Retailer Specialty Fashion Group has warned its full year earnings will be almost cut in half due to troubles with its Rivers brand.
Specialty, which also owns Katies, Millers and City Chic, expects full year earnings before interest, tax, depreciation and amortisation to be between $20 million and $21 million, down from $39.2 million a year ago.
The retailer's earnings have been dragged down by a $21.6 million loss from Rivers, which it acquired in 2013.
Specialty has been heavily discounting stock at Rivers in an effort to clear the way for new products as it looks to turn around the troubled retailer.
The group said it was aware of problems with Rivers when it bought the business, but the turnaround was taking longer than expected.
"When compared to our expectations at acquisition, some of these strategies have taken longer than initially anticipated to have a positive impact on Rivers profitability," Specialty said.
"The investment thesis, however remains. Rivers was a proud and profitable household brand that lost its way, and the group will return this iconic brand to its former profitability and popularity."
Excluding Rivers, Specialty's fashion chains lifted same store sales 5.3 per cent in the year to June.
Specialty will release its full year results on August 25.
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