big profit warning issued I do not hold CDO. Never did. The...

big profit warning issued I do not hold CDO. Never did. The writing was on the wall when Solomon Lew sold in early 2005(or was it 2004?)


At Colorado the products don't walk out the door, the boss does
By Stephen McMahon, The Age
January 26, 2006

CLOTHING and footwear retailer Colorado has hit investors with a double whammy — a $9 million earnings downgrade and the need to start searching for a new managing director.

Managing director Rowan Webb will step aside when his contract ends in March but will remain a major shareholder.

The group has revised its earnings before interest and tax down from $57 million to $48 million, which includes a $4.8 million profit from a property sale.

This represents a 22 per cent fall in earnings from last year, when the company recorded EBIT of $62.3 million. In November, Colorado warned the market its EBIT could fall because of earnings pressure.

Chairman Bill Gibson said the downgrade had been caused by increased competition for mid-market shoppers' dollars.

"The problem is discount, discount, discount," he said. "The market is being led downwards by Myer and David Jones, who are constantly offering discounts."

With sales falling, Colorado intends to concentrate on maximising margins through tightly controlled operating costs at its 400 shops in Australia and New Zealand.

In an effort to rebuild, the company is reviewing its brand mix with a greater focus on brands such as Jag and diana ferrari, both of which performed strongly over Christmas.

Colorado shares hit a 12-month high of $6.08 in March before starting a two-month slide. They dived in early December and have continued to move lower, closing yesterday down 8¢ at $3.82.