HLG - Hallenstein Glassons Holdings

[Red Baron]

I like this company, and I have a small investment in HLG.  I kept it small as in an economic downturn cars and electricity are essential while new clothes may not be.

Vell I vas taught at zchool, ze 3 essentials vor life vere:  vood, clothing and zhelter.

Unless you are zuggesting zhat vhat Hallenstein Glasson zell eez not really 'clothing' een ze essential sense (an argument vhich may carry zome weight).

RB

[Bev]

Vell I vas taught at zchool, ze 3 essentials vor life vere:  vood, clothing and zhelter.

Unless you are zuggesting zhat vhat Hallenstein Glasson zell eez not really 'clothing' een ze essential sense (an argument vhich may carry zome weight).

RB

No, while clothing is essential new clothing may not be.

[Basil]

We've endured nearly 6 years of atrocious retail conditions since Covid hit. I'm hopeful the worst is behind us.

[lorraina]

This makes good sense to me;
The Group leases retail stores under non-cancellable operating leases expiring within one to six years. There
is a small portion of lease contracts which contain renewal rights. In considering the lease term for these
contracts, the Group has determined that rights of renewals are not reasonably certain to be exercised due
to the nature and location of the stores and the changing retail environment. It is the Group's strategy to
renegotiate the terms of all leases at their expiry instead of exercising renewal rights. This agile strategy is
enabled by having stores relatively small in size and not highly customised, and therefore relatively straight
forward to move locations. In addition, with the current retail market uncertainty the Group needs to
maintain a degree of flexibility.

[LoungeLizard]

This makes good sense to me;
The Group leases retail stores under non-cancellable operating leases expiring within one to six years. There
is a small portion of lease contracts which contain renewal rights. In considering the lease term for these
contracts, the Group has determined that rights of renewals are not reasonably certain to be exercised due
to the nature and location of the stores and the changing retail environment. It is the Group's strategy to
renegotiate the terms of all leases at their expiry instead of exercising renewal rights. This agile strategy is
enabled by having stores relatively small in size and not highly customised, and therefore relatively straight
forward to move locations. In addition, with the current retail market uncertainty the Group needs to
maintain a degree of flexibility.

It does make good sense, given the acknowledged "current retail market uncertainty." Seems like it isn't just  Hallensteins investors needing to keep one eye on the exits, but maybe Hallensteins itself

[lorraina]

The dynamics of Malls seems to change every few years.
In Christchurch Northlands Mall lost Pak'n Save,while The Palms saw K Mart move out,meaning lower foot traffic..
"This agile strategy is
enabled by having stores relatively small in size and not highly customised, and therefore relatively straight
forward to move locations."
   

[Basil]

Very smart operators... smarts is what you get when you've been in business for more than 100 years.

[Dolcile]

Hi Lorraina, if you don't mind, where are you getting this information from - is it the annual report?

[lorraina]

In the printed annual report notes page 34  4.1 Leases

In the link below page 36.
https://api.nzx.com/public/announcement/461702/attachment/455526/461702-455526.pdf

[winner (n)]

HLG closed over $10

On its way to $15 now

[winner (n)]

HLG online sales make up 18% of total sales and they recognise the growing importance of keeping up with how customer experiences are changing in this digital / AI world.

Glad they noted in last announcement " Looking ahead, we remain committed to adopting new technology and optimising our digital platforms to ensure an industry-leading experience across desktop, mobile, and in-store touchpoints."

I found this an interesting article by Boston Consulting.

When Brands Meet AI Bots: Customer Experience in the Era of Agents

Hope they mention AI and agents and bots at the ASM. That'll get punters talking.

https://www.bcg.com/publications/2025/when-brands-meet-ai-bots-cx-in-the-era-of-agents

[Basil]

New Australian distribution warehouse is being kitted out with robotic pick technology.

[winner (n)]

Since 2019 online sales have grown 91% while instore sales have grown by 54%

Covid gave online a big boost but it seems that they retained a lot of the good that came out of that

Likely to see online grow further and become an even bigger part of the business

[winner (n)]

New Australian distribution warehouse is being kitted out with robotic pick technology.

Cool

Robots and great online activity all good

So those old fuddy directors who are past it according to NZSA seemed pretty switched on.

[Pierre]

Since 2019 online sales have grown 91% while instore sales have grown by 54%

Covid gave online a big boost but it seems that they retained a lot of the good that came out of that

Likely to see online grow further and become an even bigger part of the business

With the greater and increasing portion of their total sales and profit coming from Australia the change in the AU/NZ exchange rate will surely be working in HLG's favour. AUD100 is worth NZ115 today.