Oroton halts shares ahead of earnings update

Patrick Hatch

Luxury handbag and fashion accessory retailer Oroton has entered a trading halt as it prepares to reveal that sales have continued to deteriorate.

Oroton said in a letter to the ASX on Monday morning that its preliminary earnings figures for April 2017 - an important trading month for the retailer - were down on the same period a year ago.

Oroton earnings report

Clothing and accessories retailer Oroton withholds its dividend as profit halves.

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Oroton earnings report

Clothing and accessories retailer Oroton withholds its dividend as profit halves.

The company said it needed to enter a trading halt so the market was not trading Oroton shares without knowing how much sales had fallen. Oroton will be in a trading halt until Wednesday or it reveals the sales figures.

Founded in Sydney in 1938, the company has 48 Oroton stores across Australia, New Zealand, Singapore and Malaysia.

Oroton has the local licence to sell American apparel brand GAP, of which it has seven stores, and last year bought about 30 per cent of the personalised accessory brand TDE for $4.5 million.

Its first-half results handed down in March showed a 10 per cent drop in sales to $67.1 million compare with the same half a year prior.

Net profit after tax was $1.8 million for the half, down 52 per cent from $3.8 million in the prior period.

Oroton's sales were hit by its exit from women's apparel, shoes and lingerie, and lower sales at its factory outlets. Sales at GAP stores also fell, and the company was hurt by heavy discounting by competitors and soft consumer sentiment, it said at the time.

Oroton's chief executive and managing director for the past four years, Mark Newman, resigned a fortnight after handing down the soft result.

A replacement has not yet been appointed, with company director Ross Lane acting in the top role.

A string of well-known Australian fashion retailers have called in administrators recently, including David Lawrence, Marcs, Payless Shoes, Pumpkin Patch, Rhodes & Beckett, Herringbone, Seduce, Laura Ashley, Josh Goot and Kit & Ace.

with AAP