News

R.M. Williams CEO Raju Vuppalapati has been appointed by Woolworths Holdings (South Africa) as the new CEO of Country Road Group (CRG). 

The appointment follows former CRG CEO Scott Fyfe's move over to sister business David Jones in October 2020. 

Vuppalapati joins CRG after R.M. Williams was acquired by Andrew 'Twiggy' Forest's investment company Tattarang for $190 million, also in October last year. 

The long-serving CEO is widely credited for the successful brand repositioning and subsequent growth of the R.M. Williams business in his seven-year tenure. 

CRG, which comprises brands Country Road, Mimco, Witchery, Trenery and Politix, is set to benefit from Vuppalapati's leadership, as it rebuilds after suffering blows during COVID lockdowns - especially in Victoria. 

For the first half of FY21 Woolworths Holdings reported that CRG sales over the half declined by 5.2% and by 2.4% in comparable stores. 

However, the business was showing positive signs at the end of the half, delivering strong sales growth of 6.7% in the last six weeks of the period, underpinned by new product ranges, especially in the Country Road brand. 

Speaking on his appointment, Vuppalapati said that he is excited to join the CRG business. 

"I am delighted to be joining Country Road Group and to be working with a portfolio of some of Australia’s most iconic and most loved clothing and lifestyle brands," he told the AFR. 

"It is a great business, and I am looking forward to working closely with the talented CRG team.

"This is an incredibly dynamic time in retail and I am excited by the opportunities ahead," he said. 

They might not have the blood, sweat and tears of Nine’s reality show The Block, but Bunnings’ home renovation videos are attracting millions of viewers to its website and YouTube channel and inspiring a new generation of DIYers.

Bunnings is filming the fourth series of a home renovation show that has helped Australia’s largest home improvement retailer boost sales by inspiring customers to undertake minor and not-so-minor DIY projects in their houses and gardens.

Two years ago, Bunnings bought and renovated a home in the Melbourne suburb of Knoxfield to create fresh DIY content for its website and YouTube channel. The home was also used to create a TV series, Make It Yours, which aired on the Seven Network.

It still owns the Knoxfield property but sold two other properties renovated in previous seasons soon after filming finished.

This year, Bunnings is renovating the homes of Bunnings staff, transforming different rooms and gardens in several houses, rather than renovating a single home, showing customers how to transform their living spaces.

This week, for example, it was filming segments on updating laundries and refreshing kitchens, with the episodes to be released in June and July.

Almost all the tradies who appear in the videos are Bunnings staff, chosen based on their experience in areas such as carpentry, painting, horticulture and landscaping.

Bunnings said the videos were not aimed at selling specific products – brand names are rarely mentioned – but inspiring customers to do their own renovations, show how easily it can be done and what an impact it can have.

The content complements in-store advice, how-to videos on the Bunnings website and an online DIY and gardening community known as Bunnings Workshop.

The videos and DIY hub show customers how to undertake projects such as laying turf, installing outdoor garden lighting and pop-up sprinklers, paint and tile bathrooms, make simple furniture, and design and update kitchens, by for example, installing new handles or painting laminate cupboards.

“Creating great content that makes DIY easier for customers is a huge focus for us,” said Bunnings managing director Mike Schneider.

“We have created hundreds of how-to articles and videos for customers, covering everything from hanging a picture to building a deck and everything in between,” he said.

”Like our in-store experience, expert team members provide the advice and they are the face of our videos. It’s a natural extension to the in-store experience.”

Mr Schneider said that while the products featured in the videos were available in Bunnings stores, the retailer did not view the content as product advertising.

”What we’re trying to do is inspire and make DIY accessible with entertaining and informative story telling,” he said.

“A lot of our content is about showing customers how to tackle a project step by step, and that gives them the confidence to try it themselves.”

“Customers tell us mastering one project gives them confidence and motivates them to try another one. And that’s great for customers and for us.”

Bunnings has now created more than 750 how-to videos to date for its website and YouTube channel.

The investment is paying off in spades. Bunnings’ sales rose a staggering 24 per cent to $9.1 billion in the six months ended December 31, with same-store sales up almost 25 per cent, while earnings jumped 36 per cent to $1.3 billion.

Sales growth was particularly strong in categories such as paint, lighting, garden and outdoor living as people stuck at home during the pandemic and unable to travel overseas invested in upgrading their homes.

Bunnings declined to say if there was a spike in sales of products used in some of the videos – such as paint spray guns or modular decking – but its research showed customers were inspired by the videos and undertook similar renovations.

Bunnings would not disclose how much it spends on making the content, which is part of its growing annual marketing budget.

Mr Schneider said the content helped the 135-year-old retailer stay relevant with younger customers who might start their DIY project researching on mobile devices rather than in stores.

“We want to be an online destination and a starting point for younger customers,” he said. “Over the past 18 months we’ve really increased the amount of content that is geared toward younger people starting out on their DIY journey.”

For the current Make It Yours series, Bunnings has linked up with influencers such as interior designer Lucy Glade-Wright, the founder of online publication Hunting for George, DIY “extraordinaires” Az and Jamie from Haus of Cruze, DIY style queen Geneva Vanderzeil and organisational guru and YouTube star Rachel Lee.

“Catering to this younger audience with great content will continue to be a big focus for us,” Mr Schneider said.

Before COVID-19, Bunnings’ online how-to content attracted about 700,000 visits to the DIY advice hub on the Bunnings website each month.

As Australians spent more time at home, the number of visits to the DIY hub jumped to 1.8 million a month in March and April last year and remained strong throughout 2020, with more than a million visits each month, including a second peak in November when visits reached 1.6 million.

The demand for DIY content mirrors the growth in visitors to the Bunnings website.

The Bunnings website attracted on average 13 million visits a month in 2017 and 15 million a month in 2018, even though the retailer did not have an online store at that stage.

In 2019, website visits rose to an average of 19 million a month, boosted by the launch of a fully transactional e-commerce site and marketplace.

In 2020, website visits grew to more than 30 million a month and the level of interest had remained strong into 2021, a spokesman said, auguring well for another bumper year.

Mosaic Brands is investing heavily into its retail team, launching The Mosaic Academy. 

The training program will kick-off later this month and will be delivered through Mosaic's online learning platform. 

The Mosaic Academy will focus on retail service, sales and management and will offer team members the opportunity to gain a nationally recognised qualification in either Certificate III or Certificate IV in Retail. 

Speaking on the initiative, Mosaic Brands CEO Scott Evans said that the program streamlines training and will help to attract new talent to the business. 

"Our Mosaic Academy program is about offering our team the opportunity to inspire and motivate each other while gaining new skills, no matter where they are located, or if they’re part-time or permanent. 

"Our investment in the academy means on-the-job training and development can be delivered across one of the largest fashion retail networks in Australia simply and efficiently.

"The Academy is both a way of recognising and developing the exceptional talent we have within the organisation, along with attracting new team members to our brands," he said. 

The launch of the program follows internal expressions of interest, which saw over 350 team members indicate their interest in the opportunity to strengthen their skillset and qualifications.

Mosaic is now looking to offer traineeships to these team members across its nine brands in the first 12 months of the academy’s operations. 

The Mosaic Academy's retail certificates will be specifically tailored to Mosaic Brands.  

Munro Footwear Group tells the story of its founder, Graham Munro, who is celebrating 70 years in the footwear industry.  

For Graham Munro, leaving school to pursue a career in business was always his ambition.

Earning a scholarship to the Myer business training program in 1951, that same year saw him transferred to the footwear department.

He’s been in the footwear industry ever since.

Over his eight valuable years at the Myer Emporium, Munro reflects on the early waves of globalisation.

"As interesting new international products started coming into the country, luckily for me, Myer didn’t know that a raffia sandal with a cork unit sole was actually a sandal," he chuckles, "so they ended up in my slipper department.

"This department went on to become the most successful on the floor in its first season thanks to those very fashionable slippers."

By 1959, Munro’s keen entrepreneurship landed him a sales role with footwear agents Clark & Coventry in Clifton Hill, with founder Nathan Clark, creator of the iconic Clarks desert boot.

Melbourne was a footwear manufacturing hub then, with Abbotsford, Collingwood, Fitzroy and Clifton Hill home to almost five hundred shoe factories, tanneries and suppliers.

"I can still drive down Hoddle Street and point out the original shoe factories," Munro added. 

Identifying a gap in the market for teenage girls, Munro ventured into design and manufacturing, introducing the Gamins brand in 1962.

"Back then, the options for 15–17-year-old girls were limited to their brown, T-bar school shoes, or shoes stolen from the bottom of their mother’s wardrobe."

The brand was hugely successful, stocked in retailers across Australia.

By the 1970s, decreased government protection for the textile, clothing and footwear manufacturing industries and increased importation decimated Australian footwear manufacturers to the point where there were only a handful left.

"We continued manufacturing long after most of our competitors had given up, an approach that caught up with us by the late 90s when we lost just about everything.

"Those last few years were very painful," he said. 

In the early 2000s, the business saw a successful resurgence as an importer and wholesaler, a move that Munro credits almost entirely to his wife, Kerrie, and formed the foundation of the successful retail and wholesale business we see today.

Reflecting on the various evolutions of the business over seven decades, Munro attributes the importance of relationships as one of the keys to his success.

"We received tremendous support from previous partners when we reimagined our business.

"We’d done the right thing by them in the past, and they wanted to do the same by us," he said. 

Munro’s advice to future entrepreneurs?

"It’s all about the people, your team and your customers. Don’t focus on the past, and don’t focus on what can’t be done.

"We’ve always experimented.

"Some might have considered these approaches hairbrained, for instance when we took on Styletread, but these experiments have led to some amazing results," he said. 

From humble beginnings with his family once living above their factory in Abbotsford, lacing moccasins together until all hours to save a few dollars, to now a $300 million business, Munro is satisfied cheering on from the sidelines these days.

"I’m still involved with styling and sampling processes every season and keeping a watchful eye over daily sales."

Munro Footwear Group enjoys continued success as Australia’s largest privately-owned footwear company.

From its roots in manufacturing, the business today has hundreds of stores, designing and developing over 80% of its products out of a sourcing and manufacturing network that spans more than 20 countries.

Seafolly has announced its new global ambassador, Australian model, beauty entrepreneur and philanthropist Lara Worthington.

The news comes as the swimwear label executes its comeback strategy after falling and re-emerging from administration in 2020. 

Speaking on the comeback strategy in 2020, Seafolly CEO Brendan Santamaria said that the goal was to revamp the brand and expand it further. 

"Now is the time to shake things up at Seafolly and I see real opportunity for Seafolly to emerge post voluntary administration (VA) as one of the world’s most iconic swimwear and beach lifestyle brands.

"To date the brand has established and nurtured a global loyal customer following especially here in Australia.

"Our goal is to grow this customer base further and set the brand back on its trajectory to global success, together with our partners," he said. 

Helping to achieve this aim is Worthington, whose ambassadorship announcement is one of the biggest the brand has made since emerging from VA. 

Worthington joins a high-profile line-up of former Seafolly ambassadors including Gigi Hadid, Miranda Kerr and Jessica Hart, and begins her ambassadorship with the 'Always Seafolly' campaign. 

According to Seafolly's head of marketing Victoria Taylor, the campaign aims to empower women to #FeelThatWay always - a message which Worthington embodies, Taylor said. 

"Lara illuminates how our latest collections can be uniquely styled to suit individual personalities and lifestyles, showcasing that being yourself, being comfortable and looking stylish are not mutually exclusive. 

"Lara is a remarkable talent and there is no denying her down to earth nature and love for the beach will resonate with our customers. 

"When we first approached her about a partnership, we were drawn to her confidence and passion for wellness as much as her love for Australia and the beach.

"She loves to express herself through style and is a constant inspiration to her fans on living a fulfilling lifestyle.

"It’s that authenticity and unapologetic spirit that we admire, and we are thrilled to welcome her to the Seafolly family," she said. 

The campaign will be communicated across Seafolly and Worthington's channels, which include sizeable audiences of 523,000 and 746,000 Instagram followers respectively. 

This season, Seafolly has introduced ‘Seafolly Originals,’ a collection of loungewear featuring embroidery of the heritage Seafolly logo, available in Lilac, Beige, True Navy, Thyme, White and Black.

The business has also welcomed a new line of knitwear and ready-to-wear pieces that help Aussies transition between the seasons.

Meanwhile, Seafolly is also furthering its journey towards greater sustainability, focusing on using fabrics made with recycled yarns to create mindful products.

Worthington will appear in worldwide campaigns across a range of channels until October 2021. 

Seafolly is sold in over 1,600 doors in 51 countries, through its retail stores, eCommerce site, leading retailers and major online sites.

There are 25 Seafolly stores (21 in Australia and 4 in Singapore) and the company ships to Australia, Singapore and the US through its own eCommerce site.

Industrial landlords are on track for another record-breaking year after around 1 million square metres of warehouse space was leased during the first quarter of 2021, most of it in Sydney and Melbourne.

Last year, a record 3.2 million square metres of warehousing was leased, with the boom fuelled by the acceleration of online shopping and e-commerce during the pandemic.

If the current pace of deals is maintained, around 4 million square metres of warehouse space will be leased by the end of the year.

According to Colliers, which compiled the latest figures, more than half of all leasing deals completed in the first quarter were in the transport, logistics and retail sectors.

Driving the activity in 2021 has been the continued growth in e-commerce and as companies look to streamline and automate their supply chains in larger, more efficient and better located warehouses to ensure speedy delivery of goods to customers.

A big American private equity firm has come calling for Australian grown and owned streetwear clothing and sneakers retailer Culture Kings.

Street Talk can reveal Culture Kings’ founder, 36-year-old Queenslander Simon Beard, is in late-stage talks to sell a half share in his business to Boston-based Summit Partners and its fashion retail brands investment company, a.k.a. Brands.

Industry sources offshore said the deal would value Culture Kings at more than $600 million, which would make it the biggest ever private sale in Australia’s retail and apparel sector.

Beard, who founded the business with his wife Tahnee with one store on the Gold Coast more than a decade ago, is expected to continue to run Culture Kings under private equity ownership, and remain heavily invested.

He is understood to be a big reason why Summit Partners is attracted to Culture Kings and thinks it can turn it into a global success story. Beard paid $30,000 for a struggling Miami-based boutique, Culture Kings, through which he bought sneakers and re-sold them in Australia. He opened his first store on the Gold Coast in 2008.

Sydney is to invest $43.5 million converting the city’s downtown retail destination George Street into what it hopes will become a ‘world-class pedestrian boulevard’. 

The project will include new green space and street furniture, wider footpaths, and outdoor dining areas. Already a 9000sqm car-free area is already underway, spanning from the George Street light rail route from Town Hall down to Railway Square.

In a separate move, a new public space will be created on Devonshire Street between Chalmers and Elizabeth streets in Surry Hills, with construction scheduled to start next year. 

“We’ve loved seeing people reclaim George Street south while the temporary road closure measures have been in place,” said Lord Mayor Clover Moore. “Now we want to make these measures permanent, giving people more space to window shop, dine and walk while maintaining physical distancing.”

The famous street is home to various retail stores and dining venues, including the new premium IGA Locali grocer, the city’s Apple flagship and a giant Mecca store. New stores are set to open on George Street later this year, including the country’s largest Lululemon store and a flagship for Swiss luxury brand Bally. 

“We are working closely with businesses to minimise disruption,” Moore added. “Extending this public space with permanent, quality infrastructure will make the whole area more appealing for workers, visitors, residents and local businesses, and encourage walking through the centre of our city.”

Supported by all levels of government, the project will receive $7.05 million from the Australian government for the part between Bathurst and Goulburn Streets, and $1 million from the NSW government for the overall works. 

Carla Zampatti’s eldest daughter said her mum would have called it the best-dressed funeral she’d ever been to.

The iconic fashion designer was farewelled in a state funeral on Thursday morning at Sydney’s St Mary’s Cathedral before a capacity congregation of more than 1200 mourners.

Former foreign affairs minister Julie Bishop was elegant in the Velvet Feathered Stunner Dress in deep navy from the Autumn ’21 collection. Zampatti’s eldest daughter, Allegra Spender, wore the same style in black.

Former governor-general Dame Quentin Bryce went for the blue Celebration Caped Sleeve Dress (also Autumn ’21), while Carnival Corporation director Katie Lahey paid tribute in a well-cut timeless pair of the designer’s black trousers.

Sydney businesswoman Wendy McCarthy cut loose in a midnight-blue satin blazer and pants suit from the designer’s 2019 collection, which she had worn that year to meet Michelle Obama in Singapore.

Jewelry retailer Michael Hill has followed up its “outstanding” performance in the first half with a strong third quarter. Same store sales rose 16.4 per cent, while group margin increased by more than 200 basis points, during the period.

Digital sales, too, saw strong growth – up 69.2 per cent year-on-year, and 93.3 per cent year-to-date.

“I’m delighted by these results, delivering further margin improvement and double-digit sales growth in all markets,” said chief executive Daniel Bracken.

“Our strategic growth agenda underpins this performance as we accelerate digital innovation, embrace new ways to shop and elevate our brand.”

The impact of Covid-19, however, continued to be felt during the quarter. In Australia the business lost 332 trading days due to the closure of 14 Queensland, 36 Victorian and 22 Western Australian shops.

Likewise, operations in New Zealand were down 160 trading days, with 16 Auckland stores shuttered during the city’s lockdown.

Comparatively, the business’ Canadian operations had it much worse, losing 2,364 trading days due to 46 closed stores.

“Considering the ongoing challenges of navigating Covid-19, particularly in Canada, this result demonstrates the resilience of the Michael Hill business and further validates our transformation to a modern, differentiated, omni-channel jewelry brand,” Bracken said.

The Wesfarmers-owned hardware chain Bunnings has acquired Australia’s largest tile retailer, Beaumont Tiles, ending 61 years of the group’s family ownership.

Bunnings managing director Mike Schneider said the group would run Beaumont Tiles as a standalone business, separate to its chain of Bunnings stores nationwide. Beaumont Tiles has 115 retail stores around Australia and also runs large distribution centres in Sydney, Melbourne, Brisbane and Adelaide.

Bunnings operates 380 hardware outlets, most of them in the “big box” warehouse format, and will need approval from the Australian Competition and Consumer Commission (ACCC) for the acquisition. Bunnings has a substantial range of tiles in its own stores.

“The acquisition represents an opportunity to build on the success of the Beaumont Tiles business and invest in its future growth,” Mr Schneider said.

Beaumont Tiles services both trade customers and householders.

He said there were opportunities for strong growth in the segment. Home renovations are booming in the COVID-19 pandemic with overseas travel off the agenda and ultra-low interest rates fuelling spending on houses and apartments.

Bunnings’ sales rose a staggering 24 per cent to $9.1 billion in the six months ended December 31, with same-store sales climbing almost 25 per cent, while earnings jumped 36 per cent to $1.3 billion.

Beaumont Tiles executive chairman Bob Beaumont said the sale to an Australian company with strong values and a similar culture was a good outcome.

“After 53 years dedicated to a business that my dad started in South Australia, it’s time to retire,” Mr Beaumont said.

He said it had been a difficult decision to sell. The purchase price wasn’t disclosed. The Beaumont business began in 1960 when Mr Beaumont’s father started selling tiles to builders from a garage next to the family home in Adelaide.

Chief executive Danny Casey will remain at the helm of Beaumont Tiles and its national support office will stay in Adelaide.

Bunnings went through an arduous regulatory process for a previous acquisition of a standalone business in South Australia called Adelaide Tools, and finally gained approval last year for the bolt-on acquisition a year ago. The ACCC initially raised concerns about the impact on competition. Adelaide Tools has five stores, all in South Australia.

Lovisa has bolstered its support team in both its Melbourne and Germany headquarters as it readies to expand further across Europe following its acquisition of the Beeline retail business in November 2020.

The Australian jewellery retailer will enter Germany, Switzerland, Netherlands, Belgium, Luxembourg and Austria for the first time when the deal finalises in May 2021.

Of Beeline’s 114 locations, Lovisa will convert and open approximately 90 stores, with the remainder already closed or to be shuttered after completion.

MD Shane Fallscheer welcomed the expansion.

"We are very excited that this transaction gives us the opportunity to add six new countries to our global store network and provides us with a strong base and quality team to grow the Lovisa brand further in these markets and into the future." 

Lovisa will also launch local eCommerce sites in Q4 to support its new bricks-and-mortar stores, trading the websites in local currency and languages.

Lovisa welcomed the Beeline business with €11.8 million of cash in the business at handover, after paying only €70 (70 Euros) for the shares in Beeline.

The acquisition was cash-flow positive immediately, with the acquired cash offsetting €6 million in implementation costs and aggregate capex and working capital investment.

Tommy Hilfiger has launched a brand new 2,385 square-foot store in the Chatswood Chase shopping centre, bringing the brand’s global store concept to Sydney.

The new store fuses the brand’s heritage offer with “clean, modern” finishes and a bright aesthetic, while also taking into account the current retail environment – pandemic precautionary measures have been implemented around the store to ensure adequate social distancing and safety for all staff and customers.

The store showcases the latest Tommy Hilfiger collections, such as Fall 2020 and Spring 2021, which bring together sportswear, jeans, accessories, footwear and underwear for both men and women.

The launch is part of a larger expansion into Australia, as Hilfiger himself hinted at in 2019.

“We’re really energising our brand, we’re expanding our brand worldwide but here in Australia, we have a very large and growing fan base, so we’re bringing all the latest product here – a lot of new Tommy Jeans styles, a lot of new accessories footwear, all the new fashion from collaborations with Lewis Hamilton and Zendaya,” Hilfiger said.

“We’re really energising the brand in terms of opening new stores and really bringing the people in Australia the same exact energy and product that we have in Europe, the US and other parts of the world.”

The new owners of collapsed discount department chain Harris Scarfe are planning to open 50 new stores of the once-struggling chain in the next five years, despite increasingly staunch competition from corporate competitors Target and Big W.

In an interview with The Age and The Sydney Morning Herald, Spotlight Group executive deputy chairman and rich lister Zac Fried said the company had been very pleased with Harris Scarfe’s performance in the retailer’s portfolio, which also includes fabric retailer Spotlight and outdoors merchant Anaconda.

“Harris Scarfe is well on its way to its former glory, and we’re very happy with its performance to date,” he said. “Like Spotlight and Anaconda, we’re hoping it’ll be part of the business for many many years to come.”

Multibillion-dollar retail giant Spotlight Group is Harris Scarfe’s fourth owner in the past seven years, with the brand owned by South African retailer Greenlit until mid-2019 when it was acquired by private equity firm Allegro. Months later, it entered administration before being bought by Spotlight last March.

Mr Fried said since acquiring the business, Spotlight had been undertaking a full revitalisation of the brand, including re-educating staff, refreshing IT systems and improving the company’s marketing.

“We’re just about to sign off on a fairly large capex in the multimillion-dollar range to redo all the existing stores,” he said. “So that’s getting the signage up to date, tweaking store designs, and lifting Harris Scarfe up to the same level as Spotlight and Anaconda.”

With this revamp underway, Mr Fried - who runs the Spotlight Group alongside his uncle Morry Fraid - has now set his sights on opening new locations.

“There’s going to be a lot of growth there, we want to get it back to 100 stores fairly quickly,” Mr Fried said. “We don’t have to rush to do it over 12 months, it can happen over a five-year period, but we’re going to do it pretty quickly.”

Zara owner Inditex said on Wednesday its net profit fell 70 per cent in 2020 to €1.1 billion ($1.7 billion), a steeper drop than expected, after a year of global lockdowns and dampened demand caused by the coronavirus pandemic.

Fourth-quarter net profit fell 53 per cent to €435 million out of sales of €6.3 billion as restrictions on shopping came back into force across much of Europe during the end-of-year Christmas season, the company said.

Around 15 per cent of its shops worldwide were still closed due to COVID-19 restrictions as of March 8, Inditex said in a statement.

Six analysts polled by Refinitiv expected a quarterly net profit of €602 million, while a poll of 24 analysts forecast full-year net profit at €1.3 billion.

The Spanish fast-fashion retailer, which operates 6829 stores across the world, including Australia, said total sales in 2020 were down 28 per cent from last year at €20.4 billion, as an unprecedented 77 per cent of online sales increase partly offset the pandemic’s negative effects.

Clothing sales at Inditex’s brands, as well as at rivals H&M and Next, began to register a slow recovery in the second half of last year from record lows when the COVID-19 pandemic first struck, boosted by online shopping and a quick rebound in China.

But in the United States and Europe, a return to pre-COVID sales has been frustrated by lockdowns extending well into 2021 and slow vaccine rollouts in many countries.

About 30 per cent of stores were closed on January 31, when the company’s fiscal year ends, and 52 per cent were subject to restrictions. The company expects almost all stores to be open by April 12, it said.

The retailer, which sells clothing in over 200 markets worldwide, mitigated some of the potential damage of the uncertainty of demand throughout 2020 through tight management of its supply chain, with inventory 9 per cent down year-on-year despite rocky sales.

Australia has notched up its biggest trade surplus on record after a surge in exports of iron ore and coal driven by rebounding demand for commodities and defying China’s trade bans.

After posting a 3.1 per cent gain in economic growth in the December quarter, Australia has shot out of the blocks with the seasonally adjusted trade surplus for January, up $3 billion to a record $10.2 billion – far stronger than market expectations of $8.3 billion.

The solid start to 2021 also included a respectable lift of 0.5 per cent in retail sales over January to $30.5 billion – still more than 10 per cent above where sales were this time last year.

“What a way to start the New Year – a fresh record high for the trade surplus,” Westpac’s Andrew Hanlan said.

In what was the 37th consecutive monthly surplus, total goods exports rose $2.4 billion to $34.9 billion driven by a 9.7 per cent jump in resource exports as the global recovery gathers pace.

Iron ore leapt 14.2 per cent to $16.1 billion from December to January. The value of iron ore exports are now up 60 per cent from a year ago. There was also optimism around coal exports, up 2.6 per cent. LNG exports rose 7.9 per cent.

China again accounted for the lion’s share, spending $12.5 billion in January alone, mostly on iron ore. But amid ongoing political tensions exports to China fell by 8.2 per cent while imports from China also fell 17.5 per cent to $6.7 billion – the biggest monthly decline in 11 months. Exports to China are down 2.1 per cent on a year ago.

Over January commodity prices rose 7.6 per cent in US dollar terms or 4.8 per cent in Australian terms. The spot iron ore price was at US$167 a tonne in January 2021, a near 80 per cent increase from the US$94 per tonne a year ago.

Treasurer Josh Frydenberg said the jump in iron ore prices and volumes gave the government confidence in its efforts to repair its budget after the biggest shock to the economy since World War II.

Pressure on Australian dollar

“Iron ore prices are substantially up, as well, travelling above $150 a tonne. Let’s not forget we put it in the budget at $55 a tonne free on board. That augurs very well for the budget,” he said.

The record trade surplus will likely add further upward pressure on the Australian dollar, something which the Reserve Bank has been attempting to restrain.

“The big question is how high is too high for the currency,” Commsec’s Craig James said. “The Reserve Bank governor may need to provide some clarity on this in a speech to be delivered next week together with observations on rising bond yields and record home prices.”

Combined with record low interest rates, a surge of more than 800,000 extra jobs in seven months, rising house prices, a jump in consumption and business investment, the bullish trade figures give further impetus to a sustained economic recovery.

Commonwealth Bank economist Belinda Allen said Australia would continue to post big surpluses this year.

“We expect large monthly surpluses to continue (averaging $7 billion per month over 2021),” Ms Allen said, “Firm commodity prices, assisted by a global economic recovery, should assist.”

Exceptional surge

The drag on the trade surplus was Australia’s service exports such as tourism and student education which are still in the doldrums. Service exports dipped $150 million in January to $4.9 billion. Before COVID-19 service exports reached a monthly high of $8.8 billion.

On the import side of the trade balance, consumption imports fell by 3.3 per cent in January with falls in toys, books and leisure goods, down 9.8 per cent, and textiles down 13.5 per cent. Household electrical imports did, however, rise by 10.6 per cent.

Softer consumer good imports usually point to softer retail spending. The final figures for seasonally adjusted retail spending in January showed a 0.5 per cent rise in retail sales to $30.5 billion. This is still 10.6 per ent higher than the same time last year. Online sales are up an extraordinary 63 per cent compared to January 2020.

The result followed a 4 per cent drop in December, which was expected given an exceptional 7 per cent surge in November with Black Friday sales.

“There’s no doubt retail sales have performed incredibly well in recent months,” Australian Retailers Association CEO Paul Zahra said.

“It is encouraging to see the returning strength of some of the discretionary categories of spending, which were heavily impacted by lockdowns in 2020.”

January may have also benefited from some increase in spending on retail services.

NSW enjoyed a 0.8 per cent gain in retail sales while Victoria, still enjoying a reopening from COVID-19 restrictions, recorded a 1 per cent gain in the month.

The sharp lockdown in Queensland had a noticeable effect on its sales, falling 1.5 per cent.

ANZ card spending data suggests retail growth in February may have started to slow, which could mean another fall in consumption imports for February.

Stockbroker Bell Potter has been tried on for size at Allegro Funds’ ASX hopeful Best & Less Group – and it’s a fit!

David Jones is shrinking its gourmet food business, closing three food stores in Victoria to stem losses that blew out to $12 million in the December half.

David Jones said on Monday it would close its Bourke Street food hall in Melbourne’s CBD next month and close its stand-alone Capitol Grand and its Malvern Central food stores in April and May.

However, it will invest more in the Elizabeth Street and Bondi Junction food halls and focus more on selling packaged gourmet groceries online.

Big W has spearheaded its fashion department overhaul, with its autumn/winter 2021 collection featuring trend-driven garments from $15.

Designed locally by an in-house team, the range featured prints and designs influenced by 70s boho style.

Big W senior designer Claire Harahap (pictured) confirmed the womenswear range is priced from $15 to $49. 

“The global nomadic look has been trending in the fashion capitals and highstreets across the world and is reflective of the times we are in, with more people working, entertaining and holidaying at home.

"We’ve taken inspiration from these catwalks and translated for our BIG W customer, bringing a relaxed approach to dressing that features beautiful, on trend 70s inspired boho prints and fabrics and detailing.”

BIG W’s range features a mix and match of neutral colours such as camel, olive, grape and marigold, with a hero print in paisley.

Volume peasant blouses and tiering are key across the collection whilst outerwear pieces include a metallic puffer with a chimney neck. 

Fabrics such as cable knitwear feature heavily alongside denim, tiered skirts and faux leather items.

Big W collaborator and stylist Donny Galella said the range will shake up the value market. 

“Big W is really turning high-end fashion on its head, championing affordable, easy to dress style that makes women of all shapes and sizes look and feel good."

David Jones' South African parent has appointed investment bank UBS to run the rule over its property portfolio in order to reduce debt, which could lead to the sale of its flagship stores, following a strong double-digit decline in sales amid the COVID-19 crisis.

In a trading update Wednesday, Woolworths Holdings also said its Australian lenders agreed to suspend covenant testing after it provided a loan of $75 million to David Jones. Woolworths also is offering an additional $25 million loan should the local operations need it.

"UBS Australia has been appointed to support [a review of the capital structure of the Australasian entities] and will conduct a full review of options relating to the Australasian property portfolio," the company said in a statement.

"Any proceeds generated as a result of our capital management initiatives will be applied to the repayment and cancellation of debt facilities."

The two flagship stores in Sydney and Melbourne could worth more than $800 million combined given David Jones previously offloaded its smaller Sydney Market Street building for $365 million.

David Jones has continued to trade in its 40-odd large format stores throughout the pandemic, but has been significantly impacted by lower foot traffic with store sales falling by 35.8 per cent in the eight weeks to April 30.

The department store was already suffering well before the virus hit. In February, David Jones said profits fell 57 per cent to $20 million in the December half due to heavy discounting, weak sales and slowing foot traffic.

Former Woolworths chief Ian Moir – the architect of Woolworths' $2.1 billion buy of David Jones in 2014 – handed over to former Levis Strauss boss Roy Bagattini in February. Mr Moir remains acting CEO of David Jones until a permanent replacement is found.

Mr Bagattini said on Wednesday that stablemate Country Road Group was severely impacted by the full closure of 280 stores given social distancing measures, which resulted in a 50.4 per cent drop in sales in the eight weeks to April 30.

He said the update reflects the "tough and unprecedented trading conditions that have dramatically impacted performance across the retail sector globally."

The only bright spot for the group was second-half online sales for David Jones which doubled compared with the prior corresponding period. Online sales at Country Road Group – which includes the Mimco, Trenery, Witchery and Politix brands – posted growth of 19 per cent in second half to date. CRG stores began their planned reopening as of 22 May.

Thousands of other retail stores have reopened their doors within the country's big shopping centres in recent weeks, with foot traffic steadily increasing as pandemic restrictions eased. Woolworths said the easing of restrictions has led to a positive uplift in footfall and an encouraging sales performance across David Jones.

Woolworths has long planned to operate a smaller David Jones network, but Mr Bagattini said COVID-19 has accelerated the talks with local landlords about a faster network restructure and reduction in floor space.

David Jones sold its Sydney CBD menswear location several years ago, and the women's store across from Hyde Park now houses the entire CBD business across 12 floors.

The Melbourne flagship store also had a revamp in recent years. Both could be sold and leased back as a result of the UBS review.

On Wednesday, Woolworths said contracts have been exchanged for the sale of its Bourke Street menswear building in Melbourne, with the sale price "in line with expectations".

David Jones' update comes as rival Myer kicks off its stocktake sale, offering discounts of up to 50 per cent off across manchester, cookware, homewares, beds and up to 40 per cent off certain women's and men's fashion. Myer has been slowly re-opening stores around the nation after a full network closure.

In April, Woolworth's had flagged a 20 per cent-plus drop in full year earnings due to COVID-19 decimating sales in clothing stores across Australia, New Zealand and South Africa.

The board on Wednesday scraped the final 2020 dividend and flagged that any distributions to shareholders will be suspended until the COVID-19 situation stabilises.