will not get repeated here.

It use to be HLG was go to shopping or at least always considered and they did not get a mention from anyone..I rest my case..trigger finger ready to sell.

The forex rate stronger may work for HLG however it makes other options cheaper as well...including shopping trips overseas.

[Raz]

Only 1001 sets of accounts - lazy bugger

Accountants understand margins and what input costs can do for them - good or bad

But more importantly margin management comes instinctively to real retailers and the older they get the more canny they get. Rod Duke as the high profile one but HLG have Graeme Popplewell as CEO and Tim Glasson as a Director

Both of these guys (like Rod Duke) instinctively know how to make a buck and I would say far better at it than any accountant. Making a buck just a term for margin management - simple really, buy stuff that punters want at a good price and sell it at a good price(s) and don't get left with too much on the shelf at the end of the day.. HLG have done this very well over many decades - one of the highest margin retailers in NZ and never any real cash problems from having too much stock. They have doing this without any debt as well

Guys like Rod, Graeme and Tim also know things don't stand still - the world changes, fads come and go, competitors come and go. Some of their new stores are pretty classy and I believe the new Christchurch store is going to be the best yet. That will stop Top Shop contemplating going to Christchurch

Hallensteins been going since 1873 and Glassons since early 1900's - I reckon they still be going many more decades with good margins and generating plenty of cash

Not correct about Christchurch CBD shopping, I can confirm several international and high profile locals competitors are already signed up for Christchurch CBD. They are not scaring anyone off :-)

[waikare]

I repeat my question who goes shopping at HLG these days (appreciate the ticker correction paper tiger) ?


About 18 months ago I brought a pair of jeans from HLG, being a gold card holder they will probably be the last pair of jeans that I am very going to buy

[winner69]

Interesting comments, I decided to returning to the real world yesterday and attend office drinks at Raz's business and see how the worker bees are doing with HLG very much on my mind.

What i found is a fragmented market in the world of shopping from an informal survey..the administrators, under paid and over worked, bless them, find no time to get out of the office so resort to internet shopping..usually the cheaper sites. The touch team are fizzing with the prospect of planning a major shop after their Sydney tournament visit, good for them, just loving the cross rate. One associate is planning a trip to USA and I point her towards Portland, great vib of a city with tax free shopping..try Washington Square, Tigard, I kindly suggest.

My aspiring managers are all wearing clothes from Sergio's or Euro style as we exchanged pleasantries while my main managers say their wives do the shopping and most of it is via the internet with UK sites in favour currently.

Also love within this group for the USD being higher...more future US trip being planned by the sounds of it.

The older set seem to buy from farmers when I caught up.

Pick up the kids from sport on the way home and suggest HLG and the reaction will not get repeated here.

It use to be HLG was go to shopping or at least always considered and they did not get a mention from anyone..I rest my case..trigger finger ready to sell.

The forex rate stronger may work for HLG however it makes other options cheaper as well...including shopping trips overseas.

Raz - returning to the real world must have been a humbling experience for you.

Disappointed that you weren't actually with the kids at sport and getting involved in their activities ....but at least you were there to pick them up

Back to Hallensteins - donyou really think they will be a non-event in a few years time

[BIRMANBOY]

This is what I like to refer to as "micro management share investing". Forming investment decisions on how your interactions with the company play out. Seemingly important at a personal level, but highly insignificant when you look at the big picture. Easy to do and we all fall into the trap occasionally but not necessarily the most productive of reasons to buy or sell. I don't think I have ever been into Hallensteins (or Glassons for that matter) but that is no sure indicator of anything other than the possibility that I might be a nudist but probably not a cross dresser. Sort of like the WHS syndrome...that's been clunking out the profits and dividends for years and yet manyt of the posts are of the variety..."why would you shop there?" "Cheap junk and terrible service"
Interesting comments, I decided to returning to the real world yesterday and attend office drinks at Raz's business and see how the worker bees are doing with HLG very much on my mind.

What i found is a fragmented market in the world of shopping from an informal survey..the administrators, under paid and over worked, bless them, find no time to get out of the office so resort to internet shopping..usually the cheaper sites. The touch team are fizzing with the prospect of planning a major shop after their Sydney tournament visit, good for them, just loving the cross rate. One associate is planning a trip to USA and I point her towards Portland, great vib of a city with tax free shopping..try Washington Square, Tigard, I kindly suggest.

My aspiring managers are all wearing clothes from Sergio's or Euro style as we exchanged pleasantries while my main managers say their wives do the shopping and most of it is via the internet with UK sites in favour currently.

Also love within this group for the USD being higher...more future US trip being planned by the sounds of it.

The older set seem to buy from farmers when I caught up.

Pick up the kids from sport on the way home and suggest HLG and the reaction will not get repeated here.

It use to be HLG was go to shopping or at least always considered and they did not get a mention from anyone..I rest my case..trigger finger ready to sell.

The forex rate stronger may work for HLG however it makes other options cheaper as well...including shopping trips overseas.

[tim23]

Well boysy I buy their work clothing good value stylish and durable and been doing so a several years

[Raz]

Raz - returning to the real world must have been a humbling experience for you.

Disappointed that you weren't actually with the kids at sport and getting involved in their activities ....but at least you were there to pick them up

Back to Hallensteins - donyou really think they will be a non-event in a few years time


Hope you don't assume as much with your investing:-) I'm blessed that i own and hardly need to work anymore. i appreciate it every day. I also get heaps of time with my children while others don't. Don't see many fathers around school. Last night was sports practice which parents are not allowed to attend. Today is the games :-)

Retail management is generally well managed in NZ, it has to be to survive. I would like Hallensteins to prosper i'm just yet to see anything that convinces me it is moving with the changing demographic and market.

How is the ramp going?

[Raz]

This is what I like to refer to as "micro management share investing". Forming investment decisions on how your interactions with the company play out. Seemingly important at a personal level, but highly insignificant when you look at the big picture. Easy to do and we all fall into the trap occasionally but not necessarily the most productive of reasons to buy or sell. I don't think I have ever been into Hallensteins (or Glassons for that matter) but that is no sure indicator of anything other than the possibility that I might be a nudist but probably not a cross dresser. Sort of like the WHS syndrome...that's been clunking out the profits and dividends for years and yet manyt of the posts are of the variety..."why would you shop there?" "Cheap junk and terrible service"

I agree personal outlook only goes so far..look at the dividend only is myopic..what about the non performing share price and I'm talking not just the past year. Assuming historical dividend will and can continue is also an open question..

I have found if you have micro-economic information you can get ahead of the market and determine trends thou.

ps tim23 good to hear! Even the rampers haven't made that comment!

[Beagle]

Last time I saw Roger ramping something, it was AIR: it duely went from about 305 to 205. Hopefully he's more successful here.

I've thought for a while that 270 was a bit low for HLG. It's a decent stock caught in a rough patch. I'd definitely count it for 330 within a few months. $4, I'm not so sure though.

I'd definitely ignore the talk about the dividend. That's a historical measure and HLG likes to keep their divvie high, regardless of the profit. Hopefully dividend and profit can both improve in the next 24 months. When divvie yield is greater than profit, it's just not sustainable!

The dog was keen on AIR from under $2. You must have missed all the barking last month about SCL when it was $2.90, (now $3.40), or SUm at $4, now close to $5...try and keep up, there's a good chap.

[Beagle]

Business men buy their suits and shirts there
Raz stocks up big every 5 years
I bought 2 tshirts for $20 last week
Teenagers from comfortable white middle income demographics buy Tough hoodys and Gangsta trou there for street creed attempts.
Percy goes in there just to look and insert bookmarks in pockets and count them next week.
PT pilots drones in and out of their shops looking for non aligned panel prints.
W69 sits outside with a notice(I am Blind) and a soup tureen collection bowl.
W69Two sits at the next shop front with shades on ;his sign says , "i can see quite clearly"
Roger sits outside in a tip truck , motor running. The tarp moves and a beagle eases to the ground and sneaks in amongst the slacks and boxer shorts, exits moments later with a satisfied grin , jumps back under tarp and settles amidst 10,000 pairs of slightly worn plimsolls.
James and GR8Day coast past in a convertible hummer throwing darts at a board mounted on the radiator cap
boysy drives past in an austin cambridge blue with a white stripe and retrofitted with an airbag. He doesn't look.
Hector brushes against womens elbows going for a record ;23 jabs in the ribs.
Snoopy labourishly writes out a 5 page parking ticket to Roger pointing to the multiple chalk marks and oil stains.
Hoop is sign writing the shop window in squiggly lines, correcting them and also offering palm readings to passing Milfs on the side.
Hallees is humming and all is well on this sunny friday afternoon.;)

LOL good humour there, well done.

[mikeybycrikey]

The dog was keen on AIR from under $2. You must have missed all the barking last month about SCL when it was $2.90, (now $3.40), or SUm at $4, now close to $5...try and keep up, there's a good chap.

The comment last night was mostly meant in jest. I do appreciate your contributions here.

I probably need to read a few more of the threads on this site to get the full picture though. So many different companies to keep track of!

[Rep]

I will be interested to see the relative pricing and parity of H&M and Zara (presumably Uniqlo can't be far away either) when they arrive in the next few months. Topshop here is effectively being operated by Barkers so they aren't really going to stick out their necks with disruptive pricing.

In my experience, H&M are pretty ruthless about clearing stock between seasons and generating foot traffic. That applies to their European, US and Australian stores so will be intrigued with how aggressive they may be here.

[winner69]

Seeing things looking more positive for FY17 I updated this chart which shows what a $20m profit would look like in historical terms .....and what the share price is likely to do

And don't forget to factor in what 30 cent plus dividend looks like in the current low interest rate environment

[Beagle]

Nice chart mate. Genuine prospects for a decent recovery over the next year and then there's THAT dividend yield !!

[winner69]

Nice chart mate. Genuine prospects for a decent recovery over the next year and then there's THAT dividend yield !!

I think that chart is cool, if only because for a long period of time the share prices reflects actual company performance. Only exception was 2013 when it disappointed and the share price got monstered.

One of percy's favourite quotes is 'price follows earnings' (or something like that). HLG is a great example and it bodes well for the next year at least

[Beagle]

I think that chart is cool, if only because for a long period of time the share prices reflects actual company performance. Only exception was 2013 when it disappointed and the share price got monstered.

One of percy's favourite quotes is 'price follows earnings' (or something like that). HLG is a great example and it bodes well for the next year at least

Percy's wrong in this instance and others. This reporting season is all about the outlook in my opinion. AIR an obvious example. SP is not following earnings it has lead expected earnings downgrade for FY17. Another good example this company. Earnings will decline by circa 20% when they report but the outlook is the key and management have already stated the reasons why they have confidence that the profitability can be restored to former level's. SP will follow better outlook once the market begins to recognise there's better times ahead.

[TheHunter]

Percy's wrong in this instance and others. This reporting season is all about the outlook in my opinion. AIR an obvious example. SP is not following earnings it has lead expected earnings downgrade for FY17. Another good example this company. Earnings will decline by circa 20% when they report but the outlook is the key and management have already stated the reasons why they have confidence that the profitability can be restored to former level's. SP will follow better outlook once the market begins to recognise there's better times ahead.

"SP follows expected earnings"* ;)

[winner69]

Up to $2.85 so creeping up nicely

Not too late to get a bargain

Will still be in business this time next year and paying out a 30 cents plus dividend

[Raz]

Up to $2.85 so creeping up nicely

Not too late to get a bargain

Will still be in business this time next year and paying out a 30 cents plus dividend

blardy hawker...not too late to get a bargin!! lol

[Beagle]

Up to $2.85 so creeping up nicely

Not too late to get a bargain

Will still be in business this time next year and paying out a 30 cents plus dividend

That massive final dividend which they've basically confirmed as the same as previous years 16.5 cps comes at a brilliant time of year in December for Christmas and holidays.
Buy some shares in HLG and its the gift you give yourself that keeps on giving every Christmas !!

[Kelvin]

Strange dividend schedule though, paying in April and December :confused:

Got some yesterday at 2.70 after selling my FBU at 10 :eek2:

[mikeybycrikey]

I see a down day ahead for HLG.

H&M opening at Sylvia Park in October. Long-term impact is probably unknown but short term it might hit the SP.

http://www.stuff.co.nz/business/industries/83251972/hm-announces-opening-date-for-first-nz-store

[Beagle]

One store...I'm quaking in my boots LOL. I see an up day, check the exchange rate, nearly 73 cents...fantastic for importers margin's ! There's a clear break up through the 100 dat MA so for a TA point of view it seems clear the SP recovery trend has begun :t_up:

[boysy]

Roger the strong dollar will continue to force the RBNZs hand to cut further to ramp up inflation . more competition and lower dollar in the year ahead no doubt about either which will hurt margins. Might be a divi yield play but longer term I can't see capital appreciation longer term.

[see weed]

Strange dividend schedule though, paying in April and December :confused:

Got some yesterday at 2.70 after selling my FBU at 10 :eek2:
That's funny, I sold some for $2.70 the same day, which I bought a month earlier for 2.64, and bought AIR and ATM, but will buy back into HLG closer to their div pay out:).

[Beagle]

Roger the strong dollar will continue to force the RBNZs hand to cut further to ramp up inflation . more competition and lower dollar in the year ahead no doubt about either which will hurt margins. Might be a divi yield play but longer term I can't see capital appreciation longer term.

Even if they cut another 50 bps our interest rates are still some of the highest in the world. Dollar stronger for longer IMO.

[Toulouse - Luzern]

Quote from earlier in the thread

"One of percy's favourite quotes is 'price follows earnings' (or something like that)."

One of Phaedras many quotations was:
"Price follows volume ...."

HLG Prices downloaded from Yahoo Finance

https://nz.finance.yahoo.com/q/hp?s=HLG.NZ&a=00&b=1&c=2016&d=07&e=16&f=2016&g=w

Monthly Summary

Date Open High Low Close Average Volume
1 Aug 2016 2.65 2.86 2.63 2.85 96,800
1 Jul 2016 2.65 2.70 2.59 2.62 46,900
1 Jun 2016 2.72 2.76 2.65 2.65 40,400
2 May 2016 2.89 2.96 2.70 2.72 43,600

Is something happening here ...

Weekly Summary:
From 27,700 in June 2016 to 134,000 in August 2016

HLG Open High Low Close Average volume
15-Aug-16 2.70 2.86 2.7 2.85 134,000
8-Aug-16 2.68 2.84 2.67 2.71 106,200
1-Aug-16 2.65 2.74 2.63 2.68 56,000
25-Jul-16 2.63 2.65 2.59 2.62 54,400
18-Jul-16 2.65 2.68 2.61 2.61 60,600
11-Jul-16 2.65 2.7 2.65 2.66 38,900
4-Jul-16 2.68 2.7 2.64 2.64 37,700
27-Jun-16 2.67 2.7 2.65 2.68 27,700

[boysy]

Roger our interest rates will continue to fall while the US is looking to raise their rates albeit off a very low base. The NZD carry trade is in favour due to the interest rate differential but as our rates continue to fall and US at the very least stay stable look to see the NZD drop later on this year.

[Rep]

One store...I'm quaking in my boots LOL. I see an up day, check the exchange rate, nearly 73 cents...fantastic for importers margin's ! There's a clear break up through the 100 dat MA so for a TA point of view it seems clear the SP recovery trend has begun :t_up:

Roger - if you had seen the queues to enter H&M when it opened in Melbourne and in Sydney, I'd be a touch more concerned as they have generally scaled up stores reasonably quickly.
They are a desirable anchor retailer in a number of locations in Australia, Europe and in the US - whilst HLG has been a consistent divvy stock for a long time, I'd be keeping an eye on H&M.

H&M and Zara are both businesses pitched at affordable AND fashionable. They haven't become behemoths globally without knowing a thing or two about building share and rolling out stores. They also have for the most part, pricing parity across their stores.

In the same way, IKEA opened with one store in Australia, they have a considerable business in Australia quite quickly at the expense of traditional retailers.

PS - I wouldn't be looking at the USD/NZD cross for H&M either.... it's more like the Euro/NZD

[Beagle]

Not worried Boysy. I hold many stocks that would benefit from the currency being a little lower, (beauty of a well diversified portfolio), and I am working my numbers for FY17 with HLG on an average exchange rate of 70 cents U.S., something they'll easily be able to achieve with forward cover now the spot rate is close to 73. U.S. raising rates will be at a snails pace in my opinion and interest rates world-wide with subdued growth will stay ultra low for the foreseeable future in my opinion. I think RBNZ will need some new tools in their toolkit.

[Raz]

Roger - if you had seen the queues to enter H&M when it opened in Melbourne and in Sydney, I'd be a touch more concerned as they have generally scaled up stores reasonably quickly.
They are a desirable anchor retailer in a number of locations in Australia, Europe and in the US - whilst HLG has been a consistent divvy stock for a long time, I'd be keeping an eye on H&M.

H&M and Zara are both businesses pitched at affordable AND fashionable. They haven't become behemoths globally without knowing a thing or two about building share and rolling out stores. They also have for the most part, pricing parity across their stores.

In the same way, IKEA opened with one store in Australia, they have a considerable business in Australia quite quickly at the expense of traditional retailers.

PS - I wouldn't be looking at the USD/NZD cross for H&M either.... it's more like the Euro/NZD

H & M are well advance on several stores....

[Toulouse - Luzern]

Quote from earlier in the thread

"One of percy's favourite quotes is 'price follows earnings' (or something like that)."

One of Phaedras many quotations was:
"Price follows volume ...."

HLG Prices downloaded from Yahoo Finance

https://nz.finance.yahoo.com/q/hp?s=...=16&f=2016&g=wIs something happening here ...

Weekly Summary:
From 27,700 in June 2016 to 134,000 in August 2016

Reformat table in a PDF to make clearer

8235

[Beagle]

Reformat table

8235

He was a wise one. With steadily increasing volumes of late obviously I'm not the only one that sees real value in the stock.

[Snow Leopard]

...
PS - I wouldn't be looking at the USD/NZD cross for H&M either.... it's more like the Euro/NZD

I would have to walk down to my nearest H&M or Zara or Uniqlo (do you have them yet?) and read the labels in order to check, but I am betting that they have supply agreements for stock denominated in US$ from all the usual suspects.

My bet goes so far to having bought some HLG shares (software flagged it up for price & volume movement).

Best Wishes
Paper Tiger

[nextbigthing]

I see a down day ahead for HLG.

H&M opening at Sylvia Park in October. Long-term impact is probably unknown but short term it might hit the SP.

http://www.stuff.co.nz/business/industries/83251972/hm-announces-opening-date-for-first-nz-store

It has been known for some time they were coming soon MikeyB, this would be priced in in even well inefficient market.

[winner69]

Hey Roger - did you see the Tiger -.My bet goes so far to having bought some HLG shares (software flagged it up for price & volume movement).

So our buying has triggered a buy by PT -,a bit ironic eh

Hope we don't let him down

[Beagle]

Hey Roger - didvyou see the Tiger -.My bet goes so far to having bought some HLG shares (software flagged it up for price & volume movement).

So our buying has triggered a buy by PT -,a bit ironic eh

Hope we don't let him down

Yes, ironic that my buying is materially contributing towards triggering volume signals and a TA signal, (breaking out through the 100 day MA). Sometimes it pays to make the market rather than following TA signals like KW was so fond of doing but I get worried when the cat and dog are on the same page...might be okay seeing as the massive dividend feeds get put into separate food bowls :)

[couta1]

Stop being so Catty mate, learn to share your food bowl. PS-You've nealy convinced me to buy some.

[Beagle]

Stop being so Catty mate, learn to share your food bowl. PS-You've nealy convinced me to buy some.

LOL too funny mate :) P.S. e.mail or call me mate if you want to have a chat about this one.

[winner69]

Getting close to $3

Share price increasing nicely

[Jantar]

I bought my first small parcel of HLG at the beginning of last week. 8% increase in 12 days has me smiling. :t_up:

[winner69]

Tony Alexander of BNZ in his Weekly Overview said this about the NZD/USD -

Chances are we head soon to 75 cents then speculate about 80 and eventually the 88 peak of 2014.

Jeez - that will help HLG margins - a 40 cent dividend next year or two?

[Beagle]

Interestingly he also says the 10 year average is 74.3 cents, wow, didn't realise that. The 65 cents they suffered this year is 12.5% below ten year average. Might have to re-model my expectations @ 74 cents, currently expecting over $20m based on 70 cents for FY17. If we get up into the late 70's or early 80's it's BONANZA time for importers, (not so good for exporters).

[winner69]

Interestingly he also says the 10 year average is 74.3 cents, wow, didn't realise that. The 65 cents they suffered this year is 12.5% below ten year average. Might have to re-model my expectations @ 74 cents, currently expecting over $20m based on 70 cents for FY17. If we get up into the late 70's or early 80's it's BONANZA time for importers, (not so good for exporters).

Spooky thing with that average of 74 cents is that only about 20% (going from memory when I last did it) of the time is it within +/-2 cents - rest of time oscillating from highs to lows

That 74 cents goes back to the 70'cs though - is only about 66 this century

First time I ventured out of the country I got US$1,30 odd for my NZ$

[Arbroath]

Interestingly he also says the 10 year average is 74.3 cents, wow, didn't realise that. The 65 cents they suffered this year is 12.5% below ten year average. Might have to re-model my expectations @ 74 cents, currently expecting over $20m based on 70 cents for FY17. If we get up into the late 70's or early 80's it's BONANZA time for importers, (not so good for exporters).

I hold quite a few HLG but wouldn't be quite so bullish. Some of the FX gain will evaporate with competition and there are many other variables like weather and new competitors to keep in mind. I'm hoping they can deliver $17-18m+ next year but just because NZDUSD might be 75c instead of 65c does not make $20m certain or even likely imho.

[winner69]

I don't think HLG have ever seen themselves as a 'growth' company

Over the last few years they have refreshed / fine tuned their business to meeting the ever changing competitive landscape (just like they have done for over a hundred years). Sales growth over the last 5 years has been less than 2%pa

However the business generates heaps of cash. Spend some on keeping then business going and pay the rest out as dividends. You can do this when you don't have any debt.

Table shows their dividend history and % of operating cash flow paid out. Guessed F16 (and probably more than 30 cents) but still pretty healthy eh.

From F11 to F15 they have generated $120m of cash - reinvested $37m back into the business - and paid out $94m in dividends

Despite the gloom and despondency of this impending global domination of the NZ market I reckon HLG will be show resilience - and maintain those pretty health dividends for some time

So how much do you pay for a minimum 30 cent dividend - heaps more then $2.85 I would say - more like $3.75 to $4.00 these days

[Beagle]

I don't think HLG have ever seen themselves as a 'growth' company

Over the last few years they have refreshed / fine tuned their business to meeting the ever changing competitive landscape (just like they have done for over a hundred years). Sales growth over the last 5 years has been less than 2%pa

However the business generates heaps of cash. Spend some on keeping then business going and pay the rest out as dividends. You can do this when you don't have any debt.

Table shows their dividend history and % of operating cash flow paid out. Guessed F16 (and probably more than 30 cents) but still pretty healthy eh.

From F11 to F15 they have generated $120m of cash - reinvested $37m back into the business - and paid out $94m in dividends

Despite the gloom and despondency of this impending global domination of the NZ market I reckon HLG will be show resilience - and maintain those pretty health dividends for some time

So how much do you pay for a minimum 30 cent dividend - heaps more then $2.85 I would say - more like $3.75 to $4.00 these days

Good post sum's the situation up very well in my opinion.

[winner69]

Closing in the $3 mark .....good stuff

[Raz]

Ya good stuff retails stats looking a little static the past two months.. To early to tell if a trend

[winner69]

Retail Watch data (from electronic card spend) showed clothing and footwear store August sales were up 6.2% on last year. Total retail sales up 3.1% so clothing doing very well

One would think that Hallensteins / Glassons etc recent sales in NZ would be looking pretty healthy

Getting close to 300 - still cheap as

[Raz]

Retail Watch data (from electronic card spend) showed clothing and footwear store August sales were up 6.2% on last year. Total retail sales up 3.1% so clothing doing very well

One would think that Hallensteins / Glassons etc recent sales in NZ would be looking pretty healthy

Getting close to 300 - still cheap as


So who has the correct data, on the radio they were quoting the infometrics data (??) suggested static/declining clothing and footwear for past two months...hmmmm

I bought more of these suckers a while back on a punt based on Rodger recommendation and I will not go sour if he is proven wrong for a change..I will buy him a beer instead...no depth or scale compared to AIR so buying for yield and the rising current...go figure.

[winner69]

That Retail Watch data is sourced from Westpac. Generally sort of ties in with Stats NZ Electronic Card Tranasaction monthly figures but gives more industry breakdown.

Stats NZ said total spend was up 3.7% on August last year

Probably the people on the radio were talking seasonally adjusted numbers .....which are flat / slightly down .....but being well ahead of last year is good

[Beagle]

You been busy here today Raz ?

[winner69]

You been busy here today Raz ?

Good rise today eh - close 298, next step 300 plus

If it wasn't Raz today it going to cost him heaps more to get on thevtrain.

But heck, not much difference between 298 and 310 when its about 400 sometime next year

[Valuegrowth]

http://markets.ft.com/data/equities/tearsheet/forecasts?s=HLG:NZC

[winner69]

http://markets.ft.com/data/equities/tearsheet/forecasts?s=HLG:NZC

I like this bit

The 4 analysts offering 12 month price targets for Hallenstein Glassons Holdings Limited have a median target of 310.00, with a high estimate of 410.00 and a low estimate of 275.00. The median estimate represents a 10,552.92% increase from the last price of 2.91.

[Valuegrowth]

There are some market participants that they like Santa rally. Will there be such a rally for Glasson?

http://www.reuters.com/article/us-usa-stocks-santa-rally-idUSTRE6B95GI20101210

Retail stocks could stand out in Santa Claus rally

[Raz]

I like this bit

The 4 analysts offering 12 month price targets for Hallenstein Glassons Holdings Limited have a median target of 310.00, with a high estimate of 410.00 and a low estimate of 275.00. The median estimate represents a 10,552.92% increase from the last price of 2.91.

haha no self edit..not me today, last purchased HLG mid-August..surprise bad debt recovered today... so a nice windfall to play with..hmmm what to buy....

[Beagle]

Few index changes tomorrow, might like to weigh up your options if there's any possible short term opportunities there. Disc Hold Scales.

[BlackPeter]

Few index changes tomorrow, might like to weigh up your options if there's any possible short term opportunities there. Disc Hold Scales.

Roger - any reason you put this post on the HLG thread? Do you assume that they might get back into the NZX50?

[Beagle]

Roger - any reason you put this post on the HLG thread? Do you assume that they might get back into the NZX50?

They are being added to the NZX50 tomorrow during the last 15 minutes of trading as part of the closing match process.

[BlackPeter]

They are being added to the NZX50 tomorrow during the last 15 minutes of trading as part of the closing match process.

Sure your information is right? They traded a total of 2007 shares in today's closing process. This certainly can't be enough to fill any index fund?


8302

[Snow Leopard]

HLG was not in the NZX50 prior to close today and is not in the NZX50 after close today.

Or to put it another way, it was and is, as they say, outside the NZX50.

It was never made it to the play offs for promotion.

Best Wishes
Paper Tiger

[Valuegrowth]

This is an old link and it has included Hallenstein Glasson as well.

http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11617933

Top cash earners on the NZ share market

[Snow Leopard]

This is an old link and it has included Hallenstein Glasson as well.

http://www.nzherald.co.nz/personal-finance/news/article.cfm?c_id=12&objectid=11617933

Top cash earners on the NZ share market

Dated 6-Apr-2016.

Now if we had bought $10,000 of each of the seven at close that day then at close today (no reinvesting, no tax to pay or recoup) we would have (shares+cash):

PGW: $13,086
NZR: $7,368
MVN: $11,405
HLG: $9,952
STU: $9,804
AIR: $7,776
OIC: $7,377

for an overall loss of $3,231 (or 4.62%)

Best Wishes
Paper Tiger

[winner69]

Dated 6-Apr-2016.

Now if we had bought $10,000 of each of the seven at close that day then at close today (no reinvesting, no tax to pay or recoup) we would have (shares+cash):

PGW: $13,086
NZR: $7,368
MVN: $11,405
HLG: $9,952
STU: $9,804
AIR: $7,776
OIC: $7,377

for an overall loss of $3,231 (or 4.62%)

Best Wishes
Paper Tiger

Just shows you that many of those using their term deposit cash chasing higher yields from stocks are going to be disappointed over time - just imagine how many billions could be lost if/when the market crashes

[Hectorplains]

NBR article this morning on NZX retailers.

Notes that HLG profit is lowest since 2009. The reasons given are that they have "suffered from a lower exchange rate that increased the cost of offshore purchases, mild winter temperatures that prompted discounting of winter categories, and a lack of effective management at its Glassons business."

Oddly Kathmandu would have faced the first two conditions (possibly more so even for the second) yet they're been labelled as, "top performer." Still Di's back from fixing PPL, so she'll have Glassons' humming in no time.

[percy]

Dated 6-Apr-2016.

Now if we had bought $10,000 of each of the seven at close that day then at close today (no reinvesting, no tax to pay or recoup) we would have (shares+cash):

PGW: $13,086
NZR: $7,368
MVN: $11,405
HLG: $9,952
STU: $9,804
AIR: $7,776
OIC: $7,377

for an overall loss of $3,231 (or 4.62%)

Best Wishes
Paper Tiger

Thank you Paper Tiger.
Really brings home the sheer folly of chasing dividends, and not concentrating on eps growth.

[winner69]

Hey Roger, HLG share price over $3 -- good stuff eh

Was convinced $2.60 in July was about as low as it was going to go - and outlook for future bound to improve

Up 16% in less than 2 months with more to come

[nextbigthing]

Hey Roger, HLG share price over $3 -- good stuff eh

Was convinced $2.60 in July was about as low as it was going to go - and outlook for future bound to improve

Up 16% in less than 2 months with more to come

Roger is still sobering up in the cells. But I'll anticipate his reply below;

"Yes Winner, this dividend hound loves a big feed and HLG are keeping my bowl full, whilst cleverly increasing the size of my bowl too".

[Lewylewylewy]

Ever since somebody on this forum mentioned that the likes of H&M could come to NZ, I've never seen HLG as something I want to invest in. It's like a time bomb waiting for some big foreign stores to come in and just whomp HLG. It could happen at any time, but currently I feel like we're just protected by NZ being a small market and generally not thought of by others as a location to set up a business. however, NZ is getting more and more popular and people are aware of it more and more now. In less than a decade I see a high risk of them getting some potentially crushing competition.

That said, HLG are a great vehicle for traders. I just wouldn't invest there anymore.

[Jantar]

....

That said, HLG are a great vehicle for traders. I just wouldn't invest there anymore.
Well I'm happy. I bought my first HLG shares 6 weeks ago. In that time they have risen almost 15% and are likely to pay an annual dividend of around 10% after tax.

[Lewylewylewy]

Well I'm happy. I bought my first HLG shares 6 weeks ago. In that time they have risen almost 15% and are likely to pay an annual dividend of around 10% after tax.

I did the same thing earlier in the year (or was it last year? I have XRO concept of time). Sold up and made some monies. They're lower than they were when I bought and sold them last.

[winner69]

Ever since somebody on this forum mentioned that the likes of H&M could come to NZ, I've never seen HLG as something I want to invest in. It's like a time bomb waiting for some big foreign stores to come in and just whomp HLG. It could happen at any time, but currently I feel like we're just protected by NZ being a small market and generally not thought of by others as a location to set up a business. however, NZ is getting more and more popular and people are aware of it more and more now. In less than a decade I see a high risk of them getting some potentially crushing competition.

That said, HLG are a great vehicle for traders. I just wouldn't invest there anymore.

And there's a Top Shop about to open next door to their newish flash Lambton Quay store

Bugger - brings the day the Glassons are 'whomped' and that 'time bomb' goes off - yeah right

[winner69]

Full year out - numbers slightly better than what they said they would be and some interesting segmental numbers.

Thats history

The important part

Future Outlook - Group sales for the first 6 weeks of the year are +9%. The recovery in Glassons is well underway and we anticipate a much improved profit performance for the current trading period.


Jeez sales up 9% so far ....add in better margins....no wonder they are saying much improved profit performance for this year

Share price could respond favourably to this typically modest announcement from HLG

[winner69]

For you dividend hounds final of 16.5 cents same as last year. full year being 30 cents

With 'much improved profits' could get a bigger dividends in 2017

Way they going that 30 cents is guaranteed minimum - makes $3 share price look really super cheap with possibility if say 32/33 cents dividend

Roger would say thats a gross dividend yield of 13.8% guaranteed

[Biscuit]

For you dividend hounds final of 16.5 cents same as last year. full year being 30 cents

With 'much improved profits' could get a bigger dividends in 2017

Way they going that 30 cents is guaranteed minimum - makes $3 share price look really super cheap with possibility if say 32/33 cents dividend

Roger would say thats a gross dividend yield of 13.8% guaranteed

Yes, that's a very positive announcement going forward for the next year, sure been a bit of a roller-coaster recently this one

[James108]

Yes, that's a very positive announcement going forward for the next year, sure been a bit of a roller-coaster recently this one

Just bought more at $3.07.

Very positive announcement +9% in sales with an increase in gross profit (from a higher exchange rate) should result in a large increase in NPAT.

[winner69]

Share price $3.15 now

Good stuff

More to come i reckon

[Snow Leopard]

So results poor - future looking good.

Glad to have got in early on this.

Back to the grindstone. :(

Best Wishes
Paper Tiger

[percy]

Share price $3.15 now

Good stuff

More to come i reckon

Better be,as I brought some for the wife today.!!
Average price paid was $3.139 .She also had the balance of her TNR order filled at $3.14.
Be interesting to see which performs better HLG or TNR.
This will be the first retailer I have brought for many years.

[Snoopy]

This will be the first retailer I have brought for many years.


Restaurant Brands doesn't count?

SNOOPY

[percy]

Restaurant Brands doesn't count?

SNOOPY

No.........................
Neither does CVT,or TIL.
Just the way I see the sector.
You are most probably right to include RBD as a retail stock,but I don't.!

[see weed]

Me back on board again after selling 20,000 @ 2.72c last month to to buy AIR. What a boo boo that was:D. Bought 10,000 at close at $3.14c this arvonoon, go booby go:t_up:.

[tim23]

Good for you for admitting your error, my recent one was to see some of my TME for $4.60!

[Hectorplains]

http://www.stuff.co.nz/business/84582198/hallenstein-glasson-reports-profit-drop

Interesting to read the comments. Not all clear sky for Glassons.

[winner69]

http://www.stuff.co.nz/business/84582198/hallenstein-glasson-reports-profit-drop

Interesting to read the comments. Not all clear sky for Glassons.

Yes interesting, but I'm sure Glassons market research already told them this and they have already acted to try to 'find their way' again - if they were ever lost?

What did the story say - this years sales up 19% with improved margins. Whatever Di is doing appears to be working.

Whether what they sell is hopeless, outdated, unfashionable or whatever it can be too bad as they sell $84m odd of the stuff a year - not that much different from those per-2010 glory days mentioned in the article.

The comments under most articles in these news sites aren't really much different from many ST threads - give punters a chance and all the anti / negative (careful with my words here) stuff comes out. Human nature I suppose

[Raz]

Let's see if this share goes like AIR ST thread over time, possibly a little more run up before reality strikes. I don't care how much they sell unless they make a decent Buck. It's great to have such a lag between reality and sentiment. Still holding however always watching closely, even from afar in NYC.

[winner69]

Let's see if this share goes like AIR ST thread over time, possibly a little more run up before reality strikes. I don't care how much they sell unless they make a decent Buck. It's great to have such a lag between reality and sentiment. Still holding however always watching closely, even from afar in NYC.

They going to make a decent buck this coming year Raz - enough to pay a 33 cent dividend (cF16 was 30 cents). Expected cash flows will support that level dividend and it's only what they were paying out a few years ago.

What price punters pay for this - 4 bucks seem reasonable. And for thosewho likes to value on PE ratios that is a PE of less than 12

Geez with you, see weed and Paper Tiger on the register we must be on a winner. And best of all percy has joined us and everything he buys goes up - on average 48% so look out $4.50 plus.

But watch that squiggly line on the chart - just in case

[winner69]

Always admired HLG's inventory / margin management over the years - the key to their success in consistently generating strong cash flows

Four retailers reported last week - from my little database of stuff the table below highlights how good HLG are in this respect, and far superior to Kathmandu

HLG generate $6.36 Gross Margin from every $ of stock - KMD only $2.55

HLG has a Turn/Earn Ratio of 2.7 (very good) compared to KMD's 1.0. This is saying that HLG make 56.6% GM when they sell their stock and they do that 4.8 times a year (stock turns) - whereas KMD have a better margin at 62.6% but they only turn over their stock 1.7 times a year. Easy to see whose the most efficient / productive and has a much superior return on their investment in stock.

On all these measures HLG is by far the best

Just thought you would be interested

[forest]

Very nice comparison of NZ retail, thanks for this Winner.

[Leftfield]

HLG has a Turn/Earn Ratio of 2.7 (very good) compared to KMD's 1.0. This is saying that HLG make 56.6% GM when they sell their stock and they do that 4.8 times a year (stock turns) - whereas KMD have a better margin at 62.6% but they only turn over their stock 1.7 times a year. Easy to see whose the most efficient / productive and has a much superior return on their investment in stock.

On all these measures HLG is by far the best

Just thought you would be interested

Good Post Winner - thanks

[winner69]

Graeme Popplewell the CEO said to the NBR that the F16 result was at “absolute bottom of the barrel” and that profit figures should increase in coming years.

My first rough cut forecast for F17 is assuming 5% sales growth, 2% points better margin and expenses up 2% which gives NPaT just over $20m


EPS 34 cents - merits a share price of ? -- where ? > $3.16 I reckon

[stoploss]

Graeme Popplewell the CEO said to the NBR that the F16 result was at “absolute bottom of the barrel” and that profit figures should increase in coming years.

My first rough cut forecast for F17 is assuming 5% sales growth, 2% points better margin and expenses up 2% which gives NPaT just over $20m


EPS 34 cents - merits a share price of ? -- where ? > $3.16 I reckon
must be a fair chance the sales don't pick up . A lot of competition with new labels coming into NZ , Zara opening soon , DJ in Wellington . Going to be a lot harder to attract the average punters cash .
Difficult industry , rents rising all round town as well.

[winner69]

must be a fair chance the sales don't pick up . A lot of competition with new labels coming into NZ , Zara opening soon , DJ in Wellington . Going to be a lot harder to attract the average punters cash .
Difficult industry , rents rising all round town as well.


H&M opening AKL this weekend

HLG probably put up the white flag and say it's just too hard and close down you reckon stoploss?

[Ghost Monkey]

Nah, you'll be right Winner. Buying in at $2.70's or thereabouts was a smart move and that is reflected in their current price. And you'll be continuing to smile over the coming year.

But not too sure if I would want to hold these long term.

You read that article in the Economist a couple months ago on retail stores in the UK? Granted, different country, different situation, but if a similar situation develops here, and with these new brands arriving its certainly a possibility, though it won't happen overnight, you won't want to be holding Hallensteins.

But short term looks very good.

[Jantar]

must be a fair chance the sales don't pick up . A lot of competition with new labels coming into NZ , Zara opening soon , DJ in Wellington . Going to be a lot harder to attract the average punters cash .
Difficult industry , rents rising all round town as well. Zara? DJ? ..... Never heard of them. Do they offer a better quality product at the same price? Do they offer a better quality at a higher price? Are they like the the Warehouse, cheaper, but providing rubbish? Or do they compete directly on quality and price?

If it is the latter and they will compete directly on quality and price, are they going to instantly appear all around the country including the smaller towns where HLG have a presence?

So many factors that may or may not affect HLG that suggest we shouldn't be too worried.

[James108]

Zara? DJ? ..... Never heard of them. Do they offer a better quality product at the same price? Do they offer a better quality at a higher price? Are they like the the Warehouse, cheaper, but providing rubbish? Or do they compete directly on quality and price?

If it is the latter and they will compete directly on quality and price, are they going to instantly appear all around the country including the smaller towns where HLG have a presence?

So many factors that may or may not affect HLG that suggest we shouldn't be too worried.

If you have never heard of Zara I don't think you should be investing in hlg

[Ghost Monkey]

Not heard of Zara?!?

One of the biggest clothing chains in the world!!!! Wildly popular with the young.

Huge threat to Hallensteins. But then its only one store in NZ so far. Not sure how online sales will compete.

[Jantar]

If you have never heard of Zara I don't think you should be investing in hlg
Oh? And why is that?

I've just done on search on the word "Zara" in HLG's annual report, and it looks like they haven't mentioned them as a threat, or in any other context either.

[Ghost Monkey]

Zara is a part of Inditex group. The largest apparel clothing retailer in the world.

The didn't become the biggest by selling over-priced crappy clothes.

[Ghost Monkey]

Put another way.

Goliath just waded through the seas and stepped ashore in NZ.

So what is David gonna do???

Your money, your bet.

[James108]

Having said that I still think there is value in HLG at current price and continue to hold (bought in at 3.07).

Also Jantars response illustrates the brand power that glassons/hallensteins have over Zara in NZ at the moment.

[mikeybycrikey]

Oh? And why is that?

I've just done on search on the word "Zara" in HLG's annual report, and it looks like they haven't mentioned them as a threat, or in any other context either.

Do annual reports usually call out competitors (and potential competitors) by name? I thought that was usually left as an exercise for the reader.

Zara, H&M and Top Shop are pretty serious threats to HLG. Interesting that they all seem to be coming here at a similar time. Only Auckland for now but that's a pretty significant part of the country.

And maybe physical stores don't matter as much as a decent online presence nowadays.

[sb9]

Zara is a part of Inditex group. The largest apparel clothing retailer in the world.

The didn't become the biggest by selling over-priced crappy clothes.

One more point to note its Spanish owner has recently overtaken Bill Gates as the richest man in world...

Disc: No HLG for me though

[Jantar]

Zara, H&M and Top Shop are pretty serious threats to HLG. Interesting that they all seem to be coming here at a similar time. Only Auckland for now but that's a pretty significant part of the country. ....
OK. Down here in Alexandra there are 3 stores where I can buy clothes. The Warehouse for rubbish, Hallensteins for reasonable quality and price, and where I normally shop, and a single high price store where the quality is not much difference to HLG. So I guess if these other brands are going into Auckland they may have an effect on that market.

How many clothing stores are there in Auckland, and what percentage of them are HLG? After these other brands come in what will HLG's percentage drop to? maybe they will have an effect, but probably not a large enough effect to be worried about.

Incidentally, as far as I am aware, clothing is one thing that doesn't normally sell as well online as other products. People want to try things on and see what they look like.

[see weed]

OK. Down here in Alexandra there are 3 stores where I can buy clothes. The Warehouse for rubbish, Hallensteins for reasonable quality and price, and where I normally shop, and a single high price store where the quality is not much difference to HLG. So I guess if these other brands are going into Auckland they may have an effect on that market.

How many clothing stores are there in Auckland, and what percentage of them are HLG? After these other brands come in what will HLG's percentage drop to? maybe they will have an effect, but probably not a large enough effect to be worried about.

Incidentally, as far as I am aware, clothing is one thing that doesn't normally sell as well online as other products. People want to try things on and see what they look like.
I heard a while back, customers went to shop to try clothes on and then went home and bought them online at a cheaper price. Does HLG have online shopping?

[stoploss]

OK. Down here in Alexandra there are 3 stores where I can buy clothes. The Warehouse for rubbish, Hallensteins for reasonable quality and price, and where I normally shop, and a single high price store where the quality is not much difference to HLG. So I guess if these other brands are going into Auckland they may have an effect on that market.

How many clothing stores are there in Auckland, and what percentage of them are HLG? After these other brands come in what will HLG's percentage drop to? maybe they will have an effect, but probably not a large enough effect to be worried about.

Incidentally, as far as I am aware, clothing is one thing that doesn't normally sell as well online as other products. People want to try things on and see what they look like.

Hi Janter, looks like a few people have pointed out how big Zara is . DJ, Is David Jones and I would think with the buying power they could purchase stock at better terms than HLG . All very well saying all this competition won't hurt , but that's what they said about AIR.NZ .
If you think online shopping isn't a big thing maybe do some research on ASOS.
If the squeeze goes on HLG how long you think they will stay in Alex ? The banks clear 100's of millions a year ..make that billions and they see fit to pull the pin on small-town NZ .

BRANDS INCLUDE:
Australian and New Zealand designers:
Camilla, Camilla and Marc, Manning Cartell, Ginger & Smart, Lover, Kate Sylvester, Sabatini, Trelise Cooper, Twenty Seven Names and Karen Walker
Womenswear:
Jac + Jack, Bassike, Bec & Bridge, Viktoria + Woods, C&M, Tigerlily, Shona Joy, The Upside, C/MEO Collective, Mink Pink, Saba, Anthea Crawford, Studio W and Simone Perele

Menswear:
Polo Ralph Lauren, Tommy Hilfiger, Anthony Squire, Boston, Abelard, Helly Hansen and Hardy Amies
Footwear and Accessories:
Saint Laurent, Valentino, Balenciaga, Alexander McQueen, Chloe, Monica Vinader, Samantha Wills, Wittner and Mimco

[Turtle2]

I heard a while back, customers went to shop to try clothes on and then went home and bought them online at a cheaper price. Does HLG have online shopping?

I use hallensteins online shopping quite a bit. A very good service - and they usually send a chocolate with every purchase.

[percy]

I heard a while back, customers went to shop to try clothes on and then went home and bought them online at a cheaper price. Does HLG have online shopping?
It is called show-rooming.Often people do not even leave a store to order online.!!
Last year HLG online sales were up 24% to achieve 7% of total sales.
So far [1st 6 weeks of current year] they are up 26% on last year.

[Snow Leopard]

I see what people on both sides of the discussion are getting at.

I doubt if the opening of H&M in Auckland on Saturday will see much of a reduction in sales for Hallenstein, Glassons and any other bits of empire. (You can point at the Herald article at the weekend mentioning people queuing down the street to get in at opening if you like).

As other trendy new entrants arrive and expand then yes it may lead to a decline in revenues for HLG. But I am going to go out on a limb here and suggest that they will prosper for a few years. They have survived so far and things do not look dire yet.

Of more importance to their profitability is such things as exchange rates, staying fresh, and having the ability to adapt.

So after a poor year last year and a reasonable entry price then this is probably, hopefully, unexciting source of profits, capital gain and dividends. An investment.

Best Wishes
Paper Tiger

Disc: Generally buy my everyday clothing on the annual Indonesia trip and my technical clothing on my annual UK trip. New sandals where ever the old ones break.

[winner69]

I see what people on both sides of the discussion are getting at.

I doubt if the opening of H&M in Auckland on Saturday will see much of a reduction in sales for Hallenstein, Glassons and any other bits of empire. (You can point at the Herald article at the weekend mentioning people queuing down the street to get in at opening if you like).

As other trendy new entrants arrive and expand then yes it may lead to a decline in revenues for HLG. But I am going to go out on a limb here and suggest that they will prosper for a few years. They have survived so far and things do not look dire yet.

Of more importance to their profitability is such things as exchange rates,staying fresh, and having the ability to adapt.

So after a poor year last year and a reasonable entry price then this is probably, hopefully, unexciting source of profits, capital gain and dividends. An investment.

Best Wishes
Paper Tiger

Disc: Generally buy my everyday clothing on the annual Indonesia trip and my technical clothing on my annual UK trip. New sandals where ever the old ones break.

They been around for 143 years - probably seen plenty of change in that time .....and adapted and stayed fresh

[stoploss]

Zara? DJ? ..... Never heard of them. Do they offer a better quality product at the same price? Do they offer a better quality at a higher price? Are they like the the Warehouse, cheaper, but providing rubbish? Or do they compete directly on quality and price?

If it is the latter and they will compete directly on quality and price, are they going to instantly appear all around the country including the smaller towns where HLG have a presence?

So many factors that may or may not affect HLG that suggest we shouldn't be too worried.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11719115

[Raz]

I see what people on both sides of the discussion are getting at.

I doubt if the opening of H&M in Auckland on Saturday will see much of a reduction in sales for Hallenstein, Glassons and any other bits of empire. (You can point at the Herald article at the weekend mentioning people queuing down the street to get in at opening if you like).

As other trendy new entrants arrive and expand then yes it may lead to a decline in revenues for HLG. But I am going to go out on a limb here and suggest that they will prosper for a few years. They have survived so far and things do not look dire yet.

Of more importance to their profitability is such things as exchange rates, staying fresh, and having the ability to adapt.

So after a poor year last year and a reasonable entry price then this is probably, hopefully, unexciting source of profits, capital gain and dividends. An investment.

Best Wishes
Paper Tiger

Disc: Generally buy my everyday clothing on the annual Indonesia trip and my technical clothing on my annual UK trip. New sandals where ever the old ones break.

That sums it up for me, reasonable lag before any real effect. Interesting to note when in NYC last week went with daughter shopping... Zara and H & M were not on the to do list...the "in" places have not even been mentioned in this country yet....very fragmented market. A lot of people want something relatively unique that they do not bump into three times in a night when going out.

[Rep]

Two of the largest clothing retailers in the world arrive on our shores and a number of folk immediately write them off without seeing the execution, pricing and range.

If I owned HLG shares I would be interested in at least wandering through a store once the initial hype has passed perhaps in January to actually see what the effect is before simply or naively saying 143 years of local experience will hold onto all the share.

Lots of people make the mistake of not investing in say RBD because they don't understand why anyone wants to eat KFC, or wondering why people mess about using streaming services rather reliable and easy SKY decoder for their viewing needs - mainly assuming that their personal experience is representative of the population.

Personally I don't pretend to have a good crystal ball but these two retailers didn't become #1 and #2 worldwide by being useless.

[macduffy]

Fair comment, Rep. I don't know about the Glassons side of the business but I'd be surprised if the Hallensteins menswear stores were impacted by any number of smart, fashionable newcomers. Different customer segments, I would think.

Disc: Don't hold HLG but sometimes think I should.

[Jantar]

Two of the largest clothing retailers in the world arrive on our shores and a number of folk immediately write them off without seeing the execution, pricing and range.
........
I don't believe anyone is writing them off, just putting them in perspective. Try looking at the potential overall effect.

How many clothing stores are there currently in NZ?
How many of those are owned by HLG?
What is HLG's percentage of ALL clothing sold in NZ?
How many new clothing stores are opening in NZ?
What is HLG's new percentage?

How much will HLG's percentage drop?

I would be very surprised to see much of a drop at all unless these newcomers are aiming to match HLG's market penetration.

[Rep]

Fair comment, Rep. I don't know about the Glassons side of the business but I'd be surprised if the Hallensteins menswear stores were impacted by any number of smart, fashionable newcomers. Different customer segments, I would think.

Disc: Don't hold HLG but sometimes think I should.

Well having looked at the pricing of the smart fashionable newcomers and their modus operandi of discounting at same time, it could change pricing perception of garments. H&M and Zara sell good looking clothing but at a price point esp at sale that almost makes it disposable.

Top Shop in most markets does as well but given in NZ that it is operated by Barkers and the licence is owned by Karen Walker, Barkers and another investor - they aren't really going to want to rock the price boat.

Moving the goal posts on price in their segment could impact Barkers, HLG and other retailers.

Price perception is a weird thing but if you said you to someone you could buy a colour TV for a day's pay in the 1970s you'd have been locked up for insanity or telling someone 20 years ago that not only was your mobile phone not free with your plan but cost $1299 they have checked your head...

PS Roger will appreciate this:
In 1975, Statistics NZ reports that a 26 inch colour TV cost about $840 which is the equivalent in today's dollars of $7,950...In 2006, a 32-inch LCD-display TV cost about $2,750. By comparison, the same size TV in the September 2012 quarter would have cost about $680.

[JeremyALD]

I'd argue that hallensteins already selling their prices ridiculously cheap. Where else can you buy a men's suit for $199? How much lower can it go really? The margin is already slim. I can't see any major margin pressure from H&M and Zara nationally until they start to expand. I do think the Sylvia Park stores will struggle, but it gives hallensteins sometime to adjust their approach if they need to. We'll be in for a good couple of years for hallensteins. I have a question mark over the long term, e.g. 5 years but it is a well run business so I think things look pretty positive.

[boysy]

Not just Sylvia park it would appear

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11723055

[winner69]

Not just Sylvia park it would appear

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11723055

Top Shop store in Wellington nearly completed by a sneak look through the boards


Yes H&M in Wellington next ......Palmerston North watch out, you're next

[mikeybycrikey]

Not just Sylvia park it would appear

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11723055

Wow, I can really see how these "experts" earn their money. International chains expected to expand, they say. Such insight!

[Raz]

Top Shop store in Wellington nearly completed by a sneak look through the boards


Yes H&M in Wellington next ......Palmerston North watch out, you're next

In Wellington for WOW at the weekend...David Jones was doing great trade..surprised on the small shop footprint thou...yes looks like a decent sized Top Shop.

[boysy]

Wow, I can really see how these "experts" earn their money. International chains expected to expand, they say. Such insight!

It would appear as though some holders thought these international chains would not expand which clearly they are.

[Raz]

It would appear as though some holders thought these international chains would not expand which clearly they are.

It been well know they are coming to Christchurch for over 12 months, just waiting on the buildings to be completed....

[Regi]

I agree with a few people here but bottom line is, you're delusional if you think H&M and Zara are;
1: Going to stay put in sylvia park
2: Not going to affect HLG

Zara is fast fashion and will be updating their in store stock I think twice a week I read somewhere. They are one of the top retailers at adjusting and listening to their customers. Something doesn't sell? You won't see it sitting there for long. Their capabilities and efficiency is something that HLG can simply not compete with and I really don't think HLG has that sort of brand that attracts loyalty or screams style like Zara does. New Zealander's are naturally going to be super excited and 'proud' to shop at these European fashion giants much like Chinese seeing Western Brands as aspirational.

H&M is ridiculously cheap. With far more selection and at better prices... I don't know why people would shop at HLG. Sure it's only in Sylvia Park at the moment which is the only way you can downplay immediate effects but this is not going to be a one off and definitely not a stock I would want to be holding.

Ofcourse these two aren't going to rob HLG of all sales but as they expand there is no reason you would prefer to shop at HLG over Zara or H&M. They beat HLG in style, brand, experience (both customer and business) AND price. I know Glassons for example at my local mall St Lukes had a pretty nice upgrade to its store as have many others and speaking with the manager there it was literally in response to Zara and H&M coming. If you go there you will notice it's a much more European feel rather than the sad wall racked cloth retailers Kiwi's are used to. So I've been able to physically see HLG responding, I hope for investor sakes they have also been preparing the side of the business that we can't see because don't kid yourselves that it will remain unaffected.

I spend a lot of time in Europe and these are two far superior chains to HLG. Of course, my opinion... but I think it would be foolish to think that consumers will not share my opinion and instead imagine they have some unwavering loyalty to HLG and the idea their "excellent" management will be able to steal back lost customers. I would have hoped it would be common sense but some people seem to think this will just blow over and everyone will live in harmony so I wrote this more for an outside reader who may be swayed by false hope.

All this is my opinion, DYOR.

[BlackPeter]

I agree with a few people here but bottom line is, you're delusional if you think H&M and Zara are;
1: Going to stay put in sylvia park
2: Not going to affect HLG

Zara is fast fashion and will be updating their in store stock I think twice a week I read somewhere. They are one of the top retailers at adjusting and listening to their customers. Something doesn't sell? You won't see it sitting there for long. Their capabilities and efficiency is something that HLG can simply not compete with and I really don't think HLG has that sort of brand that attracts loyalty or screams style like Zara does. New Zealander's are naturally going to be super excited and 'proud' to shop at these European fashion giants much like Chinese seeing Western Brands as aspirational.

H&M is ridiculously cheap. With far more selection and at better prices... I don't know why people would shop at HLG. Sure it's only in Sylvia Park at the moment which is the only way you can downplay immediate effects but this is not going to be a one off and definitely not a stock I would want to be holding.

Ofcourse these two aren't going to rob HLG of all sales but as they expand there is no reason you would prefer to shop at HLG over Zara or H&M. They beat HLG in style, brand, experience (both customer and business) AND price. I know Glassons for example at my local mall St Lukes had a pretty nice upgrade to its store as have many others and speaking with the manager there it was literally in response to Zara and H&M coming. If you go there you will notice it's a much more European feel rather than the sad wall racked cloth retailers Kiwi's are used to. So I've been able to physically see HLG responding, I hope for investor sakes they have also been preparing the side of the business that we can't see because don't kid yourselves that it will remain unaffected.

I spend a lot of time in Europe and these are two far superior chains to HLG. Of course, my opinion... but I think it would be foolish to think that consumers will not share my opinion and instead imagine they have some unwavering loyalty to HLG and the idea their "excellent" management will be able to steal back lost customers. I would have hoped it would be common sense but some people seem to think this will just blow over and everyone will live in harmony so I wrote this more for an outside reader who may be swayed by false hope.

All this is my opinion, DYOR.

No question there will be an impact ... I guess NZ retail shops are decades behind the rest of the world - compare product price and quality anywhere in the US, or any hub in Asia or in Europe with the stuff they sell here, and it is immediately clear why NZ retailers lose that much business to international internet shopping.

So - yes, it will have an impact (good!), it will be great for consumers (good!), it is likely to reduce the internet shopping (why pay lots of money for P&P if you can get the good stuff at a reasonable price as well in NZ - good!) and it might help NZ retailers like HLG to improve their standards (good, if it does). Nothing more helpful than a bit of competition as wake up call.

I guess we will see, whether they manage to survive the challenge, but I am optimistic. Given that we Kiwis are normally so proud of our No 8 mentality ... now that some international retailers are waking us up from our "low fashion - high price" sleep ... lets get up and fight back.

I think this could be the opportunity for NZ business to improve - and grow the retail pie. Maybe we could even turn into a shopping destination - instead of selling tourists for decades the same models of lamb-wool jerseys. My mother visited us here regularly every 2 or 3 years and noticed that they had on her last visit here (15 years on) still the same models in the tourist shops they had at her first visit ... OK - this is not HLG, but they are not much better ...

Don't see this as the end for HLG - and even as an opportunity to improve their business, if they are worth their money. If not - well, than it might be time to find another home for the dollars invested in HLG ... but I don't think there is any rush - just watch how these years X-Mas sales are going ... I certainly will.

Discl: hold (a small parcel);

[Jaa]

it is likely to reduce the internet shopping (why pay lots of money for P&P if you can get the good stuff at a reasonable price as well in NZ - good!)

Your dreaming. Zara and H&M will use flagship stores in Auckland, Wellington and Christchurch to establish their presence and then use their internet sites with free shipping to target the rest of NZ. Uniqlo and Forever 21 will follow suit.

[Subway]

No question there will be an impact ... I guess NZ retail shops are decades behind the rest of the world - compare product price and quality anywhere in the US, or any hub in Asia or in Europe with the stuff they sell here, and it is immediately clear why NZ retailers lose that much business to international internet shopping.

So - yes, it will have an impact (good!), it will be great for consumers (good!), it is likely to reduce the internet shopping (why pay lots of money for P&P if you can get the good stuff at a reasonable price as well in NZ - good!) and it might help NZ retailers like HLG to improve their standards (good, if it does). Nothing more helpful than a bit of competition as wake up call.

I guess we will see, whether they manage to survive the challenge, but I am optimistic. Given that we Kiwis are normally so proud of our No 8 mentality ... now that some international retailers are waking us up from our "low fashion - high price" sleep ... lets get up and fight back.

I think this could be the opportunity for NZ business to improve - and grow the retail pie. Maybe we could even turn into a shopping destination - instead of selling tourists for decades the same models of lamb-wool jerseys. My mother visited us here regularly every 2 or 3 years and noticed that they had on her last visit here (15 years on) still the same models in the tourist shops they had at her first visit ... OK - this is not HLG, but they are not much better ...

Don't see this as the end for HLG - and even as an opportunity to improve their business, if they are worth their money. If not - well, than it might be time to find another home for the dollars invested in HLG ... but I don't think there is any rush - just watch how these years X-Mas sales are going ... I certainly will.

Discl: hold (a small parcel);

Regi is right on the money, when I was in NZ I never shopped at Hallensteins, I found the quality lacking and pricey for basic staples, now im based in Europe I regularly shop at Zara/Uniqlo and i'm going out on a limb here but I see zero future in Hallensteins, they will simply fade away. Barkers will probably take up some of that market share, I can't speak for Glassons, although I fear it will suffer the same fate.

[BlackPeter]

Your dreaming. Zara and H&M will use flagship stores in Auckland, Wellington and Christchurch to establish their presence and then use their internet sites with free shipping to target the rest of NZ. Uniqlo and Forever 21 will follow suit.

Dreaming? - hardly ... I can state here in affirmative that I never ever dreamt about internet shopping;).

However - what I meant (and should have said) is "international internet shopping". I agree that national Internet shopping is likely to grow, though I think that the internet market for cloths and garment has a natural limit. Many people just prefer to try the stuff before they buy.

[BlackPeter]

Regi is right on the money, when I was in NZ I never shopped at Hallensteins, I found the quality lacking and pricey for basic staples, now im based in Europe I regularly shop at Zara/Uniqlo and i'm going out on a limb here but I see zero future in Hallensteins, they will simply fade away. Barkers will probably take up some of that market share, I can't speak for Glassons, although I fear it will suffer the same fate.

Looks like we vehemently agree on the current state of retail in NZ.

However ... looks like Hallenstein did over the last 130 odd years quite well without your custom (and admittedly only the occasional rare visit from myself). I learned some time ago that I might miss out on great opportunities if I only invest into companies who's products (or services) I like - other customers might just have a different view. There are a number of companies making nice money without the benefit of my (or your) custom.

In my case I could e.g. think about RBD, WHS, CEN, FBU, SPK, SKY to name just a few companies I try to avoid as a customer (not always successful I must admit), but they still often make nice money.

Not liking their products or service is no reason not to invest in them, if they are successful and find enough other customers who do like them ...

Note (1): I didn't say that Hallenstein will be successful, but I think they have a fighting chance.

Note(2): I didn't say that above companies are at current in my view a good investment - some are, some are not.

Discl: hold WHS and HLG and used to hold at some stage most of the other shares I mentioned.

[percy]

Just the thoughts from some one who has been around retail far too long.
Activity breeds activity.
Original low cost stores in NZ were McKenzies and Woolworths.Their stores were always just a few doors from each other,as were department stores.Why? Activity breeds activity.
In Malls that added a Whitcoulls,the existing bookshop's sales increased.Why? Activity breeds activity.
Today in Malls they have food courts.McDonalds,Muffin Break etc are always welcome.Why? Activity breeds activity.
Again today Malls put all the fashion retailers together.Why? Activity breeds activity.
I would therefore would think retailers such as HLG would welcome new retailers.Why ? Activity breeds activity,which is good for all neighbouring retailers.
I should also point out good retailers such as HLG know within a day or two whether a new line/range is a winner or not,and act accordingly,either ordering more or altering pricing.
So I would not be at all surprised if the next update from HLG is a cracker.
As always I remain "well positioned".

[winner69]

Just the thoughts from some one who has been around retail far too long.
Activity breeds activity.
Original low cost stores in NZ were McKenzies and Woolworths.Their stores were always just a few doors from each other,as were department stores.Why? Activity breeds activity.
In Malls that added a Whitcoulls,the existing bookshop's sales increased.Why? Activity breeds activity.
Today in Malls they have food courts.McDonalds,Muffin Break etc are always welcome.Why? Activity breeds activity.
Again today Malls put all the fashion retailers together.Why? Activity breeds activity.
I would therefore would think retailers such as HLG would welcome new retailers.Why ? Activity breeds activity,which is good for all neighbouring retailers.
I should also point out good retailers such as HLG know within a day or two whether a new line/range is a winner or not,and act accordingly,either ordering more or altering pricing.
So I would not be at all surprised if the next update from HLG is a cracker.
As always I remain "well positioned".

Good post mate - from an old wise head

Activity breeds activity = the pie gets bigger (as hopefully your share of that pie is bigger as well)

but remember percy the world is changing and the young uns think differently from us and always know best. So we need to take care in case this time they are actually right

[boysy]

But the people that used to shop at HGL now have greater choice why would they shop at HGL when they have cheaper more fashionable alternatives at the likes of top shop H&M and Zara .This is the crux of the issue HGL cannot be everything to everyone going forward which is what they have successfully done up until now. I maintain they will struggle on an number of fronts including but not limited to price, product quality, product desirability, retaining existing shoppers in the face of the above.

[Beagle]

Wasn't going to bother barking again but seeing as its such an interesting debate...

143 years is a long time in business.
They would have adapted and changed their business model dozens of times over that lengthy course.
Jantar makes some very good points about the relative market penetration of HLG vs the newcomers.
Percy makes some very good points about competition growing the overall size of the pie, (you can see that now with Jetstar with heaps more people overall flying
I think most people simply buy their clothes at their local mall, less people are fashion hounds than many might think on here and want convenient shopping from a local handy retailer.
Raz makes some good points about other things being more pertinent like exchange rates
Those with a negative view are perfectly entitled to their opinion but I think the overall impact will be minimal for at least the next few years and the 30 cps fully imputed dividend is safe for the foreseeable future.
People might like to reflect on the extremely favourable outlook comments issued at the time of the recent annual results and decide the facts for themselves.
My 2 cents worth...back to my kennel now.

[huxley]

“Everybody makin’ money sharing the real estate.”

Stringer Bell

[see weed]

Welcome back Roger...Bring back ROGER....About time you got outa hibernation. Miss your postings:t_up:.

[winner69]

Retail landscape on Lambton Quay changed over the years - especially last 10 years or so as those awesome Aussie outfits set up shop over here. Going to take the market over they said

Walking down Lambton Quay these days not much different than say Melbourne

Yet Glassons and Hallensteins still seem to be doing OK - and not looking out of place,

[BlackPeter]

...

Discl: hold WHS and HLG and used to hold at some stage most of the other shares I mentioned.

Slightly embarrassed ... while the above disclosure is technically correct (I am at the time of writing still registered owner of HLG shares) did I just find out that the price drop yesterday triggered one of my "retain gain stops" (just prefer small gains over large losses :)). I.e. I sold my (smallish) HLG parcel and am now likely to wait for the excitement to settle before I go in again ...

Does not change my feelings for HLG ...

[winner69]

Fashion retailing is different from hardware but 15 years ago Bunnings arrived in NZ with heir big boxes and were going to destroy the likes of Mitre 10.

Some 15 years on Mitre 10 is still #1 and Bunnings are still quite a long way behind. They've spent many hundreds of millions in their expansion and still make stuff all profit (abysmal operating ratios to what they achieve in Australia)

Apparently operating in NZ is more difficult than they imagined ....and they under estimated how hard the locally owned/operated Mitre 10 would fight back and in some respects do better job with their big box expansion.

The giant Australian behemoth hasn't won and is still learning .....after 15 years

[winner69]

I know there's a difference between fashion and groceries but retailing fundamentals apply to both industies

I remember not that long ago the bemeoth of Australia retailing Woolworths took over Progressive in NZ and proclaimed they were going to kick Foodstuff's arse

Years later progressive market share is less than what it was .....and Foodstuffs share is up

Another example of foreigners thinking they know the ins and outs of the NZ market so much better than local operators who have a personal stake in the game

Just saying - H&M et al may be a success story in NZ ...onlybtime will tell

[Jantar]

But the people that used to shop at HGL now have greater choice why would they shop at HGL when they have cheaper more fashionable alternatives at the likes of top shop H&M and Zara ........
But for many of us that choice just doesn't exist. Maybe at a single mall in Auckland. Even expanding to a single mall each in Wellington, Christchurch and Dunedin. But do you think I am going to spend a hundred dollars on fuel and make a 6 hour round trip to save $10 on a shirt?

When these new brands decide to saturate the country to the extent that HLG have then I may believe they are serious competition. Meanwhile they are no more than another option for visitors to the particular mall where they are planning to be.

[boysy]

Would be interesting to understand what proportion of sales are in areas that you mention have limited competition. My bet the bulk of the revenue is coming through sales in major centres but I could be wrong ?