HLG - Hallenstein Glasson

[boysy]

Just got back from sylvia park hard to believe but still hundreds waiting outside H&M to get let in when sufficient people left the shop (not sure how many were inside but would of been well over 100 and this was at mid day). Equally as crazy was Zara (would estimate well over 200 people in the store - it has a bigger footprint than H&M it must be noted) however most of the other retailers had handful of people in them (counted 6 in Glassons, and 3 in HLG, Just Jeans and country road were just as bad). This being said sylvia park was the busiest i have seen it outside of the boxing day sales so no doubt the hype will die down but more people at the mall doesn't equate to more people browsing based on todays evidence (walking around sylvia park from 12-2pm).

[Arbroath]

Lower the divi, shore up the balance sheet, focus on the higher margin offerings ie stop trying to flog off $10 tee shirts no one wants. I maintain HLG cannot be everthing to everyone whereas the likes of large multinationals can. Picking the low hanging fruit is long gone in this sector and the clear casualties will be the just jeans, HLG, pumpkin patch and T&Ts of this world. HLG has faired better than the others due to managements ability no doubt about that but i really struggle to see how HLG will grow revenue and retain margins in the current environment.

Back to the vote - who shops at HLG and would they continue to do so if they had the option at shopping at one of the large multinationals ?

Boysy you might struggle to see it but HLG are doing it. Managements recent announcement said sales were up 9% ytd across the group and margin is stronger due to Fx hedges rolling off and NZDUSD being back over 70c the past few months. Another major factor is the rejuvenation of Glassons. They've lifted there game markedly when you compare the old v new stores and fresher stock lines.

There have been many good points raised on both sides of the debate about HLG but I'm still cautiously optimistic. The big chains will be very unlikely to go outside Akld, Wgtn, Chch at best. HLG have stores all over the country. The next 12 months will be interesting but my model sees npat of $17-18m on sales up c 5% over the full year. Much can puncture this - weather, FX, new competition etc. on the competition issue I'd be more concerned if someone like Target decided to open an Auckland store.

[Snow Leopard]

There seems a clear division in thought between older and younger posters here...

One of the advantages of being older is that you were once younger and have the great benefit of experience.

When one is younger you think you know it all but once you mature you realise that that was not in fact the case because now you know you know it all.

...
Dato Tiger, in the large tropical island where I reside, Uniqlo often has massive displays of jackets and jerseys perfect for the Japanese or NZ market and hopelessly inappropriate for the tropics. So it is true HLG will always have something of a local advantage. Though H&M on the other hand is near unbeatable on price, environmental consciousness and style/practicality.

And the fascinating thing about all those jackets and jerseys is that they sell. They are bought by those who are off to cooler climates.
I for instance bought a jacket and socks on my way out of Kuala Lumpur when bound for Kyoto last December and they stand a reasonable chance of selling me some more cold climate stuff this December as I leave for India.

Also you need polar fleeces, mittens, a good woolly hat and a good pair of winter sandals if you are going to the cinema in KL.

Best Wishes
Paper Tiger

[Beagle]

Boysy you might struggle to see it but HLG are doing it. Managements recent announcement said sales were up 9% ytd across the group and margin is stronger due to Fx hedges rolling off and NZDUSD being back over 70c the past few months. Another major factor is the rejuvenation of Glassons. They've lifted there game markedly when you compare the old v new stores and fresher stock lines.

There have been many good points raised on both sides of the debate about HLG but I'm still cautiously optimistic. The big chains will be very unlikely to go outside Akld, Wgtn, Chch at best. HLG have stores all over the country. The next 12 months will be interesting but my model sees npat of $17-18m on sales up c 5% over the full year. Much can puncture this - weather, FX, new competition etc. on the competition issue I'd be more concerned if someone like Target decided to open an Auckland store.

Excellent post with which I agree 100%.

[Jantar]

Just got back from sylvia park hard to believe but still hundreds waiting outside H&M to get let in when sufficient people left the shop (not sure how many were inside but would of been well over 100 and this was at mid day). Equally as crazy was Zara (would estimate well over 200 people in the store - it has a bigger footprint than H&M it must be noted) however most of the other retailers had handful of people in them (counted 6 in Glassons, and 3 in HLG, Just Jeans and country road were just as bad). .....

I was in Dunedin yesterday and decided to buy a few things prior to my forthcoming trip to Brisbane. Hallenstiens were my first choice, and for a sunday they were quite busy. I purchased a couple of items there, but they didn't have everything I wanted and I wasn't paying their inflated price for underwear. Next door were Glassons and I noticed quite a few shoppers in there as well. I ended up going to 4 different menswear shops, and HLG were the busiest on the day.

[Onion]

Also you need polar fleeces, mittens, a good woolly hat and a good pair of winter sandals if you are going to the cinema in KL

I was just thinking that I should pack my winter sandals away and find summer ones more suitable to the Wellington climate.

[BlackPeter]

For what it is worth ... we are just passing the golden cross - and markets appear to be bullish on retail.

Obviously - retail is a difficult sector, but I'd think it is at least in the short term (until after Christmas) more likely to rise than to drop.

Discl: don't hold HLG, but some other retail stock;

[Beagle]

Wettest spring in Auckland I can ever remember which must have been good for clearing out remaining winter stock. I'd imagine if the sun ever starts shining on a regular basis again people will be out buying a fresh spring / summer outfit or two. Lowest interest rates ever and modest fuel prices leave plenty of spare cash in people's pockets. HLG sounded very positive about their outlook at the recent annual result and I am expecting a very positive profit outlook at their December annual meeting.

[winner69]

Stats NZ Electronic Card Spend for September

Apparel up 5.5% on Sept last year

[Regi]

I've been to H&M and Zara twice in the past few days and thought I'd write about it. (Please note, this was due to meetings at Sylvia Park, not because I'm an H&M/Zara fan boy ).

Sunday's visit was just ludicrous. Zara was packed with queues almost the length of the shop for fitting rooms and checkout. H&M was even more packed that they had a zig-zag queue of people and nothing short of a small army of security guards at the doors (literally, I counted 8). This of course means nothing besides the hype is real especially as this was the first weekend they had been opened.

My visit yesterday in the middle of the day was much easier to actually take my time to look around and buy some stuff (didn't bother Sunday). Zara has similar vibes to Glasson's and as I and Abroath mentioned earlier, we cannot ignore Glasson's classy revamp which will position it much more in line with Zara (and above H&M) in the consumers mind. HLG's timing of the Glasson's upgrade was also well done as had they done it now consumers would get the feeling they are scurrying around trying to survive now they are here.

Overall I can't complain. Both stores had great prices and a great range of stuff. Just about everything you could need under one roof rather than buying bits here nd there. The hype will naturally die down but personally they will be my new go-to stores when shopping for clothing in that ~HLG price range. Yes I speak from a younger point of view but both my parents were also quite impressed with their offerings. As I think Tiger explained the other day that activity breeds activity, I couldn't help but agree. Seeing Sylvia Park that crazily busy and all the consumers walking around, you can bet they made the trip FOR H&M and Zara but that they will not visit those 2 shops and then leave. I was a perfect example of that. Although HLG wasn't one of the other shops I vistited hehe.

Abroath also mentioned they are unlikely to move out of the main centres of New Zealand... well arguably is this not where the large majority of clothing sales take place? I don't see how that's a positive. HLG may keep some good will with rural/other city consumers but there's low dollar value on that and as I also said earlier, there is little loyalty to chains like HLG so when these consumers venture into main centres they will be buzzing to check out these new retail giants.

At the end of the day, this is not doomsday and they are not going to run every clothing retailer out of business in NZ as I and some others might be making it sound and if anyone is up for the challenge of protecting their income (if not improving it) then I'm sure we would all agree HLG would be a top contender. But I feel the atmosphere here has changed from a "Yay HLG is great" attitude to "No you're wrong and HLG will survive".Went from HLG thriving to surviving talk pretty quick. I have no doubt they will survive but many seem to now be giving reasons as to why they won't go out of business it seems rather than overcome.

Just a healthy debate and bottom line is that HLG's results in the coming months will speak for themselves.