Spotlight’s NZ arm posts FY16 profit drop as costs rise

Article – BusinessDesk

Dec. 30 (BusinessDesk) – Spotlight, New Zealand’s largest fabric, craft and home decor retail chain owned by one of Australia’s wealthiest families, posted a decline in profit for the first year in five in 2016, as it marked two decades in this country.Friday 30 December 2016 11:09 AM

Billionaire Aussie family’s NZ Spotlight posts FY16 profit drop

By Tina Morrison

Dec. 30 (BusinessDesk) – Spotlight, New Zealand’s largest fabric, craft and home decor retail chain owned by one of Australia’s wealthiest families, posted a decline in profit for the first year in five in 2016, as it marked two decades in this country.

The local unit of the Melbourne-based chain posted a 14 percent drop in profit to $5.2 million in the year ended June 26, according to its financial statements posted with the Companies Office last month. Revenue increased 3.8 percent to $103.4 million. Costs rose across the areas of marketing, personnel, and its support group, led by a 36 percent jump in distribution costs to $4 million, and a tripling of ‘other’ costs to $3.7 million. The company wasn’t immediately available to comment.

Spotlight has grown from the humble beginnings of a single dress fabric stall at Melbourne’s Queen Victoria Market in the early 1970s to a chain of more than 100 sew, craft, party and home decorating superstores across Australia, New Zealand, Singapore and Malaysia. The first New Zealand store was opened in Wairau Park in Auckland in January 1996, and in a March press release the company noted it had sold 540,000 cushions, 300,000 costumes, 3 million buttons and 30 million metres of fabric in the ensuing 20 years, with 18 stores now spread across the country from Invercargill to Whangarei.

The family empire was established by brothers Morry Fraid and the late Ruben Fried, whose differently spelt surnames have caused trouble ever since the school administrative error that caused it.

Spotlight was ranked 40th on this year’s BRW Rich List, with an estimated wealth of A$1.22 billion. The business is now run by Fraid alongside Fried’s son Zac and its operations include Spotlight Property Group, which develops and owns large-format retail centres, often with its own stores as anchor tenants.

Its SPG Properties unit in New Zealand, which owns $23.5 million of investment properties, posted a 7.8 percent decline in profit to $1.4 million in the year ended June 30, as revenue slid 11.5 percent to $2.2 million, according to its latest financial statements.

In Australia, the company has branched out from haberdashery into the outdoor equipment business with the camping and sporting goods chain Anaconda, and has an investments division, Alara, with holdings in venture capital, private equity, local and global shares and managed funds.

The Sydney Morning Herald reported last month that the rich listers were part of a group of wealthy private families which secured the 61 stores and 21 development sites of the failed Masters hardware chain in Australia. Zac Fried told the paper SPG had picked up 19 of the 21 development sites, most of which would be converted to homemaker centres, and the deal would also see new Spotlight and Anaconda stores opening in converted Masters buildings.

Fried noted that some sites had residential potential, adding to signs the family empire is expanding its property development operations after The Australian newspaper reported in July that the billionaire family would develop an Aloft hotel in Melbourne as part of a A$120 million mixed-use project in Chapel Street, South Yarra, dubbed ‘402 Chapel’.

(BusinessDesk)

Content Sourced from scoop.co.nz
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