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Supermarket giant Woolworths has made a multimillion-dollar investment in Melbourne startup Marketplacer as part of its plans to compete with the likes of Amazon through the launch of its own marketplace offering.

Woolworths’ venture capital arm, W23, announced the investment on Thursday which will see the supermarket take a minority stake in Marketplacer alongside a number of high-profile investors, including tech giant Salesforce and prominent investment firms Endeavour and Acorn Capital.

Marketplacer was founded in 2016 by Jason Wyatt and Sam Salter. The startup helps retailers create their own online marketplaces, similar to those offered by eBay or Amazon, and sell both their own and third-party products. This allows companies to effectively offer a larger range of products without having to stock the items themselves.

Woolworths will leverage its investment into Marketplacer to launch its own online marketplace offering later this year, which will begin with an initial pilot of an expanded range of everyday Big W products.

The supermarket’s head of new business, Faye Ilhan, said the new offering was intended to help the company keep up with shopper expectations, who have become increasingly accustomed to shopping online post-COVID.

“As more of our customers start their shopping journey digitally and buy groceries online, we know their expectations will only continue to rise,” she said.

“This will be a highly curated marketplace focused on range extension in our core everyday needs categories and we look forward to exploring opportunities with supply partners.”

Woolworths’ foray into this space may see the business butt heads with other marketplace heavyweights such as eBay, Amazon or Kogan. However, the marketplace model is becoming increasingly commonplace among other retailers, with Bunnings, Myer and Metcash all opting for the service.

Mr Wyatt said he was excited to have Woolworths on board as an investor, saying the business decided to invest after undertaking a global tender to find a new marketplace partner.

“It’s been a very humbling experience that provides a huge amount of credibility for any other organisation around the world that wants to use our platform,” he said.

The retailer’s shareholding in the business is a “very small minority stake”, Mr Wyatt said and doesn’t provide Woolworths with any exclusivity over the company’s platform, meaning Marketplacer can continue to work with other existing clients such as SurfStitch, Nokia and Providoor.

W23 managing director Ingrid Maes said: “W23 invests in innovative startups that accelerate our ecosystem strategy, and where long-term win-win partnerships are an inherent advantage for both parties.”

“Marketplacer is a leading platform for an increasing number of global retailers exploring third-party marketplace strategies, and will play a key role powering our own digital improvements.”

Woolworths’ investment in Marketplacer is one of many made by the company’s W23 venture capital arm since its launch in 2019. The company has acquired stakes in a diverse range of businesses, including Sherpa, Eucalyptus, Spoon Guru and Longtail UX.

Spell has today taken another step in its sustainability journey, announcing a new partnership with fashion rental platform GlamCorner. 

The partnership will see Spell become one of Australia’s first designers to launch its own rental offering on the GlamCorner platform, and follows a similar partnership between GlamCorner and David Jones. 

The partnership will offer an online destination for customers to rent from a collection of 48 Spell garments, including archived pieces from previous collections.

Speaking on the partnership, Spell co-founder Elizabeth Abegg said that the partnership adds another layer to the brand's sustainability mission. 

"What started as an emboldened mission to trace our supply chain and introduce more ecologically responsible fibres into our collections, has become a business-wide quest to always operate with people and planet at the forefront of our minds.

"In a world where our resources are finite, we have long known that it is circular or bust.

"Spell is very excited to play our part when it comes to moving towards a circular economy with our Sister to Sister rental platform, powered by GlamCorner.

"Inspired by our community, who have always led us with their passion to buy, swap and sell our pieces, we are now offering a new solution to accessing our collections whilst decreasing the size of your wardrobe and your environmental impact on the planet," she said. 

Orders will be fulfilled by GlamCorner’s 'click to rent' process which allows pieces to be rented out for a short term, returned and cleaned.

The partnership will help Spell support the circular economy, helping to reduce the 6000kg of clothes that end up in Australian landfills every 10 minutes.* 

GlamCorner co-founder and COO Audrey Khaing Jones welcomed the partnership with Spell. 

"It’s always been our mission from when we first started in a wardrobe of 30 garments to reshape the fashion industry towards a more circular economy and make rental the norm.

"Now, almost 10 years on we are working with Spell, one of Australia’s leading designers that are taking their impact and sustainability journey seriously.

"We’re proud to partner with a brand that is aligned with our vision to drive this generational change in fast fashion consumption and waste.

"Last year we worked with leading retailer David Jones and now we are working directly with leading Australian designers, this is a huge milestone for us.

"This partnership is setting an industry benchmark on the commitment that we should be making to sustainability," she said. 

The Spell x GlamCorner rental platform is available online now. 

Quadrant Private Equity has postponed plans to float its online auctions business Grays.com Ltd.

A Grays.com spokesperson said on Thursday morning that Quadrant and Grays management made the decision following a quick round of marketing conducted over the past fortnight.

“Having a deep understanding of the business, management and Quadrant have decided to delay an IPO having every confidence in its ability to continue to deliver expected GTV and earnings growth,” she said.

“While we have had strong local and offshore investor engagement throughout the PDIE process, we understand and respect that investors are keen to see more track record post the business transformation under Management/Quadrant ownership.”

Quadrant is expected to reconsider a float later in the year, once the business has another set of results under its belt.

Quadrant took control of Grays in 2019 and owns about a 90 per cent stake in the business. The company was formerly owned by listed leasing company Eclipx and had a short stint as a separately listed entity on the ASX-boards that ended in 2017.

Quadrant had brokers Jarden, Shaw and Partners and UBS pitch the business to Australian fund managers in the past fortnight.

A big part of the “investor education” was trying to get fund managers to take a fresh look at the business and consider changes that had occured under Quadrant’s watch.

The brokers told clients that the new Grays had been reshaped into a capital-light marketplace, that matched buyers and sellers in the same way as a Carsales.com or online real estate listings business, rather than an auction house with large inventory levels.

Investors were told Grays expected to report $132.9 million net revenue in the 2021 calendar year on a proforma basis, up from $124 million last year, and $28.8 million EBITDA.

The brokers had valued Grays at more than $300 million. Quadrant Growth Fund paid $60 million for Grays in July 2019.

A young Australian couple who started their streetwear brand from a single store on the Gold Coast have sold a majority stake in their business in a deal valuing the retailer at $600m.

Simon Beard, 36, and his 32-year-old wife Tah-nee will sell part of their Culture Kings brand to US-based online retailer a.k.a Brands, which has plans to expand the business to the huge North American market.

Brisbane-based Culture Kings, which operates an online business and eight physical stores around Australia, last month hosed down suggestions it was in talks with US investors about being acquired.

The company, founded by the Beards in 2008 on the Gold Coast, now employs 500 people with a focus on online sales.

Mr Beard, who began his retailing career selling products on Alibaba, claims to have pioneered ‘schoolies’ merchandise on the Gold Coast.

Culture Kings, which boasts Justin Bieber, Drake and Ronaldo as clients, sells a modern clothing range targeted to millennials and teenagers. Its stores feature in-house DJs and a basketball shooting competitions designed to attract the young.

Mr Beard said he would stay on as chief executive and retain a stake in the company that would remain based in Brisbane.

A.k.a, which is backed by Boston private equity firm Summit Partners, has a portfolio of online retailers that includes youth-focused brands Gold Coast-based Princess Polly, Brisbane-based Petal & Pup, and Rebdolls. Australian-born NBA star Ben Simmons is investing in a.k.a. in conjunction with the Culture Kings transaction.

A.k.a Brands chief executive Jill Ramsey said Culture Kings was one of the most sought-after streetwear retailers in the world with significant growth opportunities.

“We will work with Tah-nee and Simon to introduce and expand the Culture Kings experience in existing and new geographies,” said Ms Ramsey. ”We are thrilled to have them join our portfolio of high-growth brands.”

A.k.a did not disclose the financial terms of the deal. The company had initial talks in 2020 with potential partners about expanding in the US, but the outbreak of the COVID-19 pandemic had delayed any deal. It is understood the latest deal values Culture Kings at around $600m.

Mr Beard said the deal would allow Culture Kings to expand and become the “number one destination for streetwear across the globe” with a focus on expansion in the US with new physical stores.

“Our vision has always been to create the next global retail phenomenon,” said Mr Beard. “We couldn’t have found a better partner than a.k.a. The US market is very large.”

He said he always envisaged Culture Kings would become a global brand and credited his wife being a linchpin of the business’ success.

The couple live on the Gold Coast and last year unveiled plans to dramatically expand their mega mansion to create a giant Bali-style “pool zone”. They bought the resort-style property in May for $11.75m.

Culture Kings has successfully pivoted during the COVID-19 lockdowns with 75 per cent of its sales now transacted online.

According to the company’s latest financial statement lodged with the Australian Securities and Investments Commission (ASIC), Culture Kings reported a profit after tax of $19.4m last financial year on revenue of $183.7m.

Culture Kings is not the first Australian retail brand to be acquired by Hollywood-based a.k.a. Brands, which has been on the hunt for new digital businesses since it was founded in 2018.

Over the past two years, it has bought Princess Polly, which claims to be one of fastest growing brands in the US for women between 16 and 25, and Petal and Pup, founded in 2015 by Tiffany Henry.

Queensland Treasurer and Investment Minister Cameron Dick welcomed the investment by a.k.a. Brands which was expected to create new jobs in Queensland as Culture Kings expanded in the US market. Mr Dick said the growth would include expanding warehouse and ordering operations at its Archerfield base.

“I understand Culture Kings is likely to employ dozens more Queenslanders over the next 12 months as a result of this deal,” Mr Dick said.

Internet giant Amazon Australia has moved closer to even greater domination in the local retail sector with the largest fulfilment centre in the southern hemisphere – the size of 24 rugby league fields – at the $150 million Goodman industrial estate in Sydney’s west.

It will be the first robotics-automated centre, covering 200,000 square metres over four levels, and will employ 1500 warehouse staff. And from this week 300 additional contractors will begin to arrive on site to start the fit out, including the installation of the conveyer belt and robotics equipment.

Once completed, the mammoth centre at the Goodman/Brickworks Oakdale West industrial estate, close to the future location of the western Sydney international airport at Badgerys Creek, will house up to 11 million items and will be equipped with the most advanced Amazon robotics technology.

Goodman is the largest landlord for Amazon globally and this new centre adds to its site at Moorebank in Sydney and the centre in Lytton, Brisbane. Amazon launched in Australia in December 2017.

Amazon Australia director of operation, Craig Fuller, said the new site, due to be operational at the end of 2021, will be the fifth fulfilment centre in the country and will carry smaller goods and items that will service metropolitan Sydney, the NSW central coast and up to Brisbane.

“This $500 million investment that Amazon’s making in western Sydney is a real commitment statement about Amazon and their future in Australia,” Mr Fuller said.

The group is also looking at smaller inner-city sites, such as Alexandria in Sydney’s south to cater for localised smaller deliveries.

“We took this template from a European model. But we had to make a couple of bespoke changes to reflect some of the logistics aspects that are adapted to Australian conditions,” Mr Fuller said, on a tour of the centre on Tuesday, which is still under construction.

“Once we get this building launched towards the end of the year 2021, it is about really consolidation and stabilisation for Amazon here.”

The property will also embrace high COVID safety standards that were introduced to the plans and fit-out last year when the global pandemic hit.

Goodman’s general manager Australia, Jason Little, said development of this fulfilment centre sees Goodman continue to deliver its global strategy of providing essential infrastructure to support the digital economy, and “to meet the increasing demand for strategically located logistics space with easy access to large consumer markets”.

“Our $150 million investment in roads and infrastructure will create road capacity and better access to services, building on outer-western Sydney as a key area for logistics and transportation,” Mr Little said.

Once operational, robots work collaboratively with employees by moving the pods of inventory to them, reducing the time and effort that would otherwise be required for the employee to stow items for sale or pick them for new customer orders.

They also save space, allowing for 50 per cent more items to be stowed per square metre which in turn allows for increased product selection.

Cashless retail sales for the month of February have stayed relatively flat, according to NAB’s most recent index, rising only 0.3 per cent month on month, from 18.9 per cent to 19.1 per cent.

However, given the volatility seen in the retail industry in the last year, NAB’s chief economist Alan Oster said the result was “fairly good” – though suggests some of the outsized growth seen during 2020 is returning to more “normal” levels.

“The onset of the pandemic has seen profound changes for Australian retail, with the sector in aggregate going from the weakest sector in the NAB Monthly Business Survey to one of the strongest,” Oster said.

“But as 2021 rolls on and the prospect of some kind of post-pandemic normality comes into view via vaccination, how will consumers respond? Early signs […] suggest that household goods and other retailing are returning closer to pre-pandemic growth, while food has now fallen to essentially pre-pandemic levels.

“Meanwhile, cafes, restaurants and takeaways continue to recover.”

The fastest growth was seen in Western Australia, according to NAB, with cashless retail sales up 22 per cent. Victoria, however, saw the slowest growth – largely a result of its impromptu five-day lockdown during the month.

Online sales jumped in January after a dip in December, according to the latest NAB Online Retail Sales Index.

And it’s estimated that in the 12 months to January, Aussies spent $45.61 billion online.

The index found e-commerce rose 4 per cent during January following the 4.7 per cent fall a month prior, while year-on-year online sales grew 45.6 per cent. These figures differ slightly from the results released yesterday by the Australian Bureau of Statistics, which saw online grow 1.6 per cent and 62.8 per cent on a monthly and annual basis for the same period.

According to NAB chief economist Alan Oster, metro areas continued to outpace regional uptake of online sales, and takeaway food continued to see strong buy-in from Australian consumers.

“While [takeaway food] is still the smallest share of spend, with such high growth over the past year, its share of spend has increased from 4.1% a year ago to 5.3% in January,” Oster said.

“The largest contribution to growth for this category in January was from the two biggest sales states, NSW and VIC.”

February’s result is likely to feel the impact of the Western Australian and Victorian ‘circuit breaker’ lockdowns, which shuttered retailers for a number of days in an attempt to halt the spread of the virus.

Online marketplace Kogan has seen gross profit double to $112.9 million during the six months to 31 December, while net profit (excluding non-cash items) jumped 250 per cent to $36.5 million.

And, after months of continued growth due to the sustained shift online brought on by the Covid-19 pandemic, earnings per share tripled to 35c per share.

Active customers hit 3 million after achieving network growth of 76.8 per cent.

“We launched Kogan to change the retail industry nearly 15 years ago, and we would have been cheering if we helped 3,000 customers that year,” said founder and chief executive Ruslan Kogan.

“So even though well over three million customers used Kogan in the last 12 months, we feel like we’re just getting started.”

During the first four weeks of the second half the business saw gross sales up 45 per cent and gross profit up 102 per cent.

And, according to Kogan, the business plans to invest in its logistics network with the aim of improving speed of delivery, range, and competition across its platform, and will pay a fully-franked interim dividend of 16 cents per share – though won’t provide earnings guidance for the half ahead.

While the business has seen massive grown its active customer base, it was also fined over $300,000 in January for breaching Australian spam laws – sending those customers over 42 million marketing emails that didn’t include the ability to unsubscribe.

The online marketplace is no stranger to fines, having been forced to pay $350,000 by the ACCC in December after an investigation found it had made false and misleading marketing claims about a tax time promotion in 2018.

Global e-commerce juggernaut Amazon has broken through the billion-dollar revenue mark in Australia after its sales doubled during 2020 as the COVID-19 pandemic fuelled a surge in online buying.

Financial records posted for the business late on Friday evening revealed Amazon Australia’s retailing arm, Amazon Commercial Services, reported $1.12 billion in net sales for the 2020 calendar year, a 99.4 per cent jump from the year prior.

Of this, $511 million is directly related to sales of goods from Amazon’s online store, more than double the $218 million recorded in 2019. This shows the online retailer has also seen a similar boost in customer numbers as other major Australian e-commerce sellers such as Catch and Kogan as locked-down shoppers took their spending online.

Investment from the retailer’s US parent company, labelled as ‘related party revenue’, grew 50 per cent to $371 million. This funded things such as Amazon’s new distribution centres in Sydney, Brisbane and Melbourne along with broader expansion expenses.

However, the level of investment has dropped on last year, where related party revenues comprised half of Amazon Australia’s total revenue, showing the local business is beginning to rely less on its parent company’s income.

Revenue from third-party sellers, which refers to Amazon’s marketplace business, jumped to $126 million. The retailer has also seen a successful uptake of its Prime subscription service, which provides free shipping along with access to various TV shows and movies, with revenue nearly tripling to $90 million for the year.

However, despite the surge in sales, the business still reported a loss for the year as expenses rose in tandem with sales. Amazon Australia’s net loss for the year came in at $3.8 million, a minor improvement on 2019’s $4.7 million loss. The company paid $18.3 million in income taxes.

Amazon spent more on marketing in 2020 and also spent nearly $100 million on short-term employee benefits. The cost of professional fees paid by the business also nearly tripled to $60 million.

The company’s status as a billion-dollar company will likely ruffle the feathers of other major Australian online retailers who have been dismissive of the business’ slow start in the region.

The retailer has been slowly but steadily improving its foothold in the local retail industry, announcing last year it was building a mammoth 200,000 square metre robotic fulfilment centre in Sydney’s west, which the company said would double its fulfilment capacity in Australia.

Last year also marked the first full year at the helm for Amazon’s new country manager Matt Furlong. Total executive remuneration for the year came in at $1.8 million.

In a statement, Amazon Australia confirmed its US parent was still investing significantly in the local offshoot and noted COVID-19’s impact on the business and the broader retail environment.

“Over the past year, our focus has remained on the health and safety of our people, helping customers stay home and safe by delivering products directly to their door, and supporting local communities and selling partners during this challenging time,” a spokesperson said.

Amazon’s US parent entity recently reported its fourth-quarter sales of $US125.6 billion ($163 billion), a 44 per cent rise on the same quarter in 2019. It also announced that founder and chief executive Jeff Bezos would be stepping down, handing the reins over to long-term executive Andy Jassy.

Online marketplace Asos has picked up the Topshop, Topman, Miss Selfridge and HIIT brands from the collapsing Arcadia Group.

The £265m deal sees the business pick up the four brands, which it sees as complementary to its own brand portfolio, and will be completed on the 4th February. The cost was paid entirely from Asos’ cash reserves.

“We’re extremely proud to be the new owners of the Topshop, Topman, Miss Selfridge and HIIT brands,” said Asos chief executive Nick Beighton.

“We have been central to driving their recent growth online and, under our ownership, we will develop them further using our design, marketing, technology and logistics expertise.”

The deal allows Asos to further boost its own-brand offer with “strong labels that resonate” with their core customers of 20-somethings, while also being able to reach a different market than its current offer.

The plan, according to Asos, is to integrate the four new brands into the business quickly, transitioning 300 workers from the brands across, and review the supply chain of each to ensure they comply with their own principles.

“Beyond this, we will work to maximise the opportunity for the brands’ global distribution,” Asos said.

For example, while the four brands’ main market is in the UK, Asos sees the opportunity for more international partnerships, such as a potential partnership with Nordstrom in the US in order to accelerate the wider group’s rollout in that region.

While these opportunities exist, Asos is expecting incremental sales in FY22 to be flat to FY20 acquired brand sales, as it focuses more on driving growth on its main marketplace platform.

The business is, however, expecting a double-digit post-tax return on capital in the first full year the brands are within its wheelhouse.