Luxury accessories retailer Oroton has suffered a slump in sales during the first weeks of the 2017 financial year, but says its focus on stand-alone retail stores is working.
The retailer, which has 63 Oroton stores, including eight overseas, says crucial comparable store sales fell eight per cent during the first 17 weeks of the current financial year amid ongoing stiff competition from the likes of Michael Kors and Mimco.
Chief executive Mark Newman has told shareholders at the group's annual general meeting on Thursday that this was partly because Oroton enjoyed strong comparable store sales in the same period a year ago.
Mr Newman said the strategy to focus on stand-alone retail stores was showing results, with 11 per cent like-for-like sales growth.
He said the group had positioned itself well for its biggest trading months in the lead-up to Christmas having dumped unprofitable categories - apparel, shoes and lingerie - to focus on its best sellers, handbags and wallets.
"Our design team have put extra focus on our core women's handbag collections, with the introduction of more colour and more accessible price points, aimed at a younger audience, in order to expand our customer base," he said.
"We have expanded our range of limited edition bags, which are at the top of our price range and have become collector's items by our core customers."
He said the group had also introduced a range of personalisation and customisation options to handbags and wallets to allow customers to make them their own.
There was also new jewellery, watch, and gift ranges designed for Christmas which had just arrived in store, alongside a range of fragrances, he added.
The group's clothing and accessories label Gap, which has seven stores, had recorded an eight per cent decline in like-for-like sales.
Mr Newman said Gap's sales were primarily dented by a poor October mid-season sale, but there had been an improvement in trade during November.
The company has opened an online store for GAP with David Jones to reach customers outside of NSW and Victoria. It plans to launch a "full local" Gap online store towards the end of the financial year.
Oroton Group in September reported a 31 per cent lift in its annual net profit to $3.4 million for the 2016 financial year.
Shares in Oroton were flat at $2.35 at 1105 AEDT.
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