HLG - Hallenstein Glasson

[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/new...ectid=11723055

[winner69]

Not just Sylvia park it would appear

http://m.nzherald.co.nz/business/new...ectid=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/new...ectid=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.