Re: MRL?
Well - there you go I spoke to soon - looks like the media is also hot on Millers trail. The following is from todays Australian.
Downmarket stores not merry
Katherine Jimenez
December 03, 2004
THE first casualites of the fiercely competitive Christmas trading period have emerged with investors bailing out of diversified downmarket retailers Funtastic and Miller's Retail amid concerns about their sales and profit prospects.
Shares in Funtastic collapsed 15 per cent yesterday after management dropped a bombshell, warning net profit after tax could be up to 18 per cent below analysts' mid-range forecast of $18.4 million and about $8 million below its $15.8 million profit last financial year.
Investors slashed 39c from its shares to $2.19 on heavy turnover.
Funtastic blamed a mistake with its foreign exchange hedging which would crunch margins in the second half by about $3 million, as well as weaker than expected sales due to a "softening" market in October and November.
But Funtastic's commentary was in stark contrast to other high-profile retailers.
Harvey Norman, Woolworths, Coles Myer and David Jones have all reported strong trading during November and are upbeat about the whole Christmas trading period.
Investor unease is also building about Miller's -- owner of discount variety stores Crazy Prices and Go-Lo and womenswear chain Katies.
The stock has been sliding since management revealed last Friday that first-quarter sales were still under pressure from competition but the slide has been particularly sharp in the past two days.
The stock fell yesterday 8c to a four-year low of $1.08 with 2.8 million shares trading. It is down 40 per cent this year.
Sources have suggested there could be more to Miller's problems than just increased competition.
In May, Perennial Value Management dumped its 8.6 per cent stake because it believed there were deep-seated problems within Miller's company that had not yet come to light. Perpetual Trustees Australia has been selling down its interest over the past few months.
But Miller's chief Gary Perlstein has repeatedly attributed the poor sales and profit results to the price war in the $4 billion discount variety market, which represents a big slice of its total group earnings. He has been particularly critical of rival New Zealand's Warehouse Group, which he says created the price war through its mistakes.
But Miller's apparel business has also underperformed and it appears that space is likely to get tougher for Mr Perlstein and his management.
On Tuesday, Target -- owned by Coles Myer -- said it would tighten the screws on apparel specialty retailers.
Analyst feedback on the Target store tour on Monday was very upbeat.
Citigroup Smith Barney wrote: "Target is on a roll. Based on today's fashion trends, the product is rich in diversity and depth."
Target said it planned to increase its direct sourcing from Asia and increase its presence in the country.
Citigroup said Target still had good growth opportunity through better average selling prices, higher sales per square metre and country stores.
Analysts' report cards on Officeworks was also positive.
Coles Myer's shares rose 1c yesterday to $9.79.
Well - there you go I spoke to soon - looks like the media is also hot on Millers trail. The following is from todays Australian.
Downmarket stores not merry
Katherine Jimenez
December 03, 2004
THE first casualites of the fiercely competitive Christmas trading period have emerged with investors bailing out of diversified downmarket retailers Funtastic and Miller's Retail amid concerns about their sales and profit prospects.
Shares in Funtastic collapsed 15 per cent yesterday after management dropped a bombshell, warning net profit after tax could be up to 18 per cent below analysts' mid-range forecast of $18.4 million and about $8 million below its $15.8 million profit last financial year.
Investors slashed 39c from its shares to $2.19 on heavy turnover.
Funtastic blamed a mistake with its foreign exchange hedging which would crunch margins in the second half by about $3 million, as well as weaker than expected sales due to a "softening" market in October and November.
But Funtastic's commentary was in stark contrast to other high-profile retailers.
Harvey Norman, Woolworths, Coles Myer and David Jones have all reported strong trading during November and are upbeat about the whole Christmas trading period.
Investor unease is also building about Miller's -- owner of discount variety stores Crazy Prices and Go-Lo and womenswear chain Katies.
The stock has been sliding since management revealed last Friday that first-quarter sales were still under pressure from competition but the slide has been particularly sharp in the past two days.
The stock fell yesterday 8c to a four-year low of $1.08 with 2.8 million shares trading. It is down 40 per cent this year.
Sources have suggested there could be more to Miller's problems than just increased competition.
In May, Perennial Value Management dumped its 8.6 per cent stake because it believed there were deep-seated problems within Miller's company that had not yet come to light. Perpetual Trustees Australia has been selling down its interest over the past few months.
But Miller's chief Gary Perlstein has repeatedly attributed the poor sales and profit results to the price war in the $4 billion discount variety market, which represents a big slice of its total group earnings. He has been particularly critical of rival New Zealand's Warehouse Group, which he says created the price war through its mistakes.
But Miller's apparel business has also underperformed and it appears that space is likely to get tougher for Mr Perlstein and his management.
On Tuesday, Target -- owned by Coles Myer -- said it would tighten the screws on apparel specialty retailers.
Analyst feedback on the Target store tour on Monday was very upbeat.
Citigroup Smith Barney wrote: "Target is on a roll. Based on today's fashion trends, the product is rich in diversity and depth."
Target said it planned to increase its direct sourcing from Asia and increase its presence in the country.
Citigroup said Target still had good growth opportunity through better average selling prices, higher sales per square metre and country stores.
Analysts' report cards on Officeworks was also positive.
Coles Myer's shares rose 1c yesterday to $9.79.
