The Chairman and Group MD’s address at the AGM

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CHAIRMANS ADDRESS TO SHAREHOLDERS ON 11 DECEMBER 2019
RESULTS FOR FULL YEAR ENDED 1 AUGUST 2019

The audited net profit after tax for the 12 months to 1 August 2019 was $29.02 million, an increase of 6.06%
over the corresponding period last year ($27.36 million).
Group sales were $287.55 million, an increase of 3.36% over the corresponding period last year ($278.20
million). Sales have been amended and restated for last year in line with the requirements of NZ IFRS 15 to
account for freight charges paid by our online customers. This has no impact on profit.
The 2018/19 financial year has seen margin pressure across the Group, the main factors being the lower USD
exchange rate and the increased promotional activity across both the New Zealand and Australian markets. The
gross margin has fallen by 130 basis points from 61.3% to 60.0%. Expenses have been well controlled across the
Group and this is being carried on into the new trading year.

Segment Results

Glassons New Zealand
Sales for the year were $100.73 million, an increase of 3.91% on the prior year. Sales growth in the second half
continued to build and improve on the growth in the first half of the year.
Fashion remains the key focus for Glassons, and the brand continues to bring to market the products customers
want with speed and agility. Ongoing investment in digital is enhancing the customer engagement both online
and in store.
During the year, refurbishments were completed in the flagship Newmarket Store (Auckland), Bayfair
(Tauranga), Palmerston North and Te Rapa (Hamilton). The Hornby Outlet Store (Christchurch) completed an
upgrade in the current financial year. To support the increase in online sales, a new Fulfilment Centre has been
built in Christchurch. This opened in October in time for peak trade in the lead up to Christmas.
Glassons Australia
Sales for the year were $89.50 million, an increase of 13.89% on the prior year including the new store
openings. By continuing to deliver great customer service, evolving our product offer and improving our speed
to market we have enhanced our strong brand position.
During the year stores in Parramatta (Sydney) and Highpoint (Melbourne) were refurbished and the footprint of
the Bondi store (Sydney) was expanded. New stores opened in The Glen in Melbourne and Liverpool in Sydney.
A move to a new Fulfilment Centre in Sydney is planned for early next year. This will support the planned growth
in the Australian market in both online and physical store sales.
Further investment is proceeding in Australia in the current financial year, with a new store opened in Robina on
the Gold Coast and a larger refurbished store opened in Eastgardens in Sydney. A number of other stores are
currently being considered.

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Hallenstein Brothers
Sales for the year were $97.33 million (including Australia), an increase of 0.26% on the prior year. The second
half of the year proved much tougher for Hallenstein Brothers. This was due in part to the milder winter, as well
as some challenges with the product offering. A great deal of work is being done to improve the product offer
and we are seeing positive customer feedback in the new season although trading continues to be tough.
Sales growth continues in Australia with the original three stores achieving incremental year on year increases
over the 12-month period. Towards the end of the year an outlet store was opened in Harbourtown on the Gold
Coast to support the full price stores. Opportunities for expansion into new Australian sites are now being
considered.
In New Zealand, a new store was opened in Frankton in Queenstown and refurbishments have been completed
at Botany (Auckland), Bayfair (Tauranga), and Te Rapa (Hamilton). For the current financial year the Hornby
Outlet Store (Christchurch) has been completed. The Fulfilment Centre in Auckland was also expanded during
the year to support the growth in online sales.
Investment has continued in digital to help drive sales and improve customer engagement with website
developments and an increased use of technology in store.

Properties
Prior to the end of the financial year, the investment property in Lambton Quay was sold resulting in a gain on
sale of approximately $1.1 million after costs.

E-Commerce
Online sales continue to grow significantly ahead of physical stores as a result of the Company’s ongoing
investment in digital and customer demand. Online sales now represent 15% of Group turnover. Investment will
continue in this key strategic area to provide relevant content across mediums to enhance customer
engagement.

Dividend
The Directors have declared a final dividend of 24 cents per share (fully imputed) (24 cents per share last year)
to be paid on 17th December 2019. Together with the interim dividend of 20 cents per share that was paid on
18th April 2019, the full year dividend is 44 cents per share. The dividend payment is able to be maintained as
the Company’s balance sheet continues to be strong, and inventories well controlled.

Future Outlook
Group sales for the first 17 weeks of the new financial year are +6.7% on the prior corresponding period.
As previously noted in the Company’s annual results release made 27 September 2019, the impact of a weaker
New Zealand and Australian dollar is creating margin pressure as product is purchased in USD. The USD
exchange rate in New Zealand is down around 4 cents to the dollar on last year and 4 cents down to the dollar in

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Australia, which in both cases is a significant shift. The ability to raise prices to compensate is limited due to the
current trading environment and increased promotional activity in the market.
It is difficult to reliably forecast the total Summer season at this stage as the remainder of December and
January trading periods are key contributors to the overall result.
The Group is well prepared to capitalise on this key trading period and we will provide a further trading update
at the end of the summer season, which ends on 1 February 2020, then actual summer season results will be
known in late March2019.
In closing I would like to thank the Hallenstein Glasson Executive Team and all our staff, for the excellent 2019
trading result that they delivered. It was a tremendous effort by everyone.

Warren Bell
Chairman
11
th
December 2019

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Managing Directors’s address to Shareholders on 11 December 2019
Results for the full year to 1 August 2019.
OVERVIEW
It is a pleasure to be here today. Once again it has been a very strong performance for the Group for
the Financial Year ended 01 August 2019. The results follow the continued growth in Glassons
Australia and strong performance of the Glassons brand in the New Zealand market. Whilst
Hallensteins had a more challenging year, the brand remains strong and we are confident of the
repositioning that we are progressing.
In an increasingly competitive market, we remain focussed as a business on four key areas;
 Building the depth of talent and agility of our teams
 Keeping the customer at the forefront of our decision making
 Driving buying strategies and ensuring speed to market
 Ability to be fluid across channels with how we connect with our customers
OUR PEOPLE
I am a firm believer that the strength and capability of our people is what underpins the success of our
business. The entrepreneurial spirit which empowers our people to ensure the customer is at the
forefront of our brand and service delivery.
As a business we are fortunate with the depth of talent in both Glassons and Hallensteins. We remain
committed to continuing development and providing career pathways. Pleasingly in the past year we
have seen across all businesses numerous internal promotions, as we recognise the talent within our
existing teams.
As a Company we continue to support key team members in attending international conferences and
courses. As the world of retail continues to evolve rapidly we are cognisant of the importance of
keeping a global lens on the trends and innovations that are coming to market.
RETAIL
Warren has highlighted the investment made in new stores and refurbishments through the 2019
financial year.
As a Group and within each brand we value the importance of a compelling retail experience and we
continue to improve, innovate and evolve our stores.
Technology has been a key enabler to improve store efficiency, we continue to drive the use of IPods
across our retail teams. Currently there are also a number of trials in selected stores to enhance
efficiency in the returns process as well as the use of mobile Point of Sale.
We are cognisant of the importance of providing a seamless experience for our customers across both
the physical and online platforms, and this is at the forefront of the technology innovations we are

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developing within the business.
The service ethos is also imperative for both brands in retail. Recently Glassons launched the
EMPOWER service programme for our retail teams. And equally with Hallensteins, we know the service
component is a key differentiator as a brand and the team remain focused on keeping this at the
forefront in store.
SUPPLY CHAIN
For both brands the agility of our supply chain is critical to our ability to respond quickly to fashion
trends and customer demand.
Our production and buying teams work closely with suppliers, and the teams visit supplier factories on
a regular basis to manage quality and delivery performance.
We remain mindful of the impact of the changing manufacturing landscape. Diversification across
suppliers remains highly relevant to manage risk and provide performance parameters to meet speed
to market programmes. We are pleased with the progress we are making in pursuing further
diversification.
We recently completed a brand new Glassons Fulfilment Centre here in Christchurch. A fantastic
facility, it positions us well to manage the growth, particularly from our online channel, in the New
Zealand market.
Earlier in the year we also completed an extension of the Hallensteins Fulfilment Centre in Auckland.
This allows for improved efficiency in the distribution of product.
We are also now in the final stages of a new Glassons Fulfilment Centre in Sydney, which we will
transition to in February. This facility is important to support the growth that we are achieving in the
Australian market.
DIGITAL
We continue to keep Digital at the forefront of both businesses and we are pleased with online now
accounting for 15.2% of total sales. We have been particularly pleased with the growth of online for
Glassons, which has been driven by the compelling digital interface with our customers.
As a business we will continue to invest in Digital for both brands across:
 People
 Technology
 Social and Digital Marketing, and
 Customer Relationship Management

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SUSTAINABILITY
We continue as a business on the journey of sustainability. We understand the importance of our
responsibility to the environment, our customers and team.
We maintained our B+ rating on the Ethical Fashion Report, and this was based on more stringent
criteria than previous years. We are however conscious of the vigilance and progression required to
further our commitment to sustainability.
We are working hard to improve engagement across our teams to identify our sustainability objectives.
Focus groups with our customers have also helped to identify our priorities which include reducing
packaging and the impact of waste right across our supply chain, in our stores and Head Office. In
addition, we are looking at how we can better communicate our goals and achievements to our
customers.
HALLENSTEINS
With 43 stores across the country, Hallenstein Brothers as a brand is well known in New Zealand. In an
ever increasing competitive retail landscape we are continuing to refine the brand position for
Hallenstein Brothers. We are conscious that in recent years, at times we have been too promotionally
focused and we believe we need to stay more closely aligned to our values of offering quality and
value. As a brand we know we resonate when we show case imagery and experiences that guys relate
too, whilst also heroing great product.
An area of focus in the business over the past six months has been improving our speed to market.
Establishing procedures and working with key suppliers has enabled us to be more responsive to
product reactions. Whilst still in its early stages, progressing our sophistication in this area will be very
beneficial to the business.
From a digital perspective, we are driving more content to have relevancy across social and digital
media channels. This content is also relevant to support our brand visibility on our web site and in-
store screens. We will continue to invest in this area as we strengthen the positioning of the brand.
As Warren has highlighted, during the financial year we opened a new Hallenstein Brothers store in
Frankton, and refurbishments occurred in Botany, Bayfair and TeRapa. Recently we also completed
refurbishment of our Hornby Outlet store.
The Australian stores for Hallenstein Brothers have performed well, and we are pleased with the
increase in retail sales at a store level. In addition to the three retail stores in Brisbane, we also added
an Outlet store in Harbour Town (Gold Coast) at the end of the financial year. This is an important step
in ensuring the market is self-contained in managing clearance product.
So whilst the sales profile in New Zealand has been relatively flat, we believe we are strengthening
many of the core foundations of the business to enhance performance in the New Zealand market and
to support the growth opportunity in Australia. We respect that we are on a brand journey to
strengthen the long term performance of Hallenstein Brothers.

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OUTLOOK
Firstly, I would like to take the opportunity to thank all of our staff for their commitment to the
business. Also to note is our Executive leadership team, and respective Heads of Digital and Buying
who all make an outstanding contribution. It is not only the talent within the business that impresses
me, but the dedication and commitment to go the extra mile that is evident throughout the business.
As we move forward we will remain focused on:
 Delivering fashionable product to cater for our respective customer segments, acknowledging the
importance of innovation and speed to market.
 The ongoing investment in digital to support the brand profile across all channels
 Strengthening the positioning of the Hallensteins brand
From a growth perspective we are confident of the potential of the Glassons brand in Australia, and we
are particularly pleased with the online growth we are experiencing for the brand in both markets. We
will also continue to build upon the Hallenstein Brothers profile in the Australian market.
As we are amongst the key trading period of the year, we are always cautious about projections for the
full season. There is no doubt that the market remains challenging with the constant juggle in
managing the impact on margins through an unfavourable exchange rate and the pressure of costs.
Whilst we have seen the positive results from the Black Friday promotional period, we are mindful of
the impact this will have on December trade.
We also acknowledge the repositioning required for the Hallenstein Brothers brand, and the financial
impact that this may have.
We however remain focused on what we can control, and that is to deliver great product to our
customers across channels in an engaging and inspiring manner.


Mary Devine
Group Managing Director
11 December 2019