RETAILER Pacific Brands is pinning its future on the success of Bonds underwear and Sheridan sheets as it focuses on key brands and online sales to improve earnings.
The company on Monday cheered investors with a return to the black, with a first half net profit of $38.9 million.
The result for the six months to December 31 was a dramatic turnaround from a $362 million loss in the previous corresponding period which included large restructuring charges.
However sales fell 6.6 per cent, with the growth in underwear brands Bonds, Berlei and Jockey offset by weak sales in workwear brands Hard Yakka and King Gee.
"Restoring the company to sales growth is a top priority," chief executive John Pollaers said.
"The strategy, which includes focusing on key brands and diversifying channels to market, is the right one."
Mr Pollaers said the company had improved its margins and reduced its costs by $7.4 million by increasing its direct-to-consumer sales.
This was achieved by rising online sales across its key brands, opening more outlet stores for top-selling lines like Bonds, and its workwear division selling directly to businesses.
Mr Pollaers said the company was investigating ways to sell Bonds clothing, Sheridan homewares and some workwear brands in overseas markets such as the UK, US, China and southeast Asia.
"One of our ambitions is to become known for Australian design and innovation and I think it is time that the company reclaim that space," he said.
"Our business is already being studied by other overseas apparel brands and our designers are acknowledged internationally and I think there is more awareness than people think.
"But when we do it I think it will be a combination of some wholesale, some licensing opportunities that show up and then we'll explore other avenues over time."
Mr Pollaers said the company was still be looking at opportunities to grow its smaller brands and had no plans to sell any of them.
Morningstar analyst Michael Higgins said the market was pleased with the turnaround in the company.
"It's the first time in quite a while that company is showing some stability and stability in underlying earnings," he said.
"Although the results didn't show huge growth just the sign that things were stable was positive enough for the market."
While the company's key brands were doing well, Mr Higgins said it was a bit disappointing to see its second-tier brands produce softer results.
He said while the focus on internet sales was good there was still a question mark over the viability of the Bonds stores after fellow Australian retailer Billabong's strategy of opening its own outlets failed.
Pacific Brands shares closed 2.5 cents, or 3.4 per cent higher, at 75.5 cents.
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