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Business Description: OrotonGroup Limited (ORL) is a wholesaler and retailer of clothing, leather, and other fashion accessories. ORL owns and manages the Oroton brand and is the sole licensee of Polo Ralph Lauren clothing in Australia and New Zealand. ORL distributes its branded products through online website, its own retail outlets and via wholesale customer relationships with other retailers such as David Jones and Myer. ORL has over 80 retail stores across Australia, New Zealand, Singapore and Malaysia.
Strategy Analysis: Merchandise is marketed as high quality luxury items for aspiring consumers. The premium status of the brand is protected through steady product pricing with significant discounting restricted to traditional retail sales periods. Product and category expansion is a focus, and modern store designs seek to enhance the shopping experience. Management has embraced the online revolution with a significant effort in developing an online capability. Asia is also an opportunity where the brand receives good recognition and ORL can take advantage of lower operating costs and rising affluence. Management is considering the acquisition of complementary brands with similar market positioning and brand awareness as Oroton.
OrotonGroup reported NPAT up 2.1% to $16.4m for the half-year ended 26 January 2013. Revenues from ordinary activities were $101.48m, up 2.4% from the same period last year. Diluted EPS was 39.97 cents compared to 39.21 cents last year. Net operating cash flow was $24.93m compared to $16.34m last year. The interim dividend declared was 22.0 cents compared with 22.0 cents last year.
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