Shares of New Zealand firm Hallenstein Glasson Holdings are climbing, thanks in part to mall-loving teens who are helping the fast-fashion company defy consumer gloom at home and in Australia. While the retail sector in both countries is struggling, Hallenstein Glasson’s youth-centric, budget-friendly brands are expanding their physical footprint and upgrading stores as sales boom. Its Wellington-listed stock has jumped 57% over the past year, topping New Zealand’s benchmark.
Hallenstein Glasson is a rare bright spot in a battered Australasian retail market. The relatively small NZ$881 million ($493 million) company is showing that cheap, trend-driven fashion and a bet on brick-and-mortar stores can still draw young shoppers. The purveyor of everything from crop tops to formal suits is also benefiting from the so-called “mallmaxxing” trend. Gen Z shoppers are increasingly treating malls as places to socialize in real life and detox from the digital world.
Strong earnings momentum should continue to drive the stock, while the company also has significant room to expand in Australia, said Paul Laxton Koraua, an analyst at Forsyth Barr in Auckland. Hallenstein Glasson operates about 130 stores across Australia and New Zealand. Glassons Australia accounts for about 58% of group revenue. Sales jumped 20% in the year ended Aug. 1, driven by a 29% surge at Glassons Australia.
The company refurbished several stores, relocated one to a larger site and opened a new shop in Sydney’s Inner West during the period. Still, the company cautioned that the economic and geopolitical environment remains challenging. Changes in consumer spending, foreign-exchange rates and operating costs may affect trading and profitability this financial year.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing