News

26 Nov, 2020
Accent Group avoids board spill, delivers sales growth
Inside Retail

 

Sales across Accent Group’s brands have grown 1.3 per cent in the first 20 weeks of the new financial year, while digital sales more than doubled.

Excluding the impact of Victoria and Auckland’s lockdowns like for like sales grew 15.7 per cent, and with the reopening of both cities trading is ahead of CEO Daniel Agostinelli’s expectations.

For all the good news, however, the board managed to avoid a spill after the business’ AGM delivered a second strike against its’ remuneration report.

Shareholders have expressed their unhappiness with Accent Group’s pay in recent years, with 54 per cent voting down the business’ remuneration report this year but 95 per cent voting against a spill.

“We’re pleased with the strong trade to date and delighted with the performance of our new stores in Stylerunner and Pivot,” Agostinelli said.

“Our plans are well set to capitalise on the important November cyber events, Christmas and back to school trading periods. Our integrated omnichannel model has allowed us to trade strongly through a highly disrupted period along with demonstrating operating capability to respond to store impacts that may arise due to Covid-19, including the current Adelaide lockdown.”

This lockdown, Agostinelli said, is unlikely to have a material impact on the company given its store footprint and demonstrated pivot to online – which has grown sales 129 per cent compared to last year.

Additionally, the business’ newest brands, Stylerunner and Pivot, are progressing well. Stylerunner has launched its first store, with an additional 3 stores to come, while Pivot has launched 3 and has an additional 15 on the way. 

In total, the business expects to launch 80 new stores, including new concepts, in FY21.

26 Nov, 2020
RipCurl balances out struggling Kathmandu in first quarter
Inside Retail

 

Outdoor fashion group Kathmandu has seen group sales for the first quarter of FY21 72 per cent above last year, benefiting from the addition of RipCurl to its staple of brands.

The surfwear brand, which was acquired in October 2019, largely offset the negative impact felt by Kathmandu. RipCurl’s same store sales rose 26.8 per cent for the period, while Kathmandu fell 26.8 per cent due to falling CBD foot traffic and the impact of Melbourne’s and Auckland’s respective lockdowns.

The result shows the strengths of a newly diversified group, said Kathmandu Group CEO Xavier Simonet.

“We’re realising the benefit… with strong performance in summer weighted product categories for RipCurl in all key geographies following successful winter trading for Kathmandu,” Simonet said.

“The group continues to maintain a strong balance sheet and liquidity position, allowing it to respond to current trading conditions and pursue attractive growth opportunities that may arise.”

RipCurl saw strong sales in its key markets of Australia, Europe and North America, while Kathmandu enjoyed strong sales in camping and footwear – though not enough to offset falling travel related purchasing.

Footwear brand Oboz was also strong, according to Simonet, with forward ordering tracking above pre-Covid levels.

However, Simonet was quick to add that Kathmandu Group’s half year result will be highly dependent on the all-important holiday period, and that dividend payments may resume depending on the next few months’ market conditions.

 

26 Nov, 2020
Funtastic’s Toys ‘R’ Us acquisition complete, looks to accelerate growth
Inside Retail

Toy wholesaler Funtastic has completed its acquisition of Hobby Warehouse, Toys ‘R’ Us, Babies ‘R’ Us, and Mittoni, with shareholders voting overwhelmingly in favour the transaction.

As of Thursday 26 November, Louis Mittoni will take up the position of managing director and chief executive of the combined company, with Kevin Moore acting as chairman and former director and chairman Bernie Brookes stepping down.

Mittoni previously said this was the next phase of Toys ‘R’ Us’ relaunch, and now said the wholesale operations of Funtastic and Mittoni Technologies will support the businesses future.

“This is an exciting day for both businesses, particularly as we head into the busiest period of retail trading with Black Friday, Cyber Monday and of course, Christmas shopping,” Mittoni said.

“Toys ‘R’ Us is now one of the fastest growing online retailers in ANZ and we will now look to accelerate that growth in 2021 with further expansion plans, plus the commencement of Babies ‘R’ Us.”

The next stage of Toys ‘R’ Us’ relaunch involves building new physical and digital logistics, as well as innovative, experiential retail stores.

Last year, a Toys ‘R’ Us spokesperson told Inside Retail the business would launch several large-format bricks and mortar stores, followed by a number of smaller footprint ‘retail-lite’ stores.

“All stock is on the floor, there’s no storage space out the back. It’s impulse items under $30 for sale there, and anything over $30 is buy-in-store, ship-to-home,” the spokesperson said.

“[But] every time you open a store, you’ve got to have a very clear mindset to say we’re going to commit five years of rent as a liability on the balance sheet, which will prevent me from using my working capital for other things – buying new products, advertising, employing people. “You have to be very clear as to why you’re going to open stores. They must have an absolute purpose.”

25 Nov, 2020
Harvey Norman profit explodes 160 per cent
Inside Retail

Harvey Norman has seen its unaudited profit explode 160 per cent between July and October to $341.11 million, compared to $131.17 million for the same period of last year.

Additionally, aggregated sales jumped 28.2 per cent between July and November, with all regions barring Singapore and Malaysia showing sales growth for the period.

Australian stores saw sales growth of 30.4 per cent for the six months, though this doesn’t take into account the relevant impact of store closures across Victoria and South Australia.

Likewise, New Zealand saw an increase of 20.4 per cent in local currency for the period, though this also lacks the impact of store closures in Auckland.

The most impressive gain was seen in Ireland, however, which saw aggregated comparable sales jump 52.7 per cent for the period.

The result follows a period of growth for the entire homewares sector, with mandated lockdowns forcing customers to spend more time in their homes and feeling the itch to redecorate. Executive chairman Gerry Harvey noted the opportunity early on in the Covid-19 pandemic, and was later forced to clarify that he didn’t intend to downplay the health risks.

“Now, everyone thinks I’m this callous old bastard out making a profit on other people’s misery … but believe me, that was not my intention,” Harvey told The Sydney Morning Herald and The Age.

20 Nov, 2020
Shoppers return to Vicinity malls as Melbourne lockdown ends
Financial Review

The long-awaited reopening of Melbourne has boosted prospects for ASX-listed Vicinity Centres, which confirmed at its annual shareholder meeting it will pay an interim distribution for its 2021 financial year.

Along with other mall owners including Westfield operator Scentre, Vicinity's stock rode higher this week on news of a breakthrough in a vaccine for the coronavirus.

 

An artist's image of the eight-storey, 15,000-square-metre office building approved for Vicinity's Bayside mall in Melbourne. 

Vicinity's portfolio is more weighted to Victoria than some of its peers, and has felt the effect of the long second lockdown imposed on Melbourne, which began easing at the end of October.

Chief executive Grant Kelley told shareholders at a meeting conducted online on Thursday that most of Vicinity's Melbourne retailers began reopening from October 28 and Victorians had been quick to return to shopping centres, "displaying considerable pent-up demand".

"In the final week of lockdown, centre visitation was 39 per cent of the prior year," he said.

"In the week just gone, this has increased to 77 per cent of the previous year.

"We remain confident that visitation across our Victorian centres will continue to rebound, just as we have observed in other markets in Australia where the virus has largely been contained."

As flagged in its September quarter update, Vicinity's cash collection as a percentage of billings stood unchanged at 56 per cent over the quarter. Excluding Victoria and its CBD centres that rate rises to 76 per cent.

"Assuming no further waves of the pandemic, we expect cash collection rates to continue to improve, particularly following the reopening of our Melbourne retailers," Mr Kelley said on Thursday.

Vicinity has not provided earnings guidance for fiscal 2021 but said it does intend to pay a interim distribution this half. No distribution was paid in the second half of the 2020 financial year, due to the disruption of the pandemic.

"Through the extraordinary efforts of all Australians and most recently those in Victoria, we now have very low COVID-19 case numbers nationally," Mr Kelley said.

"Centre visitation across our portfolio continues to rebound, and we expect this trend to continue as travel restrictions lift, office workers gradually return to CBDs and general economic conditions improve."

During the disruption, Vicinity has been quietly getting its development pipeline into shape, submitting plans and winning approvals for a seriesof projects that could significantly diversify its portfolio through the addition of office space, serviced apartments and even residential towers.

Those plans include major redevelopments at its Box Hill and Bankstown malls, along with approvals for further development at Chadstone, including a nine-storey office building. As well, last month it won approval for an eight-storey, 15,000-square-metre office building at its Bayside centre in Melbourne.

20 Nov, 2020
Decathlon automating warehouse operations to “more than double” productivity
Inside Retail

Sporting goods retailer Decathlon has partnered with logistics business DHL Supply Chain to automate its Sydney warehouse, with the aim of effectively doubling productivity.

In the warehouse a number of Goods-to-Person robots will be deployed, which are capable of moving at speeds of close to one metre per second, and will enable human workers to dispatch up to 144 customer orders per hour.

The process is being handled by Körber, the same technology firm that is working with Wesfarmers to bring automated fulfilment to Catch Group.

The robots will additionally be able to navigate the warehouse autonomously, and can support a range of picking strategies, minimising manual labor and errors. And while the partnership will begin with these robots only in the Sydney facility, Decathlon already has plans to bring them to other warehouses around the country.

“The pandemic brought with it a surge in e-commerce demand, particularly for sporting goods as gyms and fitness facilities around Australia were forced to stop trading,” said Decathlon Australia chief executive Olivier Robinet.

“We have more than 15,000 SKUs in this fulfilment centre, so we need an innovative and practical solution that could scale up our ability to fulfil customer orders without prohibitively increasing variable costs.”

The solution was automation, Robinet said.

DHL Supply Chain ANZ chief executive Saul Resnick noted the pandemic has put significant pressure on all retailers’ supply chains, and it has become the business’ propriety to work with their customers to build more resilient and stress-resistant supply chains moving forward.

“Robotics and automation are incredibly important technologies that can make our customers’ operational processes more flexible, but they also create a better and safer working environment,” said Resnick.

Decathlon aren’t the first business bring automation into the fold following the nationwide stress-test caused by Covid-19, with eStore Logistics’ $40 million investment into automated fulfillment and Woolworths partnering with Knapp bringing robot-driven fulfilment to the forefront.

20 Nov, 2020
Retail sales point to stronger September GDP
Financial Review

Retail sales volumes posted their biggest quarterly percentage gain since records were kept in 1983 and are expected to contribute as much as 1.4 per cent points to GDP growth in the September quarter.

All states and territories other than Victoria saw sales rebound in the third quarter and some economists expect consumption to be even stronger because of spending in reopened services, little of which shows up in official retail data.

Retail trade figures make up about 35 per cent of overall consumption, but only about 10 per cent of the retail trade figures are services.

JPMorgan economist Tom Kennedy thinks the lack of retail services data in official figures could be hiding a boost to consumption in the third quarter.

"Australia’s retail report is heavily skewed toward goods consumption, so overlooks much of the rebound experienced across the services sector since mid-year," Mr Kennedy said.

"As such we expect growth in the broader National Accounts measure of consumption to outpace today’s outcome," he said.

BIS Oxford Economics Sarah Hunter said the figures would see retail trade add around 1.4 per cent points to GDP growth in the September quarter.

"This confirms that outside of Victoria, where volumes fell 4.2 per cent as a result of the lockdown, the recovery in household spending is well underway," she said.

Retail sales did slip 1.1 per cent in the month of September in seasonally adjusted terms, according to the Australian Bureau of Statistics. However, at $29.1 billion for the month, they remain well ahead of the $27.6 billion in September last year.

ABS' director of quarterly economy wide surveys, Ben James, said falls in the September month were led by household goods retailing down 3.6 per cent and food retailing down 1.5 per cent.

There were rises in cafes, restaurants and takeaway food services, up 3.5 per cent, and department stores, up 1 per cent.

Economists say it is still too early to see the impact of looser restrictions across Victoria, although this opening up is likely to disproportionately lift the services-related components of the retail report, such as cafes, in the upcoming October and November releases.

Citi chief economist Josh Williamson said a "normalisation of retail trade is under way".

"Mobility and early spending indicators portend further increases," he said.

"We continue to believe that the odds of a fiscal cliff moment in Australia remain low. A high savings rate in the June quarter and September quarter will help smooth consumption over in the December quarter as the Victorian economy and state borders reopen.

"The pent-up demand heading into the Christmas-period bodes well for retailers."

This week Gerry Harvey, the executive chairman of the $5.5 billion Harvey Norman, labelled the RBA's record rate cut as ''overkill''.

"The goods we have in our stores are selling like crazy, like never before,'' Mr Harvey said.

The RBA now expects GDP growth of 6 per cent in the year to June 2021, up from 4 per cent.

Payroll data released on Wednesday showed a dip in the jobs recovery, but the volatile numbers reflect the usual weakness in jobs for September and October and could find a further boost as Melbourne's reopening starts to steadily filter through to the local economy.

Total payrolls declined 0.8 per cent in the two weeks to October 17 and were down across every state and territory.

Westpac's Justin Smirk noted that momentum did improve, citing the 0.9 per cent drop in the week ended October 10 meant the week ended October 17 must have been a 0.1 per cent gain.

"It is worth noting the only age group to see a lift in employment was the under 20s, which are up 4 per cent in the month to October 17 and 10.1 per cent higher than pre-COVID levels – the only age group to be so," Mr Smirk noted.

20 Nov, 2020
DoorDash to deliver goods from The Reject Shop within a day
Inside Retail

Australian discount variety store The Reject Shop has teamed with DoorDash to offer a same-day goods-delivery service. 

The Reject Shop has diversified over the years to expand its offer from general merchandise into low-priced essential products, including grocery, snacks, pet care, garden, party wares, cleaning supplies, toiletries and other household items. Customers now can order from its stores via the DoorDah app, with orders delivered in as little as 45 minutes.

“The DoorDash partnership allows The Reject Shop to trial an online offering quicker than we planned and with minimal capital investment,” said Andre Reich, CEO of the retailer.

“It is a customer-centric offering that provides new and existing customers with a choice around how they wish to shop with us, which has become increasingly important this year.”

According to the company, the collaboration marks DoorDash’s largest retail partnership in Australia on its marketplace. Both brands plan to expand the number of stores that offer online same-day delivery with South Australia coming online from this month.

To celebrate the partnership, customers within range of the 120 The Reject Shop stores will enjoy free delivery for orders from $20. The promotion will last until November 8.

20 Nov, 2020
Seafolly launches new Summer collection using recycled nylon
Inside Retail

After a year involving voluntary administration, buying up businesses and naming a new CEO, Seafolly has unveiled its Summer 2020 collection – including ranges printed on sustainably recycled nylon.

The swimwear collection leans into 70’s styles, animal prints, vintage florals and retro colours, though a number of its pieces use nylon sourced from plastic-recycling firm Reprieve, which transforms recycled plastic bottles into fibers for use by brands such as Seafolly, Fitbit, Ford, Kathmandu and Patagonia.

At the time of writing, Reprieve has pulled and recycled over 23 billion bottles.

“We are really proud of our team who have been pushing the boundaries on product and design for the new season at Seafolly,” said Seafolly’s new CEO Brendan Santamaria, who stepped up into the role in September after the business’ brush with voluntary administration.

“We are on a journey to enable all women to feel confident at the beach and our ethos is all about creating innovative swimwear that celebrates the modern Australian woman.”

Santamaria said his aim in taking up the role was to bounce the brand back and pave the way for a post-Covid-19 recovery – adding that now is the time to shake up the way things are done at Seafolly.

While this isn’t the first time the business has used sustainably-sourced fibers in its swimwear, Seafolly is making a concerted effort to offset the 8 million tons of plastic that enter the ocean each year, which could help it to reach a customer that is increasingly value-led.

And, heading into a Christmas where it’s expected customers aren’t likely to follow their normal buying behaviours after months of uncertainty created by the Covid-19 pandemic, that could make the difference.

18 Nov, 2020
Target welcomes new MD as Marina Joanou moves on
SOURCE:
Ragtrader
Ragtrader

Target Australia has welcomed a new managing director as Marina Joanou steps back from her role.  

Stepping back to take a period of leave before determining her next role within Wesfarmers, Joanou has been succeeded by Richard Pearson, who joined the Kmart Group in September 2020. 

Joanou served over two years as the MD of Target, with Wesfarmers stating that she was crucial in the realignment of its strategy. 

"Ms Joanou’s leadership has helped steer Target through considerable change over the course of this year and she has played a significant role in resetting the Target strategy," Wesfarmers said. 

Pearson brings more than 20 years of retail and consumer goods experience to Target, having previously served as ASDA, Coles and Mecca. 

The news comes as Target reports -2.2% total sales growth for Q1 FY21. 

18 Nov, 2020
Fantastic Furniture worth up to $959m: IPO sponsor brokers
Financial Review

Greenlit Brands' plans to re-list Fantastic Furniture are a step closer to fruition.

The company's sponsor brokers Macquarie Capital and Credit Suisse fired off pre-deal investor education reports to fund managers on Friday morning, valuing the furniture retailer.

Credit Suisse's valuation was the chunkier one out of the pair, and its analysts said Fantastic was worth between $762 million and $959 million. Those numbers were based on an enterprise value to EBIT multiple between 10.2 times and 12.9 times.

Fantastic is forecast to post $74.5 million earnings before interest and tax in fiscal 2021.

Macquarie's valuation was much less bullish and in fact the top end of its valuation range fell below the bottom end of Credit Suisse's.

The silver donut's analysts said Fantastic was worth between $435 million and $669 million on an enterprise value basis, based on an earnings multiple between 6.5 times and 10 times.

"In setting the range we considered Fantastic Furniture's high online sales penetration relative to the sector and a track record of consistent revenue growth and market share gains in recent periods," the analysts said.

Both brokers identified COVID-19 as presenting a risk to their valuations and Fantastic's business. Other risks included competition and supply chain disruption.

The pre-deal reports come almost a month since Credit Suisse and Macquarie took a select bunch of fund managers on half-day site tours at some of Fantastic's New South Wales-based facilities and about five months since Greenlit Brands called for pitches from investment banks to float Fantastic.

18 Nov, 2020
'Life will go on' – Universal Store sales surge but ASX debut a fizzer
Financial Review

Alice Barbery, the chief executive of youth fashion retailer Universal Store, was sanguine about the retailer's less than illustrious $280 million debut on the Australian stock exchange on Monday.

Universal Store shares, issued at $3.80, were poised for a strong debut after the retailer revealed same-store sales had surged 33 per cent over the last seven weeks. But by the close of trade not a single share had changed hands after the worst ASX outage in four years.

"This is hardly the world's greatest disaster in the scheme of things," Ms Barbery told The Australian Financial Review. "Whether we're trading today or trading tomorrow, we're here for the long term.

 

Universal Store CEO Alice Barbery: "Whether we're trading today or trading tomorrow, we're here for the long term."  Attila Csaszar

"I'm not going to lose my mind over one day," she said. "It's 2020 – people have had bushfires and lost houses and lost lives with coronavirus," said Ms Barbery, who lost her own home in the Brisbane floods in 2011.

"I can hardly hold my breath and turn blue because of this – it will bounce back tomorrow and life will go on."

Shareholders in the Brisbane-based youth apparel retailer took advantage of a COVID-19-inspired surge in spending to sell down their stakes in the retailer, two years after buying the business from founders Michael and Greg Josephson.

Brett Blundy's BB Retail Capital, Trent Peterson's Catalyst Direct Capital Management and Adrian MacKenzie's Five V Capital originally planned to float Universal Store in March or April 2020 but pulled the plug when the pandemic forced non-essential retailers to close their doors in the first national lockdown.

Universal Store's sales dropped during the pandemic, enabling the retailer to claim JobKeeper subsidies, but same-store sales, which have risen by an average 13 per cent a year for the last six years, accelerated as stores reopened.

We're constantly seeing the restrictions lifting around the country and people are enthusiastically getting out and about.

— Alice Barbery, chief executive, Universal Store

Ms Barbery, who took the helm in 2017 after seven years as chief operating officer, said that based on unaudited management accounts for September, Universal Store had met the proforma September quarter revenue, earnings and net profit forecasts in the prospectus.

The group, chaired by former Super Retail Group CEO Peter Birtles, had forecast September-quarter revenues to grow 16.5 per cent to $45.8 million, underpinned by same-store sales growth of 26.2 per cent and online growth of 100 per cent. Earnings before interest and tax were forecast to double to $10.6 million – boosted by $3.4 million in net JobKeeper benefits – and net profit was expected to rise 103 per cent to $7.3 million.

Ms Barbery said Universal Store's target customers were spending money on fashion and accessories they otherwise would have spent on festival and concert tickets and overseas travel.

"We're constantly seeing the restrictions lifting around the country and people are enthusiastically getting out and about," she said.

"A new outfit makes you feel good about yourself and there haven't been too many things to feel good about this year."

Universal Store's core demographic – fashion-forward 15-to-34-year-olds – have been hard hit by the pandemic but many customers received JobKeeper and JobSeeker subsidies, which will fall away in March.

"March is a long way off and it's hard to know what the world will look like, but the bulk of people who were getting JobKeeper have come off already and our October results demonstrated we're still the recipients of good customer sentiment," Ms Barbery said.

Universal Store raised $147.8 million at $3.80 a share, $38.4 million in primary issuance and a $109.4 million sell-down by existing shareholders, in the third largest IPO this year after Adore Beauty and Home Co daily Needs REIT.

BB Retail Capital reduced its stake from 38 per cent to 16.4 per cent, Five V Capital from 14.8 per cent to 6.4 per cent, Ray Itaoui's Mountainview Trust from 14.3 per cent to 6.2 per cent and Catalyst from 3.6 per cent to 2.15 per cent. Other shareholders include the management team with 9.4 per cent and the Myer Family Investment office with 3.1 per cent.

The remaining proceeds will be used to repay corporate debt, lift cash holdings, and pay transaction costs associated with the offer.

Ms Barbery said the retailer, which has 65 stores, planned to open five new stores a year, in line with its long-term average, but might open more if landlords were prepared to write good deals.

Universal Store differentiates itself from rivals such as Premier Investments' Dotti, Portmans and Just Jeans chains, General Pants and Myer by stocking exclusive products, selling private-label brands such as Perfect Stranger, Luck & Trouble, Common Need and Token, and exclusive ranges sourced from third-party brands such as Herschel, Abrand, Wrangler and Converse.

It emulates fast-fashion chains by delivering new stock into stores daily and using short-run buying cycles to encourage shoppers to buy quickly or risk missing out.

Sales have risen at a compound annual rate of 25 per cent over the past five years, reaching $155 million in 2020, and earnings before interest and tax have risen 32 per cent a year over the past three years, reaching $24 million in 2020 (including $5.1 million in JobKeeper subsidies).

18 Nov, 2020
Gen Z is set to take over the economy in a decade, despite potentially losing $10 trillion in earnings because of the pandemic
Business Insider Australia

In a little over a decade, Gen Z will be taking over the economy.

Gen Z currently earns $US7 trillion across its 2.5 billion-person cohort, according to a Bank of America Research primer on the generation, called “OK Zoomer.” By 2025, that income will grow to $US17 trillion, and by 2030, it will reach $US33 trillion, representing 27% of the world’s income and surpassing that of millennials the following year.

The report defines Gen Z as those born between 1996 and 2016. The oldest of Gen Z turn 23 in 2020, and the oldest millennials turn 39 this year. The youngest generation has the fastest-growing income, per the report, led by the US, closely followed by China.

This earnings growth is short of what it would be without the pandemic, of course. Gen Z students could lose $US10 trillion of lifecycle earnings due to Covid lockdowns, the World Bank has estimated.

Repeating millennials’ rocky career paths

American Gen Zers and millennials have been financially hardest hit in the coronavirus recession, suffering from unemployment rates greater than those during the peak of the Great Recession. But Gen Z is repeating the same rocky start to their careers as the oldest millennials: graduating into a recession.

Stanford research shows that recession graduates typically see stagnant wages, lasting for up to 15 years. The author behind this research, Hannes Schwandt, assistant professor at Northwestern University’s School of Education and Social Policy, previously told Business Insider that this the delay in wealth accumulation isn’t necessarily due to lack of jobs, but that recession graduates typically start at “lower quality” jobs.

A potential upside to this, Schwandt said, is that graduates job-hop to play financial catch-up, which can make them more flexible and help advance their career.

“Over time, what you see in these cohorts is a higher degree of mobility from one employer to the next,” Schwandt said. “It helps them climb up the quality ladder.”

Gen Z may want to look to millennials for an idea of what’s to come, as the so-called “job-hopping generation” graduated into the 2008 financial crisis, then entered the 2020 recession before their oldest members turned 40 years old. Now, before the economy has even recovered from the effects of the pandemic, millennials have just another decade left as the major driving force of the economy.

12 Nov, 2020
Rent collection rises as more Westfield stores open
Financial Review

Westfield operator Scentre's rent collection rate hit 96 per cent last month as more stores opened across its national portfolio of malls, including in Victoria.

The retail landlord collected 85 per cent of its gross rental billings over the September quarter, with the proportion rising progressively each month, according to Scentre's quarterly update.

The improving rent collection follows a bitter stand-off between the powerful landlord, led by Peter Allen, and some of its largest retailers during the height of the pandemic disruption. The dispute at one point prompted Scentre to close dozens of stores operated by Mosaic Brands and Strandbags in its Westfield malls.

Some 92 per cent of retailer stores across the 42 Westfield malls around the country are open including in Victoria. Scentre expects more stores in Victoria to reopen over the coming weeks.

Excluding Victoria, comparable speciality in-store sales – a key metric watched closely by analysts – were down 1.9 per cent over the September quarter.

Scentre did not release a year-on-year result but the September result was an improvement on the half-year result which showed speciality sales were down 12.1 per cent over that six month period.

Also doing better were comparable in-store sales for the major retail tenants which were up 1.0 per cent over the third quarter.

Macquarie analysts noted that Scentre's continued rent collection meant that the total amount of cash shortfall – the rent not collected – was flattening.

However, the analysts also seized on the occupancy rate of 98.4 per cent, noting it had dipped around 40 basis points lower than three months earlier.

"While occupancy has been largely maintained, we expect continued pressure as support programs conclude," the analysts wrote in a client note on Thursday.

"There are some positive items in today’s update, namely cash collection," they wrote.

"However, other indicators such as the increase in vacancy and shortfall in speciality sales in NSW are the key negative items in our view."

The shopping mall's guidance remains withdrawn, after it pulled its outlook in March, during the initial onslaught of the coronavirus.

On Thursday, the listed landlord reaffirmed that its intention was to pay a distribution early next year from surplus net operating cash flows received during 2020.

In September, Scentre raised $US3 billion ($4.01 billion) through a hybrid debt issue to bolster its battered balance sheet, the first such issuance of a debt hybrid by a property trust since the global financial crisis.

12 Nov, 2020
Rent collection rises as more Westfield stores open
Financial Review

Westfield operator Scentre's rent collection rate hit 96 per cent last month as more stores opened across its national portfolio of malls, including in Victoria.

The retail landlord collected 85 per cent of its gross rental billings over the September quarter, with the proportion rising progressively each month, according to Scentre's quarterly update.

The improving rent collection follows a bitter stand-off between the powerful landlord, led by Peter Allen, and some of its largest retailers during the height of the pandemic disruption. The dispute at one point prompted Scentre to close dozens of stores operated by Mosaic Brands and Strandbags in its Westfield malls.

Some 92 per cent of retailer stores across the 42 Westfield malls around the country are open including in Victoria. Scentre expects more stores in Victoria to reopen over the coming weeks.

Excluding Victoria, comparable speciality in-store sales – a key metric watched closely by analysts – were down 1.9 per cent over the September quarter.

Scentre did not release a year-on-year result but the September result was an improvement on the half-year result which showed speciality sales were down 12.1 per cent over that six month period.

Also doing better were comparable in-store sales for the major retail tenants which were up 1.0 per cent over the third quarter.

Macquarie analysts noted that Scentre's continued rent collection meant that the total amount of cash shortfall – the rent not collected – was flattening.

However, the analysts also seized on the occupancy rate of 98.4 per cent, noting it had dipped around 40 basis points lower than three months earlier.

"While occupancy has been largely maintained, we expect continued pressure as support programs conclude," the analysts wrote in a client note on Thursday.

"There are some positive items in today’s update, namely cash collection," they wrote.

"However, other indicators such as the increase in vacancy and shortfall in speciality sales in NSW are the key negative items in our view."

The shopping mall's guidance remains withdrawn, after it pulled its outlook in March, during the initial onslaught of the coronavirus.

On Thursday, the listed landlord reaffirmed that its intention was to pay a distribution early next year from surplus net operating cash flows received during 2020.

In September, Scentre raised $US3 billion ($4.01 billion) through a hybrid debt issue to bolster its battered balance sheet, the first such issuance of a debt hybrid by a property trust since the global financial crisis.

5 Nov, 2020
Tory Burch invests in APAC region with new appointment
SOURCE:
Ragtrader
Ragtrader

American luxury label Tory Burch has named Thiabault Villet as its new president for APAC. 

Villet's role will commence on December 28 and he will oversee all aspects of the brand’s operations in the Asia-Pacific region, reporting to CEO Pierre-Yves Roussel. 

Tory Burch recognises the region as a key market, having opened its first APAC boutique in 2010 and growing to 146 free-standing stores across China, South Korea, Southeast Asia and Australia.

Speaking on the announcement, Roussel said that Villet's appointment demonstrates the brand's commitment to the region. 

"The development of our business in Asia is a strategic priority for us.

"Recruiting an executive with Thibault’s depth of experience is a testament to our continued commitment to the region.

"His entrepreneurial mindset and impressive track record in our industry make him a natural fit and a welcome addition to our team.

"I look forward to working with him," he said. 

Villet joins the business from One in Beauty the entity combining the Revlon and Arden brands, where he served as Asia president. 

During his tenure at One in Beauty, Elizabeth Arden became the number seven prestige brand on China e-commerce platforms, with Villet spearheading the digital transformation of the brand in the region.

Prior to One in Beauty, Villet was chairman and co-founder of Mei.com, a Chinese luxury and fashion flash sales retailer that was acquired by Alibaba in July 2015.

Earlier in his career, he was the first Greater China president at Coach and vice president of the Luxury Products Division for the L’Oreal Group in Japan and in China. 

Speaking on his appointment to Tory Burch, Villet said that he is excited to commence his new role. 

"I have long admired Tory Burch as a purpose-led company, for its iconic, beautiful designs and for the superior quality of its products.

"The company’s growth in the APAC region has been impressive, and I am excited about working with the team and building on the brand’s extraordinary strengths," he said. 

Tory Burch operates two boutiques in Australia at Westfield Bondi Junction and Westfield Sydney, as well as an Australian website. 

4 Nov, 2020
Myer board, CEO in Lew's sights after chairman resigns
Financial Review

Near the end of a horror year marked by the coronavirus pandemic, Myer is facing more disruption after billionaire retailer Solomon Lew forced chairman Garry Hounsell to fall on his sword and called on the entire board to step down or be sacked.

Mr Hounsell resigned hours before the annual meeting on Thursday after Mr Lew's Premier Investments, which owns 10.8 per cent of the stock, and fund manager Geoff Wilson's Wilson Asset Management (WAM), which owns 7.8 per cent, indicated they would vote against his re-election.

Mr Hounsell's resignation was a major victory for Mr Lew, who has been attempting to take control of the board since Premier bought a 10.8 per cent stake at $1.15 a share three years ago. The shares have fallen to 22¢.

Unappeased, Mr Lew said Mr Hounsell's ousting was a signal to the entire Myer board – including chief executive John King – that its time was up and directors should step aside or face being kicked out at an extraordinary general meeting.

"Garry Hounsell’s resignation ahead of today’s Myer AGM is the 'green shoot' that Myer shareholders have long been waiting for," Mr Lew said.

Myer also suffered another strike against its remuneration report, with 33.6 per cent of shares voted against it. The retailer incurred a second strike against its remuneration report in 2018, but avoided a board spill, and narrowly avoided a third strike in 2019.

JoAnne Stephenson, a former KPMG partner who joined the board four years ago, has been appointed acting chairman while a global search takes place to find a new chairman.

This will now allow Myer to benefit from clear air following a challenging period for the company.

— Geoff Wilson, Wilson Asset Management

However, Mr Lew said a worldwide search was a waste of shareholders’ time and money and he would consult with other shareholders to put together a new board with a majority of independent directors and an independent chairman.

"Myer is an Australian icon and it requires a board with proven Australian retail credentials and commercial experience, including key skills in property, information technology, e-commerce and logistics," he said.

Premier will seek to have at least one representative on the board, in line with its holding. Mr Lew's previous "dream team" consisted of former Myer Grace Bros managing director Terry McCartney and former UBS banker Tim Antonie – both of whom are Premier Investments non-executive directors –as well as Stephen Sewell, the former CEO of shopping centre owner Federation Centres.

The question now is whether Mr King and other directors will resign or whether Mr Lew will have to call an EGM and rally enough shareholder support for a board spill.

Mr Wilson said he did not support Mr Hounsell's re-election because Myer needed a circuit breaker but dismissed suggestions he too had lost faith in Mr King. WAM had no current plans to support an EGM.

"We are supportive of the Myer management team," he said. "We voted for the REM report and the granting of performance rights for Mr King."

Mr Wilson, who recently called on the retailer to shrink its board and directors fees, has been a vocal supporter of Myer in the past and had teamed up with former shareholder Investors Mutual to thwart Mr Lew's attempts to roll the Myer board in 2018. However, he had second thoughts about Mr Hounsell's re-election.

"This will now allow Myer to benefit from clear air following a challenging period for the company," he said.

Ms Stephenson said Mr Lew's campaign would be damaging for customers, the Myer brand and shareholders – "what Myer needs now more than ever is stability".

Myer shares fell 6 per cent to 22.5¢, suggesting that shareholders believe the retailer is facing yet another period of disruption.

Ms Stephenson said it was essential that Mr King and the management team were able to focus on the business during the peak trading period between Black Friday and the January stocktake sale.

Mr King defended his Customer First turnaround plan, saying it was the right plan but needed to be accelerated, re-sequenced and expanded to enable Myer to capitalise on opportunities in a COVID-normal world.

Myer was in new talks with landlords to reduce floor space by at least another 60,000 square metres after locking in similar reductions. About 21 stores could close over the next eight years.

Mr King said Myer was well-stocked for Christmas and its online business continued to grow strongly after jumping almost 90 per cent in the July-half. Online sales had grown even faster since July and he said they would soon be a $1 billion business.

He also dismissed reports that Myer had $340 million of net debt and risked going into administration, saying it was net cash positive, and a $340 million financing facility was an overdraft to meet its funding needs during peak trading periods.

"We believe the business is on the right footing for a new COVID-normal retail world."

Several shareholders at the AGM asked why Myer was not prepared to work with Mr Lew and Premier, and tap their expertise.

Ms Stephenson said the board was prepared to work constructively with shareholders when there was a positive intent to create value for them.

4 Nov, 2020
"They were all terrible": Honey Birdette to disrupt swimwear market
SOURCE:
Ragtrader
Ragtrader

Intimate apparel retailer Honey Birdette has ventured into the swimwear space.

The retailer has released a capsule range of swim pieces, with briefs starting at $79.95 and sets peaking at $249. 

Honey Birdette founder Eloise Monaghan said the range will disrupt the traditional swim market. 

"I went shopping and I just couldn't find a swimsuit I liked," she said.

"I went into several retailers and they were charging $100 just for a swimming top and they were all terrible."

The range features black, red and tiger print garments embellished with gold hardware. 

"This is about putting the sex back into swimwear. The prints out there at the moment - oh my God - what's with all the Fijian flowers? No-one's thinking about it," Monaghan said.

"No-one's putting detail into it, it's just churn and burn. Our range has those wet sexy looks that can control certain aspects of the body, and you can be confident in going from Bondi to a bar."

Details on the chlorine and salt water resistant microknit garments include gold eyelets and fox medallions. 

"We wanted to do something that was fairly decadent with big custom-designed buckles. Something that feels like HB but was designed to be seen rather than just being a functional piece," Monaghan said.

"The high bikini line is huge at the moment, but we wanted some control with it as well so we've used some fairly structural fabrics."

Honey Birdette briefly released a swimwear range previously, with Monaghan confirming the new venture has been better planned. 

"We didn't spend enough time on it last time, and it really takes 12 months to get the technical and the testing right," she said.

"We just went too quickly and I went too James Bond with it. There was too much neoprene, and it's a much lighter fabric palette these days."

She said the brand is keen to experiment with new product categories. 

"One day, swimwear for us could even be a whole new store concept with water running down the changeroom walls behind glass. But at the moment, it fits quite well within Honey Birdette."

And as for the demographic the new range will cater to, Monaghan said it's fluid.

"I don't think you can ever put an age on HB. I always get 'who's your demographic?' but I don't actually believe in demographics anymore," she said.

"The Honey Birdette customer can be an 82-year-old woman or a 17-year-old, a gay man or a transsexual. Our customers are so varied."

30 Oct, 2020
Super Retail flags multimillion online investment as sales skyrocket
SOURCE:
The Age
The Age

Super Retail Group is pumping more money into beefing up its online capabilities as the retailing collective prepares to better tackle the rising tide of digital-only sales.

In a trading update ahead of its annual general meeting on Wednesday, Super Retail said online sales had grown 132 per cent across its four brands for the first quarter of the 2021 financial year. Super Retail operates Supercheap Auto, Rebel Sport, BCF and Macpac.

As a result, the company told investors it now expects its capital expenditure for the year to be $100 million, with much of it focused on increasing online capabilities.

"The dynamic growth we have seen in our digital sales, through both click & collect and home delivery, has reinforced our conviction in our omni-retail business strategy," chief executive Anthony Heraghty said.

Super Retail’s shares ended Wednesday's session 4.8 per cent higher at $11.69 following the update.

Online retail has boomed amid the COVID-19 pandemic. Digital sales at each of Super Retail's brands have more than doubled since the end of June.

Total sales, which include in-store, rose 25 per cent across the group for the same period despite 94 stores being closed through Melbourne’s second lockdown. Sales were positive across all brands bar Macpac, which fell 2 per cent due to being "heavily impacted" by the lockdown.

While the company did not provide any update on its earnings, Mr Heraghty said a 2 per cent jump in gross margins, thanks to a reduction in discounting, had boosted Super Retail's bottom line.

"Our considered approach to promotional activity in response to strong levels of consumer demand - to help manage inventory in the leadup to Christmas and optimise gross margin - and the substantial fixed component of our cost base means that revenue growth has flowed meaningfully through to the bottom line," he said.

Despite the bullish trading update, the company only narrowly avoided a 'first strike' against its remuneration report at Wednesday's AGM. A total of 17.18 per cent of investors voted against the report, just shy of the 25 per cent required.

Proxy firm ISS had advised its clients to vote against the report due to excessive short-term bonuses it awarded to Mr Heraghty, especially considering Super Retail's $6.5 million claimed in JobKeeper. It also took issue with the lack of specific hurdles required for the awarding of bonuses.

Investors also protested the awarding of 239,440 performance rights to Mr Heraghty, with 20.9 per cent voting against the proposal. ISS labelled the grant as "discretionary and less-than-rigorous" and questioned its grant price of just $7.19.

30 Oct, 2020
GlamCorner receives $12 million funding boost
SOURCE:
Ragtrader
Ragtrader

GlamCorner has closed a $12 million series B funding round to accelerate growth and operations.

The fashion-rental business will use the funding to realise its dream of becoming the 'Netflix for fashion,' allowing customers to have access to an endless online wardrobe for a monthly subscription fee. 

GlamCorner will invest in its collection, expanding it from 28,000 articles of clothing to over 60,000 articles and will introduce new product lines and brands. 

The business will also expand its fulfilment and distribution footprint which will include a significantly larger warehouse and fulfilment centre, garment care, laundry operation and logistics teams.

The new laundry will be designed to preen and clean up to 250 tonnes of clothing per month. 

GlamCorner COO and co-founder Audrey Khaing-Jones said that the business is thrilled to reach this milestone. 

"We have been working towards this moment at GlamCorner for eight years now — the moment fashion rental becomes an everyday part of our customer’s wardrobe.

"We’re so excited to offer our customer a better deal and via a fulfilment and logistics capability large enough to realise our ambition to be an Endless Online Wardrobe for every woman in the country," she said. 

The business will invest in its growing subscription box rental service ('Netflix for fashion') similar to US company Rent the Runway.

This investment will see GlamCorner launch exclusive products in collaboration with local and international designer labels - amounting to the 'Netflix Originals' of fashion rental. 

GlamCorner's tech-platform and team will also receive a funding boost with the business set to invest in a native iOS app, which is currently in development, as well as further fulfillment automation and systems. 

The investment round was led by family-owned, responsible and sustainable investment group, Treïs. 

Airtree Ventures, Giant Leap Fund, Marshall Investments and Silicon Valley-based Partners For Growth have also doubled down on their previous investments in the company.

Peter Gammell and MediaCap Fund are new investors in the oversubscribed round, with this round bringing GlamCorner’s total funding to date to $18 million from some of Australia’s leading investors in this space.

"We are delighted to welcome such high-quality investors on board for our Series B who share our vision and see the scale of the opportunity in front of us," Khaing-Jones said. 

"Having the backing and endorsement of a family owned responsible and sustainable investment Group such as Treïs exemplifies our goal to create a generational shift in fashion consumption," she said. 

GlamCorner offers access to global and Australian leading designer brands including Zimmerman, KITX, Camilla & Marc, Thurley and Ginger & Smart.

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