Rag trader PAS Group optimistic a celebrity touch can turn lagging earnings
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Weathering the retail storm has been difficult for rag trader PAS Group but it has pinned high hopes on celebrity endorsements and online sales to dig them out of declining earnings.
The clothing group, known for brands such as Jets, Review and Yarra Trail, forecast EBITDA between $8 million and $8.5 million for the first half of the year, down from $11.6 million in 2017.
The company says soft operating conditions in the retail space are to blame.
“Ongoing subdued consumer sentiment, industry wide traffic headwinds and the elevated promotional environment flagged in our August results announcement have continued,” the group told shareholders on Tuesday.
Shares in the company (ASX:PGR) were down 2.45 per cent at close on Tuesday, at a 52-week low of 40c.
Stock has seen a steady decline since its takeover by Brand Acquisition Co mid-2018, when it reached highs of 78c.
But the company won’t let difficult retail conditions get it down.
It has launched into the online active wear space with former third runner up Miss Universe 2009, Rachael Finch through her B.O.D label, a move PGR says is demonstrative of the power of social media stars.
Womenswear brand Review is set to launch on the Amazon marketplace and Alibaba’s Tmall later this month, driving further online sales which grew by 25 per cent on the prior corresponding period.
Boxing brands Lonsdale and Everlast have also been added to the books as well as the design and supply of Mix apparel for Coles supermarkets.