News

Macpac sales increased by 15.3% to $176.8 million during FY22, driven by record June winter sales.

Like-for-like sales grew by 4.4% overall and by 8.5% in the second half.

In Australia, like-for like sales increased by 12.4% reflecting growth in rainwear and insulation apparel sales due to cold and wet weather.

In New Zealand, like-for-like sales fell 6.5% due to the impact of COVID-19 and reduced tourism and travel.

Sales of Macpac product in Rebel and BCF stores, both owned by parent company Super Retail Group, was expanded to over 200 outlets.

The move saw wholesale sales in this channel grew by 95%.

Online sales grew by 35% to $41 million, representing 23% of sales, while Click & Collect comprised 17% of online sales.

Group CEO Anthony Heraghty praised the result in a statement to shareholders.

“I am pleased to announce that the Group has delivered a strong set of financial results with another year of record sales.

"The successful execution of our omni-retail strategy, the Group’s enhanced digital capability, proactive supply chain
management, and an outstanding contribution from our team members were central to this performance."

Active club membership increased by 22% to 0.6 million, with club members representing 72% of Macpac total sales.

Macpac opened ten stores and closed one store, resulting in 85 stores for the financial year. 

At a time when bargains are top of the list for shoppers, analysts are watching fashion jewellery business Lovisa closely.

The Australian Securities Exchange-listed retailer has grown into a vast international network of bricks-and-mortar stores that offer statement pieces at a lower price than many high street jewellery brands.

While the business has grown, it’s also had to face lengthy COVID-19 lockdowns and interruptions over the past two years.

All eyes are on consumer spending in the lead-up to Christmas, and some stock watchers are using brands such as Lovisa as a barometer for consumer spending appetites.

As interest rates continue to rise and inflation affects the cost of everyday items, will younger shoppers still have an appetite for spending on accessories?

How it started: Founded in 2010, Lovisa was launched as a fashion jewellery retailer at a lower price point for consumers than speciality or department stores. The business, which was part of Brett Blundy’s BB Retail Capital, floated in 2014 with shares listed at $2 each.

How it’s going: The shares are up more than 750 per cent since listing, but the business has seen periods of heavy selling over the past few years, including March and April 2020, when pandemic lockdowns hit, and between April and June this year.

Industry: Fashion retail.

Main products: Fast fashion jewellery, in the $5 to $50 price range.

Key figures: Chairman Brett Blundy, chief executive officer Victor Herrero.

The bull case: Despite jitters about slowing consumer spending, recent retail figures have shown consumers still have cash to deploy, including into fashion and accessories. Clothing, footwear and fashion spending rose 1.3 per cent in June, hitting $2.9 billion.

Analysts say Lovisa, with its network of hundreds of stores across Australia and overseas, is well-placed to capture this spending enthusiasm.

“We expect the strong sales recovery and international store rollout to remain significant tailwinds for Lovisa over the medium term, driving solid earnings growth,” Jarden analyst Wilson Wong said in a research note to clients earlier this month.

Wilson Asset Management portfolio manager Oscar Oberg says companies that offer fashion for events are well-placed in this environment.

“It’s now about those companies who are exposed to ‘going out’ apparel – dresses, suits, jackets and that kind of retail,” he told The Age and The Sydney Morning Herald a fortnight ago, citing Lovisa as a potential winner from this trend.

The bear case: Lovisa shares are down 2.9 per cent so far this year and declined to $12.89 in June, amid a broad sharemarket sell-off. They are changing hands for about $19.40 this week.

Company watchers who are more cautious about the stock are asking whether it can maintain sales momentum if consumer spending slows further.

UBS downgraded its rating on the stock to “neutral” this month, noting that a bounce-back in the share price over the past month in the lead-up to its full year financial results makes the risk/reward trade-off less compelling.

Then there are the rising costs of doing business, which are impacting margins for retailers across the board.

“Near-term headwinds for Lovisa include labour and supply chain costs, yet we expect these can be well managed with scale and price optimisation, e.g. promotional bundles, re-ticketing,” UBS analyst Shaun Cousins wrote.

Lovisa is also looking to grow its global store footprint, but has warned investors this has been slower than expected in the first half of the year because of COVID-19 interruptions and labour shortages.

Jarden’s team says it will wait for an update on how new store rollouts are performing.

“We estimate Lovisa added 39 net new stores in 2H22E, which implies 22 net new stores from May to June 2022,” Wong and his team said.

Online marketplace giant Amazon Australia has launched free next-day delivery for Prime members living in Sydney and Melbourne, but has kept its membership fee steady as it seeks to lure more shoppers to its platform.

Amazon made a $500 million investment in its recently opened robotic fulfilment centre in Sydney’s west that spans 200,000 square metres, helping it to meet this next-day delivery milestone.

From the Kemps Creek site, products can reach 80 per cent of the population within a 12-hour drive.

Prime members within the majority of postcodes of the two cities will get free one-day delivery on eligible items, with no minimum spend. This is all about acquiring more customers as quickly as possible as rivals Wesfarmers and Woolworths ramp up their marketplaces.

Australian consumers are demanding what markets such as the US and Britain already have: good prices and fast delivery. But it is not easy, given Australia’s low-density population and costly last-mile delivery.

Amazon Australia country manager Janet Menzies said customers’ feedback was that next-day delivery was “a really important breakpoint”, and hinted that she would like eventually to offer same-day delivery.

“We’re really confident that our customers will respond positively to next-day delivery. For us, it’s all about the value of Prime – it just needs to be great. And I think people expect fast delivery,” she told The Australian Financial Review.

“Never say no, never say no [to aiming for same-day delivery]. But you need the fulfillment network that can set that up.”

Lower membership cost

Ms Menzies said she would look to extend Prime’s next-day delivery offer beyond the major metros in coming months.

It is estimated there are now more than 2 million Prime members in Australia, just a fraction of its global 200 million-plus members, who get access to exclusive shopping events such as the recent Prime Day and to streaming services.

Roughly 20 per cent of the British population has Prime and 45 per cent of the US population are members.

Amazon reached about $3 billion gross transaction value (GTV) in the 2021 calendar year, which includes third-party sales. MST Marquee head of consumer research Craig Woolford estimates that if Amazon achieves its US or British penetration in Australia, it will have $27 billion to $40 billion in GTV.

Prime in Australia costs $6.99 a month, significantly below the US rate of $US14.99. Amazon earlier this year lifted the membership fee in the US and most European markets as it battles higher costs, but has yet to do so in Australia as it builds out its offer.

Amazon has been criticised previously for not having top brands. Last year it signed up Apple.

Ms Menzies said Amazon continued to scout the latest brands and aimed to beat out rivals and get them on the site fast.

She said Amazon could offer customers top delivery speed because it built six fulfilment centres and delivery stations close to where customers lived and worked.

Amazon Flex (self-employed delivery drivers) would continue to grow, and Amazon would keep working with third-party delivery partners, she said.

Amazon also implemented delivery to more than 500 lockers and 400 counters – such as convenience stores and petrol stations – where customers choose where their order is delivered as part of its last-mile delivery offer.

Mr Woolford said Amazon would need to expand its same-day delivery service before lifting the Prime fee, and to achieve this it needed three to four times the delivery capacity it had today.

Amazon would disrupt local retailers over the next decade, he added, and questions remained over whether rivals Wesfarmers and Woolworths could lock in customers before Amazon’s encroachment.

“More importantly, how much cost and capital will they outlay? We are concerned the investment will be bigger than most investors expect,” he said.

How do you get customers back to your store after a two-year disruption? You give them a show.

That is the thinking at David Jones, which will host the first runway show at its Elizabeth St, Sydney, store in 50 years on Wednesday night. Five hundred of the department store’s most valuable customers will attend.

“We know customers want more experiential elements in store,” said David Jones chief executive Scott Fyfe. “When I started in the job, I was committed to bringing more experiences in store, a better assortment of Australian and international brands and improved customer service.”

Mr Fyfe became CEO of the company in October 2020, amid widespread COVID-19 lockdowns. Back then, the idea was to “keep the doors open”.

Now, he said, the business is seeing a buoyant return that he characterises as “screw it” spending.

“In men’s tailoring, particularly, we are seeing bridal parties come in and spend big. Groomsmen who might have spent $1500 on a suit are now spending more like $1800, $2000. It’s like people are saying, ‘screw it.’”

Footwear and apparel in general are performing well, he added.

But with interest rates and the average cost of consumer goods rising, Mr Fyfe is aware that “those headwinds might change”.

So far, he said, hints of a retail downturn have not reached the upmarket chain, which recently refurbished its Bourke St, Melbourne, flagship store and has heavily invested in its Elizabeth St store.

“We know that our customers have extensive savings from the lockdown period,” he said.

“We saw that over Christmas 2021, and we are finding that our consumers are not being impacted by external economic pressures. Actually, people are buying into newness.

“The Australian consumer is very connected with local fashion and that is a key strategy for us.”

Still, foot traffic, Mr Fyfe conceded, has not completely returned.

“We’re not back to 2019 levels in terms of physical retail, but Friday, Saturday and Sunday have been very good for us,” he said, pointing to the return of events and office hours as drivers of sales.

Still, late night shopping is “nowhere near what it was”.

Retail activity lifted just 0.2 per cent in June following the Reserve Bank of Australia’s decisions to lift the cash rate, according to the Australian Bureau of Statistics.

The result was softer than expected and prompted some economists to tip that retail trade had reached its zenith after six consecutive months of growth.

Deloitte analysis shows that though local retail has fared better than anticipated, spending is expected to slow toward the end of the year, and any growth will likely come from price rises, rather than sales volume.

Mr Fyfe dismissed this.

“We are confident about trading into Christmas, especially after the upheaval of the past few years,” he said.

“We have 33 new fashion brands, and we know that DJs is a destination for Christmas. So, we are very optimistic.”

Fine-Day is set to open a pop-up space at David Jones in Sydney, trading for three months from August 13.

The custom pop-up space will be located at the Elizabeth Street store, on Level 2 alongside women’s contemporary fashion and denim.

The curated collection will include its organic cotton and silk sleep range, bed linen in organic cotton and jersey, loungewear and a pet collection.

Fine-Day launched in April 2022, with an online store and flagship site on High Street in Armadale, Melbourne.

Fine-Day collections are pitched as genderless, inclusive, and produced from sustainable materials.

The launch collection was largely produced in Europe from sustainable fabrications, with an organic cotton tee priced at $50 and bath robe at $180.

Fine-Day is owned and operated by BrandBank Group, parent company of French Connection, Kikki K. and Seed Heritage.

Luxury lifestyle brand Mulberry has appointed receivers to its independent Australian franchisee, which was owned by the same retailers behind collapsed footwear and streetwear business Sneakerboy.

London-listed Mulberry Group has committed funding and support to keep the business running as usual, including making sure employees continue to work and get paid, customer orders are honoured, and the five outlets in Australia remain open.

Mulberry Company (Australia) Pty Ltd, a subsidiary of Mulberry Group, appointed McGrathNicol as receivers to Luxury Retail No.1 Pty Ltd on Friday morning because of concerns about the ongoing viability of the business.

Mulberry supplied Luxury Retail No.1 which ran five Mulberry branded stores through Sydney and Melbourne, as well as some aspects of local digital sales.

“The receivers are undertaking an urgent financial assessment of the business. We are working collaboratively with all stakeholders, including employees and the Mulberry Group, to secure the best possible outcome for everyone,” McGrathNicol partner Barry Kogan said.

“Mulberry Group intends to support the receivership process, including through the provision of additional funding, so that consumers can continue to shop at Mulberry into the future.”

Mulberry Australia acquired secured debt owed by Luxury Retail to a third party, which is secured by all the company’s assets. Luxury Retail No.1 is an independent franchise and not part of the Mulberry group.

“With the support of the Mulberry Group, the franchise business in Australia will continue to trade on a ‘business as usual’ basis throughout the receivership. Customer orders and gift cards will be honoured in full, staff will continue to be employed and paid, and stores will remain open,” McGrathNicol said in a statement.

“The receivers will shortly commence a public process to offer the business for sale or recapitalisation. The Mulberry Group has confirmed its desire to ensure its brand continues to have a positive presence in the Australian market and Mulberry customers are protected.”

Luxury Retail No.1 is owned by four entities related to its two directors Theo Poulakis and Nelson Mair.

Mr Mair and Mr Poulakis were also directors and owners, through corporate vehicles, of Luxury Retail Group, Sneakerboy and three other entities which had administrators Hamilton Murphy appointed in early July by Sydney-based financier Octet.

Mulberry’s appointment of receivers to Luxury Retail No.1 is separate from the collapse of Sneakerboy and the other entities which went into administration last month.

Before administrators were appointed, Sneakerboy was 50-50 owned by holding companies held by directors Mr Poulakis and Mr Mair. The chain’s operating company Luxury Retail Group was similarly split between Mr Poulakis and Mr Mair, although through four entities, similarly structured to Luxury Retail No.1.

Sneakerboy collapsed owing staff more than $500,000 in superannuation and leave entitlements and bills of more than $17 million to suppliers, including more than $12 million owed to a related entity.

Last month, The Australian Financial Review revealed many former and current staff of Sneakerboy had not been paid their full entitlements before the collapse of the business on July 3.

The Fair Work Ombudsman also confirmed it is investigating Sneakerboy staff issues.

Hamilton Murphy is continuing its investigations into Sneakerboy and on August 1 secured court orders granting it an extension of time before a second meeting of creditors on August 23.

High inflation and rising interest rates will cause households to tighten their belts, with the Reserve Bank of Australia warning an unexpectedly sharp decline in house prices could cause the economy to slow more than anticipated.

But research by the Commonwealth Bank suggests the consumer slowdown may have already started, with evidence households were starting to cut back on non-essential spending.

So far, household spending has proved resilient despite cost of living pressures, with retail consumption volumes 5.5 per cent higher over the year, the Australian Bureau of Statistics said.

The RBA cut its forecasts for household consumption growth on Friday, citing cost-of-living pressures and falling house prices. Consumption growth is expected to slow throughout 2023 and into 2024.

“The near-term outlook for consumption continues to be supported by strong labour market outcomes, though growth is forecast to ease over the remainder of 2022 as households’ budgets come under increased pressure from the rising cost of living,” the RBA’s monetary policy statement said.

Higher prices would be felt most acutely by lower income households, who have smaller savings buffers and will be forced to reduce spending, the central bank said.

“For some of these more vulnerable households, the impact of price rises will be mitigated to some extent by the indexation of social assistance payments twice per year, though price rises will reduce recipients’ real incomes in the near term.”

Larger-than-expected falls in house prices or other asset prices would mean household spending could be even weaker than the RBA is forecasting.

“The magnitude of the decline of housing prices arising from higher interest rates is uncertain, especially given the high level of prices relative to incomes,” the RBA said.

Households dial it back

While the RBA is not forecasting consumption growth to slow until next year, internal credit and debit spending data from CBA shows total spending has been falling since mid-May, when the RBA began raising rates.

The RBA lifted the cash rate target by a further half-percentage point this week to 1.85 per cent. Markets are pricing the central bank will raise rates to 3.1 per cent by the end of the year.

Spending on recreation, eating out and household goods had all eased in recent months, said Commonwealth Bank associate economist Harry Ottley.

“Essential spending categories that are less price elastic have seen spending hold up, with transport, utilities and food all remaining resilient,” Mr Otley said.

“Spending on transport has eased slightly as the price of fuel has declined from recent highs, providing consumers with some relief.”

Mr Otley said the moderation in spending was expected given low levels of consumer confidence.

“With spending on discretionary items already easing, it is likely the increased cost to mortgage holders will put more downward pressure on household consumption in the coming period,” he said.

In another sign activity could be slowing, the number of job ads fell for the second consecutive month in July, a SEEK report showed on Thursday.

There were tentative signs labour demand could have peaked, said NAB economist Taylor Nugent. The decline in job advertisements was broad-based across industries, with the steepest falls in the hospitality and tourism industry.

“Two alternative explanations for the decline in new job ads could be employers giving up advertising for new staff given the labour shortage, or more migrants coming across the international border which may be easing pressures in certain industries,” Mr Nugent said.

Despite the monthly falls, job ads remain elevated at 60 per cent above pre-pandemic levels.

The local boss of e-commerce giant Amazon says Australian consumers are flocking to the site to sign up for subscription deliveries of household staples as the retailer ups the ante on fast delivery in major cities.

Country manager for Amazon Australia Janet Menzies said that despite concerns about slower consumer spending, most product categories saw an uplift in sales during the company’s recent Prime Day sale event - with pantry items, beauty and personal care goods performing strongly.

“I think what is most important [at the moment] is value - and we saw on Prime Day that people are willing to spend,” she said.

Grocery and household staples have been a drawcard for customers on the platform, with Menzies highlighting strong demand for the company’s “subscribe and save” feature, which gives users a small discount for scheduling repeat deliveries of things like toilet paper, dog food and soft drinks.

“We have thought a lot about this program and when it is useful — usually, it’s something that is a consumable. And it started off as everyday essentials in the kitchen, but now you can even get ‘subscribe and save’ on [printer] toner,” Menzies said.

It’s been close to five years since Amazon launched in Australia and while the company’s growth has been gradual, revenues surged throughout the pandemic to hit $1.75 billion in 2021. Its 2022 financials are yet to be filed with the corporate regulator.

Amazon is well-known for its superfast product delivery, with the company pioneering the model of parcels arriving in as little as two hours across the US.

On Wednesday, the company confirmed that years after making its first deliveries, it is now ready to expand free one-day delivery to hundreds of thousands of products in Melbourne and Sydney for customers who sign up to Amazon’s Prime membership program.

It will mean users in eligible postcodes can place an order, on some products as late as midnight, and have it on the doorstep the next day.

The focus on one-day delivery comes as Australia’s grocery retailers look at new ways of bringing stock to customers fast.

As a number of grocery delivery start-ups fall on hard times, supermarket giant Woolworths has been trialling one-hour deliveries through its Metro60 app. Meanwhile, both Coles and Woolworths have also launched business grocery platforms, looking to get a slice of the office supplies market.

While Amazon has contributed only a small part of Australia’s retail spending so far, analysts are watching its expansion closely.

“Web traffic analysis shows that Amazon has made significant progress through COVID - holding on to gains in contrast to peer retailers, where trends have retraced as the economy reopened,” Barrenjoey analysts said in a note to clients last month.

Its team predicts less than 30 per cent of Australian households have memberships for Amazon Prime at this point, meaning the retailer has a lot of room to grow.

Menzies says that from here, Amazon wants to “continue to challenge and raise the bar” for how e-commerce retailers can offer value for money in the Australian market.

Alongside product pricing, consistency of delivery will be a big factor in attracting new consumers.

“The other part of the value is reliable delivery — delivering when we say we do.”

Retail sales in June registered $34.2 billion in turnover however rising costs of living and inflation will likely impede growth for businesses, according to data released by the Australian Bureau of Statistics (ABS) today.

Seasonally adjusted retail sales are still higher at 12 per cent year-on-year, although compared to May they were up by just 0.2 per cent, a figure dwarfed by the current inflation rate.

Cafes, restaurants, and takeaway food services had the largest rise at 2.7 per cent, followed by clothing, footwear, and personal accessory retailing at 1.3 per cent, and other retailing at 0.5 per cent.

Department store sales fell by 3.7 per cent while food retailing and household goods also recorded poor turnover at 0.3 per cent each.

Ben Dorber, head of retail statistics at the ABS, said results were mixed across the six industries as cost-of-living pressures appear to be slowing the growth in spending.

Australian Retailers Association CEO, Paul Zahra, said the results are not necessarily a “full reflection” of business performance as consumer prices have increased across the country.

“Consumers are paying more for everyday items, while at the same time, business operating costs have increased significantly.”

He cautioned consumers are anxious about the rising costs of living and interest rates which will likely impact spending in the coming months.

Dominique Lamb, National Retail Association chief, said retail businesses face a “challenging” period ahead in this inflationary climate.

“The impact of interest rate hikes will come to a head for many family-run and small business operators, who are struggling to keep up with the rising costs of business and dwindling consumer confidence,” she said.

On a state basis, NSW was the only state where retail turnover fell (by 0.2 per cent) while the NT posted the highest rise (1.8 per cent). Sales in Queensland were down 0.7 per cent), in the ACT by 0.6 per cent, and in both WA and Tasmania, by 0.5 per cent.

Trans-Tasman online retailer Kogan has reported a return to adjusted profit during the first quarter, but not by enough to prevent a 69 per cent slump for the full year to June 30.

Sales for the year were static, up by just 0.1 per cent, to $1.18 billion, while adjusted EBITA was $19.1 million – down from $61.8 million last year and $49.7 million the year before.

Significantly, the majority of its EBITA for the latest year came from New Zealand, where it earned $12.2 million from its Mighty Ape marketplace. The core Kogan.com operation earned $6.9 million, down 87.4 per cent year on year.

However, despite what the company described as tough trading conditions – impacted on both sides of the Tasman by Covid – Kogan’s active customer base has grown to 3,972,000 and its Kogan First loyalty program membership surged by 210 per cent.

Ruslan Kogan, founder and CEO of Kogan, said consumers don’t want to alter their lifestyle but are happy to shift the way they shop in uncertain times.

He said the company is working to become “leaner” and to pass on cost efficiencies to customers through lower prices in response to changes in the macro environment.

Earlier this year, the business said consumer demand did not meet its expectations as it moved through a challenging market condition in its third-quarter results.

Meanwhile, the group’s total stock inventory has been reduced from $227.9 million a year ago to $161.1 million, with $139.2 million worth in warehouses and $21.9 million worth in transit. That has also assisted in boosting its net cash position from $12.8 million at the end of last financial year to $32.1 million.

Kogan’s portfolio of businesses includes Kogan Retail, Kogan Marketplace, Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Travel, Kogan Money, Kogan Cars, Dick Smith, Matt Blatt and Mighty Ape.

Inflation could turn negative by late next year as petrol prices decline and supply chain pressures ease, allowing the Reserve Bank of Australia to avoid being too aggressive on interest rate rises.

Economists expect some major global inflationary pressures to be temporary and Australia’s quarterly headline inflation to be low or negative by the final quarter of calendar 2023.

An expected easing of inflation pressures next year meant the RBA should not lift the cash rate too far above the estimated 2.5 per cent neutral rate, said Outlook Economics director Peter Downes.

The sharp rise in the cost of oil, shipping, freight and manufacturing stems from Russia’s war on Ukraine driving up energy prices, China’s COVID-19 restrictions choking global supply chains, ultra-loose monetary policy and government spending.

“These special factors will begin to reverse,” Mr Downes said.

“If global growth slows and global oil prices fall back to around $US60 a barrel, fruit and vegetable prices fall back, freight rates return to pre covid rates as they are already most of the way there and building costs return to some sort of normality, then the through the year headline rate could be negative by the end of next year.”

Bond traders have reduced the outlook for long-term interest rates in response to central banks worldwide aggressively raising rates towards “neutral” – the theoretical rate that is neither stimulatory, nor restrictive.

The RBA meets on Tuesday and is widely expected to increase the 1.35 per cent cash rate by another 0.5 of a percentage point to 1.85 per cent, with more increases to follow in coming months.

The 6.1 per cent annual inflation rate for the June quarter reported on Wednesday meant a 0.5 of a percentage point rise was likely on for next week, said Commonwealth Bank of Australia economist Gareth Aird.

“We believe the case to move the cash rate by more than 50 basis points at the August board meeting is weak,” Mr Aird said.

“The inflation data did not surprise to the upside.

“And whilst the annual rate increased, the quarterly pulse of inflation did not accelerate.”

Treasurer Jim Chalmers and Reserve Bank of Australia governor Philip Lowe have warned inflation will spike above 7 per cent by late this year, but expect inflation to ease next year.

A negative quarterly headline inflation rate was “not out of the question” later next year if the global price of oil and petrol prices fell significantly, said ANZ economist David Plank.

However, Mr Plank said the RBA would be more concerned about underlying inflation, which ANZ tips to eventually fall below 3 per cent in annual terms by mid-2024. Annual underlying inflation was 4.9 per cent to June 30, the Australian Bureau of Statistics said this week.

Key will be wages

“The real inflation key will be the behaviour of wages if the unemployment falls below 3 per cent as we are now forecasting,” Mr Plank said. In June, Australia’s jobless rate fell to a 48-year low of 3.5 per cent, the ABS said.

It is possible that headline quarterly inflation could turn negative late next year if the oil price plunged, but the RBA’s more important measure of underlying inflation would still be firm, said HSBC Australia chief economist Paul Bloxham.

“The important part is domestic non-tradables inflation, which will remain above target given the tight labour market and likely momentum in wages growth by next year.”

Mr Bloxham tipped the RBA cash rate to hit 2.6 per cent by this December.

The RBA could get “lucky” next year as global inflationary forces recede, if the bank managed to keep a lid on inflation expectations, he said.

While Dr Lowe appears confident much of the supply-side inflation pressures from overseas will ease, he is keeping a close eye to make sure a wage-price spiral doesn’t develop to underpin a new burst of inflation.

He has said it is important to keep a lid on inflation expectations, to deter businesses from rising prices too much and workers making excessive wage claims.

Globally, a big jump in soft commodity prices such as corn, wheat, canola, cotton, live cattle, lamb and pork has driven food inflation. After surging, prices for most of these farm products have declined.

Japanese apparel retailer Uniqlo is set to open its first South Australia store, in Adelaide’s Myer Centre.

The new store spans 1000sqm and occupies a brand new addition to the Myer Centre. It will sell a range of LifeWear apparel for men, women and kids, alongside seasonal collaborations with designers.

Kensuke Suwa, COO of Uniqlo Australia, said: “Our South Australian customers have shown tremendous support since we arrived in Australia. This opening is not only a special milestone for the shoppers in the Myer Centre, but it is also for everyone at Uniqlo.”

“The addition of Uniqlo will further enhance the overall vibrancy of the centre and contribute to creating an unparalleled shopping experience for our customers,” added a spokesperson for Myer Centre Adelaide.

The new store will open later this year once construction is complete.

A parcel of 19.2 million Myer shares changed hands in a pre-market crossing on Thursday, with fingers pointing to Solomon Lew’s Premier Investments as the buyer.

The trade was done at 50¢ a share, a 13.6 premium to the last close of 44¢, implying the buyer was keen to pick up the stake.

Fingers were pointing to Solomon Lew’s Premier Investments, already Myer’s biggest shareholder, which had been able to buy more since July 28.

The stock was handled by Blue Ocean Equities, which Lew has used in the past for Myer shares purchases. The transacted stake represented 2.3 per cent of the company.

It comes after Myer, on July 26, told market it expected full-year sales to be between 12.3 per cent and 12.7 per cent higher to hit up to $2 billion.

Lew last bought Myer shares in late January, picking up 3.9 per cent (or 31.7 million) of the company and pushing Premier’s shareholding to 19.9 per cent. That trade too was done at a premium to the market price.

The retail billionaire has been a thorn in Myer board’s side since 2017 and has tried to spill the board while Myer failed to turn a profit for two years.

Myer, in turn, has accused him of trying to take control of the company without paying the premium. It also hired Ron Malek’s Luminis Partners and law firm Clayton Utz last year as defence advisers.

Solomon Lew’s Premier Investments is creeping higher on the share register of Myer just a week after the department stores group issued an upbeat trading update, and six months after he last bought shares.

Premier has yet to post a substantial shareholding notice, but The Australian Financial Review’s Street Talk column reported on Thursday morning that his investment vehicle had snared another 2.3 per cent of the department store, boosting his holding to about 22.2 per cent.

The trade was done at 50¢ per share, a 13.6 per cent premium to Wednesday’s closing price of 44¢. Myer shares shot up over 9 per cent to 48¢ on Thursday.

Although Premier’s holding is now beyond the 20 per cent threshold, which would normally trigger a takeover bid, Premier is allowed to “creep” by buying up to 3 per cent of the target’s shares every six months.

Kerry Stokes’ Seven Group used the same aggressive creep strategy over several years before finally taking out building materials company Boral.

Mr Lew increased his stake to 19.9 per cent in February. While he has no obligation to bid, some say the increased stake gives him more clout to gain a board seat. It is understood there has not been any contact recently between Premier/Mr Lew and the Myer board led by JoAnne Stephenson.

Myer and Mr Lew both declined to comment.

The move by its biggest shareholder and long-time thorn in its side, comes a week after Myer revealed that it expected full-year 2022 sales to climb between 12.3 per cent and 12.7 per cent to as high as $2.995 billion – helping to double its bottom-line profit in its best result since 2018.

CEO John King has been shutting stores and shrinking floor space as part of his overhaul of the company.

There is obvious strategic value in the two companies coming together, with Premier able to offer its brands like Smiggle and Just Jeans immediately in concessions-type stores in Myer, helping to boost sales and profitability.

Mr Lew has a long, twisted history with Myer. He was entangled 40 years ago, buying an initial stake and then was forced off the board of the former Coles-Myer in 2002. He re-emerged in Myer snapping up a 10.8 per cent stake in 2017 via Premier.

A year ago last July, the billionaire retailer was making a push to take control of Myer, demanding that its non-executive directors – David Whittle, Jacquie Naylor and acting chairman Ms Stephenson – step down before he accepted Myer’s offer for board representation.

There is also speculation about any role that Mark McInnes might play. He is the former CEO of David Jones and also ran Premier until he resigned in January 2021 to spend more time with his family.

Wilson Asset Management lead portfolio manager Oscar Oberg has been a long-time backer of Myer because he believes in the future of department stores.

“We see at the moment the business is doing incredibly well. It’s a very tough environment, so it’s positive that someone sees value in the business because it’s grossly undervalued,” he said.

Mr Oberg added that Myer had a strong balance sheet, putting it on more solid footing should a recession hit Australia. He noted that Myer also has been slimmed down and managed well throughout the past five years amid COVID-19 closures and supply-chain constraints.

Myer is launching donation stations in its Melbourne, Eastland and Fountain Gate stores.

The donation stations are part of its partnership with Moving The Needle, a Salvation Army Australia initiative to reduce waste in the fashion industry.

According to the Salvation Army website, all donated items are individually sorted, evaluated, and placed either in store or into one of its recycling streams. 

“Once donations are received by a store, they are moved to a sorting room where the store team will separate them into clothing categories or season. 

“Each category will be carefully sorted by a team member who will review each item and decide, for example, which pieces of clothing are in saleable condition (clean and undamaged), and which will need to be repurposed.”

“Clothes that have been processed for sale are then priced based on their condition, quality, and original retail value before being displayed on the shop floor for them to find a new owner.”

This move forms part of Myer’s commitment to implementing initiatives that reduce packaging, minimise waste from landfill, promote recycling, and support circular economy schemes. This includes a focus on increasing Myer's recycling diversion rate of 63.6% to minimise landfill.

According to its online report into sustainability, Myer is continuing to improve its packaging standards, which includes a paper reduction project in stores, substituting 70% of soft home packaging to natural fibres, and phasing out plastic shopping bags.

Regarding the latter, the online report states that Myer has decreased plastic bag consumption in stores, with the total number of units ordered down 4.96 million in FY20.

The launch of its donation stations joins over 550 textile drop-off points throughout Moving The Needle’s network.

The initiative will run until October 9.

Strandbags has announced the launch of its lifestyle travel brand Nere.

The venture follows the release of Evity, an accessories brand specialising in style-led designs using responsibly sourced leather. 

Designed in Australia, Nere offers a range of suitcases, travel bags and accessories, with fashion-inspired new releases two seasons per year. This will also include colour updates to ongoing collections.

Strandbags CEO Felicity McGahan said the launch of Nere is a key milestone in modernising its travel offering.

“We saw the opportunity to take our already successful Flylite travel brand and re-imagine it to become a travel lifestyle brand, suitable for today’s modern traveller.

“Following the pandemic, consumers have a pent-up desire to travel, yet at the same time travel has become more complex and less affordable.

“We spent the last two years creating a brand that will inspire travel near and far through the seamless combination of fashion and function, at an accessible price point.”

The current range comprises of five collections:

· Stori – an iconic suitcase in black and on-trend colours

· Wonda – a quiet gliding case

· Caype – a feminine case with rose gold accents

· Mono Floral – a contemporary take on traditional floral

· Canvas – everyday bags made from sturdy cotton canvas.

It also includes travel accessories, such as luggage tags, packing cubes, foldable totes, backpacks and duffles.

“As leaders, Strandbags was the first to offer handbags and travel side by side in retail, and it is this experience that informs our unique approach to building brands that marry fashion and function," McGahan said. “We are excited to help travellers explore the world again after a disruptive few years."

Consumer spending continued its strong trajectory in June, with apparel sales up 2.4% and jewellery surging ahead by 23.2% according to Mastercard SpendingPulse.

The data, which measures in-store and online retail sales across all forms of payment, showed that consumer sales across all sectors was up 11.1% compared on the same period last year. 

Compared to other retail sectors, apparel saw seen the least growth with fuel and convenience at 23.1%, lodging up 17.9%, home furnishings up 6.5% and electronics up 4.8%. 

Australian Retailers Association CEO Paul Zahra said while sales are increasing, it is not a full reflection of sector performance - with rising labour costs, rents, fuel and energy costs and supply chain constraints all adding to the cost crunch for business.

“The performance of the retail sector is not just marked on sale volumes. We are operating in an inflationary landscape, where consumer prices are increasing, which impacts overall retail trade numbers.

“This is creating a perception that the sector is thriving. However, many businesses are severely challenged by rising operating costs associated with labour, fuel, energy, supply chains and rents.

“While consumers are impacted by the rising cost of living, the rising cost of business is in many cases more severe. The economic outlook also has many business owners feeling nervous, as rising interest rates begin to take hold and some natural belt tightening occurs with mortgage holders.

“The household savings rate remains above pre-Covid levels, which will cushion some of the inflationary impacts consumers are experiencing. However, when people rein in spending, discretionary purchases are the first things they cut out.”

Zahra continued: “We remain optimistic the retail sector will be able to weather the current economic headwinds and the rising cost challenges. However, we need to acknowledge that just because overall sales are up, it does not necessarily mean that retailers are doing well.

“As they have through the pandemic, many retailers continue to reduce inflationary shocks for their customers by absorbing some costs, which of course affects their margins. And passing on cost increases has impacted their volumes.”

Appliances Online has been named Australia’s Online Retailer of the Year for 2022 – and two of the company’s rivals also took out major honours.

The Australia Post-sponsored Online Retail Industry Awards (Orias) announced last night in Sydney, recognise local and international brands for their innovation, exceptional achievements and hard work.

Appliances Online took out the supreme award, another for Customer Service Excellence, and a third for Best Pureplay Retailer.

Rival Kogan won the Australia Post People’s Choice Awards for Large Retailer Over $1 million in annual revenue, and another, Winning Appliances ,was named Best Multichannel Retailer.

Sexual wellness retailer Lovehoney was inducted into the Orias Hall of Fame.

Gary Starr, Australia Post’s executive GM of customer & commercial, acknowledged the remarkable efforts of online retailers and said it was wonderful to see the industry come together again to celebrate the event in person. Last year’s event was held virtually due to Covid movement restrictions, with the winners acknowledged at last night’s event.

Other 2022 Oria Awards winners were:

• Best B2B Online Retailer: Hero Packaging
• Best Community Initiative: i=Change
• Best Small Independent Retailer: Une Piece
• Best Social Commerce Initiative: Showpo
• Best Phygital Initiative: Cue Clothing Co
• International Conqueror: Quad Lock
• Technology Champion: Cotton On
• Best Online Retail Marketing: Salvos Stores
• Industry Recognition: Paul Waddy
• Australia Post People’s Choice Awards – Small Retailer Under $100k Annual Revenue: Ruby’s Home Store
• Australia Post People’s Choice Awards – Small Retailer Over $100k Annual Revenue: 4 Ingredients

Department store Myer has partnered with Close The Loop to trial a cosmetics packaging recycling program.

The trial will run for eight weeks till September 16 and will have Close the Loop collect, sort and process products into eight categories.

Both hard and soft plastics will be shredded and used in Close the Loop’s TonerPlas – an asphalt additive – while metals will be separated and recycled. Glass will be crushed and used as a sand replacement in construction.

Materials that cannot be processed will be used to fire a low-carbon emissions cement kiln so that no products end in a landfill.

CEO of Close the Loop Group, Joe Foster, said this initiative will demonstrate to the global cosmetics industry how it can be more sustainable.

“The launch of the trial is very timely given the Australian Government’s second round of plastics export bans has just come into effect,” said Foster.

“It is a great example of what can be achieved when all stakeholders work together to enable end-of-life products to be efficiently collected, and then recycled or remanufactured into other products.”

He added cosmetics packaging is traditionally a “complex waste stream” often including a range of products such as plastics, glass, metals, natural fibres, mirrors, foils, rubber, foam, paper and residual products.

The grant for the trial is funded by the Australian Government’s National Product Stewardship Investment Fund.

Customers can access the list of participating locations on the website or through the Recycle Mate app which also provides information on what can be recycled through a database of local council waste.

Department store group Myer says its sales will nudge $3 billion for the full year as burgeoning online sales and “positive outcome” across all metrics drove solid growth, despite the loss of trading days to Covid during the second half.

In a trading update for the 52 weeks to July 30, the business said it expects second-half sales to be up by about 17 per cent. Based on unaudited accounts, sales for the year will range between $2.85 billion and $2.995 billion.

Online sales accounted for 24 per cent of total sales and are expected to range between $715 million and $725 million highlighting strong growth momentum in the half. That represents year-on-year growth of between 32.5 and 34.4 per cent.

Post-tax net profit for the year is expected to be between $55 million and $60 million, an increase of 86 to 103 per cent over last year if the impact of JobKeeper subsidies is excluded from the prior year, when the results included Jobkeeper support of $22 million after tax.

In response to global supply chain issues, the business’ store stock in hand levels is 9.6 per cent higher than at the same time last year.

Myer’s CEO John King, said the momentum in the second half in terms of sales growth both in-store and online, profitability and strengthening of the company’s balance sheet “place us well as we go into the new financial year”.