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Caleb Brown, the chief executive of Superdry, Volley and Clarks operator Brand Collective, said the stimulus package ending was creating anxiety for retail staff, who face at least one month of closures without JobKeeper support.

"I think many retail staff are acutely aware of their company's own [JobKeeper] qualification criteria, and that's creating a lot of fear, panic and anxiety," he said.

"It's unfortunate that the governments haven't been able to work together more closely to have a more comprehensive suite of announcements, to provide the level of certainty that I think our workers and the general public are looking for."

Layoffs would be a "last resort", Mr Brown said, but the ending of the JobKeeper safety net could lead to job losses at other businesses if additional support was not provided.

Shell service station operator Viva Energy's chief executive Scott Wyatt said the company may be forced to permanently shut its Geelong refinery if the road map targets are not hit by November, putting 700 jobs at risk.

"They've provided a road map, but it's a long road map, and there are some high hurdles that we have to clear to get there," he said. "We all need a pathway out of this that we can be confident in and that seems realistic and achievable. And I'm not sure that hit the mark [with the road map]."

Small business Ombudsman Kate Carnell said the state government's targets for reducing restrictions seemed unrealistic and may give some small business owners no other choice but to shut up shop.

In those situations, Ms Carnell said the Andrews government should "pick up the tab" for the costs of breaking leases on property or assets such as cash registers.

"It's totally unconscionable for the state government to make these decisions and then not pick up the tab for the costs that this is going to impart on on small retailers," she said.

Premier Daniel Andrews said he knew there were a lot of businesses that did not get the news they wanted in the state government's plan.

"If we could have provided a different series of steps, more things opened faster and done that safely, then, of course, that's what we would have done," he said.

"But there's no other option and I think that's well understood by every member of the government and well understood, I think, by the vast majority of Victorians."

Lord mayor Sally Capp called on the state government to urgently provide immediate additional financial assistance for businesses prevented from operating due to the restrictions.

She also called for a more flexible approach which allowed businesses to reopen sooner in a COVID-responsible way.

"I am also calling for consistency," Cr Capp said. "If the national definition for hotspots is 10 cases per day for three days, why not use this benchmark for reopening businesses and industries such as retail and hospitality?"

Monday, September 7: There are 1781 active cases of COVID-19 in Victoria, including 259 among healthcare workers.

Mr Andrews said the government would continue to this week consult with a wide range of businesses about the type of assistance they believed would be of greatest benefit before announcing a rescue package.

"We'll be as quick as we can be, but we have to give businesses ... that very direct opportunity to feed in about the types of assistance they want. Because it may vary one sector to the other. We'll do
that as quickly as we can," he said.

Mr Andrews would not comment on whether he would ask the Prime Minister to extend JobKeeper payments, saying he did not believe it was proper to lobby the government from the podium.

Sia Psicharis, who operates a beauty salon in St Kilda East, said she was preparing for more bad news ahead of Sunday’s announcement, however, she was still shocked at how "incomplete and inconclusive" the state government’s plans were.

"We’ve been closed since March and we were really waiting for something positive, but to be given this and having it all left open-ended, it was devastating," she said.

The Melbourne small business owner estimates she’s lost tens of thousands in revenue since lockdowns began in March, and is pushing for beauty salons to be permitted to open with a COVIDSafe plan once stage three restrictions are re-introduced.

Under the state government’s current plans, only hairdressers will be permitted to reopen on October 26 when restrictions ease back to stage three, with the rest of the beauty industry forced to wait another month to November 23.

"We lost Mother’s Day trade, we lost Father’s Day trade, and we were relying on the Christmas trade in November and December to roll us through our quiet time in January and February," Ms Psicharis said.

"We’ve always been known as the ‘hair and beauty’ industry, and suddenly we’ve been left behind when the hair industry has been allowed to function."

Chief executive of the Australian Retailers Association Paul Zahra had been calling for a staged reopening to begin next week and said the "incomprehensible" new restrictions would be a "death sentence" for many Melbourne retailers.

"If you took an evidence-based approach, for retailers who comply with COVIDSafe plans shopping is one of the safest activities in the COVID world," he said.

"Retailers are angry, they feel like they've been let down."

Turnover in clothing, footwear and accessories retailing rose 7.1% in July, according to new stats from the Australian Bureau of Statistics (ABS). 

Department stores also experienced an increase in July, rising 4% on a seasonally adjusted basis. 

ABS director of quarterly economy wide surveys Ben James said that the reintroduction of COVID restrictions in Victoria significantly impacted the fashion and footwear category in that state. 

"Retail sales in July 2020 were 12% above July 2019, with sales in household goods particularly strong, 29.4% above the same month last year. 

"Turnover in clothing, footwear and personal accessory retailing (7.1%) and cafes, restaurants, and takeaway food services (4.9%) rose across the country, with the exception of Victoria, where the reintroduction of Stage 3 stay-at-home restrictions in July partially offset these rises.

"As was the case in April, restrictions led to significant falls in these industries in Victoria," he said. 

Overall, Australian retail turnover rose 3.2% in July, revised down 0.1% from the preliminary figure of 3.3%. 

Online sales made up nearly 10% of total retail turnover in July, with eCommerce's contribution sitting at 9.8%, a slight rise from 9.7% in June.

In July last year, online retail turnover contributed 6.3% to total retail.

The majority of states across the country rose, with New South Wales leading the bunch at 5.9%, while its southern counterpart Victoria saw a 2.1% decline in July. 

Brendan Santamaria has been appointed as Seafolly’s new CEO.

Santamaria has been earmarked to fix, reset and grow Seafolly, paving the way to recovery through the challenging COVID-19 retail landscape whilst tapping into the brand’s local and international growth potential.

Santamaria has over 15 years of CEO experience in the branded goods industry, leading brands such as Everlast, Lonsdale and Disney.

In his most recent role as CEO of Designworks, he transitioned a private label apparel business into one of Australia’s largest branded apparel and footwear wholesalers.

Santamaria said he is thrilled to be joining the team in the current global environment.

“I am excited to be joining the team at such a pivotal moment for the brand and the global retail environment.

"Now is the time to shake things up at Seafolly and I see real opportunity for Seafolly to emerge post Voluntary Administration 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.”

Commenting on the appointment, L Catterton ANZ head Ondrej Ruzicka welcomes him to the team.

"Brendan’s appointment comes as Seafolly embarks onto a new chapter in its journey to further grow and elevate the brand that has been leading the Australian swimwear market for the past four decades.

"Brendan’s extensive leadership and retail experience will be a huge asset to Seafolly in the next phase of retail post Covid-19 and in bringing it closer to becoming the world’s most iconic brand in this exciting category.”

Online retail behemoth Amazon is negotiating a move to a new $1.5bn precinct being developed by the Charter Hall in Melbourne’s central business district in one of the largest office developments since the onset of the coronavirus pandemic.

The move would spark work on a 60,000sq m office skyscraper to be anchored by Amazon, with further space to be taken by government agencies, taking pre-commitments to about 40 per cent and allowing much-needed work to get under way across the city’s stalled economy.

The project was one of the largest fast-tracked by the Victorian government and is a boost for wider plans to reinvigorate the CBD after strict stage-four lockdown rules.

The project will create more than 2000 jobs during construction. Demolition of the site is well progressed and completion of the first stage is targeted for late 2022.

GDP figures released by the Australian Bureau of Statistics on Wednesday showed non-housing construction fell 3.1 per cent in the June quarter and was off 1.7 per cent on the year.

Amazon would come out of its existing building in Exhibition Street that is jointly owned by GPT’s Wholesale Office Fund and Singapore’s Keppel REIT. It d would be take expanded space of 12,000-14,000sq m in the Charter Hall project.

The impending deal is a sign that technology and co-working tenants could support the top end of the office market, with a series of commitments to new towers in Sydney and Melbourne keeping hopes alive even as vacancy levels are forecast to soar as white-collar employment shrinks and companies allow more staff to work from home.

In Sydney, flexible working group Hub Australia has signed up to the new Brookfield development above Wynyard station, and New York-based WeWork is forging ahead with plans to occupy an entire building, despite canning other city deals.

Technology players are also a big driver in Sydney, where there are relatively few other tenants in the market. Atlassian is developing a $1bn tower at a new tech precinct next to Central Station as it is looking to build up its office as a destination for entrepreneurship.

Amazon struck a deal two years ago to shift into a new Australian headquarters in a Charter Hall building in Sydney’s Market Street. It already occupies office space at 2 Park Street, jointly owned by Charter Hall and GPT.

Both Amazon and Charter Hall declined to comment.

Charter Hall in April won ­approval for the project at 555 Collins Street, Melbourne that will comprise 84,000sq m of premium office space and associated retail. Designed by Cox Architecture and Gensler, it has been pitched as a world-leading tenant workplace experience.

The first tower, at 555 Collins Street, will comprise about 50,000sq m across 34 levels and will house up to 5000 workers when completed. An adjacent tower 55 King Street tower will round out the precinct.

Charter Hall chief executive David Harrison at the time the project was approved said it was a “credit to the Victorian government that it is working to keep the economy moving by maintaining employment and investment and, in particular, to facilitate the recovery the Victorian economy will gain from shovel-ready projects”.

In Sydney, WeWork opened at heritage-listed 66 King Street, where it is anchor tenant following a $72m restoration. Owned since 2007 by property figure Phillip George, the 14-level art deco building on the corner of King and York streets spans 7300sq m.

Mr George backed the co-working concept, saying the building had been redeveloped as “an exciting co-working, retail and entertainment space” calling out the benefits of being in the middle of the city, near major transport and dynamic spaces.

Elsewhere in the city, Canada’s Brookfield signed up flexible workspace specialist Hub Australia to provide a free premium lounge to tenants in its $2bn Brookfield Place Sydney project above Wynyard station.

Hub Australia will take 4000sq m of space over two levels in the project’s new 27-storey office tower. Co-head at Brookfield Properties, Carl Schibrowski, said there were benefits of free breakout spaces for workers as well as access to premium, pay for service flex space.

“We wanted to bring a great flexible workspace offer to Brookfield Place Sydney to meet the growing demand from businesses for flexibility,” he said.

Brookfield Place Sydney will open in mid-2021.

Mosaic chairman Richard Facioni said on Monday the retailer had come to an agreement with Scentre Group but the terms of the agreement were confidential.

“We’re pleased to have reopened our Westfield stores over the weekend following a mutually agreeable outcome to our negotiations with Scentre Group," Mr Facioni said.

“We have had a long-standing relationship with Westfield enabling us to reach a solution that worked for both parties," he said. Mosaic shares jumped 18 per cent to 56.5¢ after plunging 33 per cent last week.

The dispute underlined growing tensions between retailers and landlords over how risks and returns should be shared in the $315 billion retail sector as foot traffic in shopping centres remains subdued and sales increasingly shift online.

Small- and medium-sized businesses are protected from eviction under pandemic regulations, which allow for proportionate reductions in rent. However, larger retailers such as Mosaic, whose sales plunged 16.5 per cent to $726 million in 2020, have been left to do battle with even more powerful landlords.

Mosaic's Victorian stores remain temporarily closed for health and safety reasons.

The company said the current market conditions are favourable to explore opportunities to expand the global customer base. 

“Following the acquisition of Avenue in October 2019, our online channels now represent two-thirds of our global business,” said Phil Ryan, City Chic CEO and managing director.

Ryan said in the past 12 months they have grown their active customer base by 278,000 and expanded their product offering into the everyday fashion category with Avenue and launched the intimates and playwear brand Fox & Royal which was developed from their acquired Hips & Curves brand.

“Our focus is on leveraging our offering across channels and regions as we continue to scale our business globally,” he said.

“The acquisition of Avenue has been successfully integrated within our operating structures and supply chain, with trading exceeding our expectations,” Ryan said.

“The success of this acquisition, which was earnings accretive in FY20, provides a blueprint for the potential purchase of the Catherines brand, which targets value-conscious women, but skews to different US states.”

The fashion retailer posted a 31 per cent increase in sales revenue in the 52 weeks to June 28 to $194.5 million with comparable sales growth of 0.4 per cent. 

It posted a global customer base growth of 72 per cent to 663,000 active customers with an online penetration of 65 per cent of total sales compared to the 44 per cent in the previous corresponding period. Underlying EBITDA was at $26.5 million, representing 6.6 per cent growth compared to FY19.

Normalised operating cash flow was at $20.9 million compared to FY19’s $21.5 million.

The company’s online website has grown globally posting 113.5 per cent growth compared to the previous corresponding period.

According to City Chic, its strong balance sheet has a net cash of $3.9 million as of June 28 and a debt facility of $40.0 million; further strengthened with $111.1 million equity capital raise post year end.

Sales in Australian and New Zealand fell by 4.8 per cent with sales growth of 9.9 per cent in the first half, followed by a 21.5 per cent fall in the second half driven by the impact of Covid-19 and store closures. ANZ trade improved with the reopening of stores, with sales down 26 per cent from the previous corresponding period in June 2020 compared to 47 per cent down from the previous corresponding period in April 2020.

US online websites, City Chic USA, Avenue and Hips and Curves, contributed sales of A$65.2 million in FY20 compared to A$10.7 million in FY19, largely driven by the expanded customer base from the Avenue acquisition for a 37-week contribution.

Ryan said the company is very well capitalised and remains focused on the execution of various growth initiatives including the potential acquisition and integration of the Catherines brand; improve engagement with, and experience of, the Avenue customer base, and migrate store customers to the online channel.

The company also announced it plans to continue expansion of lifestyles and categories online, expand into Everyday Fashion product stream in the southern hemisphere, drive brand awareness in the northern hemisphere, including adding new partners and building on trial in the UK and Europe, and continue to invest in enhancing customer touchpoints.

“In the early part of FY21, City Chic is pleased to advise that the company has continued to deliver positive comparable sales growth and the Avenue customer base in the US continues to be resilient,” Ryan said.

“However, City Chic acknowledges the economic impact caused by Covid-19 globally and the uncertain outlook for consumer demand.”

City Chic USA website’s strong growth momentum in the first half slowed and gross margins were heavily impacted in the second half due to Covid-19 and the drop in demand for City Chic’s major dress category in the US

Strong digital sales throughout FY20 and a sharp increase in the final quarter, helped Accent Group maintain sales and profit momentum despite the impact of hundreds of stores being closed for more than a month in Australia and New Zealand.

The footwear giant posted a 1.5 per cent increase in underlying sales to $948.9 million in FY20, and a 7.5 per cent increase in underlying net profit after tax to $58 million, thanks to a significant increase in online sales in the year and a bigger contribution from higher-margin in-house products.

EBITDA increased 11.8 per cent to $121.7 million, and EBIT was $87.2 million, up 8.2 per cent. These figures do not include the impact of the new lease accounting standard to enable a more accurate comparison with the prior year.

Accent Group’s positioning in the booming fitness and athleisure categories during the Covid-19 lockdowns via The Athlete’s Foot and Stylerunner, the pureplay fashion business it acquired in FY20, also bolstered its results amid incredibly subdued consumer sentiment.

The company’s chief executive Daniel Agostinelli credited team members, customers, landlords and suppliers for the strong performance.

“The outstanding efforts of our team who have adapted quickly to a fast-changing environment, along with the support of our loyal customers, landlords, and supplier partners, have delivered another strong financial result,” he said in an ASX statement on Thursday.

Digital growth key to result

Key to this result was the group’s quick pivot to e-commerce when the board decided to close all stores to the public at the end of March, according to Agostinelli.

Accent Group, owns and operates over 420 shoe stores in Australia and New Zealand across several retail chains, including Platypus, HypeDC, The Athlete’s Foot, Subtype, The Trybe and most recently Pivot, as well as distributing popular footwear brands, including Skechers, Vans and Dr Martens.

Shortly after deciding to close stores to the public, the company transitioned its entire physical retail network to “dark stores” to support the delivery of online orders from customers shopping at home.

Digital sales grew to $65 million, or 35 per cent of total retail sales, in the fourth quarter alone, a 142 per cent increase on the prior year.

Most of the people shopping online with the Accent Group were new customers, and the momentum increased even after stores started to reopen in May.

The company reported that online orders grew from an average of $200,000 per day in April to between $800-000 to $1 million per day in June. And it had its biggest month of digital sales ever in May, with $29 million. Agostinelli earlier this year referred to a “seismic” shift towards e-commerce.

In FY20 overall, digital sales were up 69 per cent on the prior corresponding period, representing 17 per per cent of total sales.

While group sales fell $55.7 million March and April, leading the management to temporarily reduce their remuneration by 80 per cent, the company said sales recovered “strongly” in May and June, driven by the digital performance.

All stores reopened in May, although some stores in New Zealand and Melbourne recently shut again due to a second round of lockdowns.

Unlike the first lockdown when the company stood down staff due to the store closures, all staff remain stood up. Accent Group has received wage subsidies from the Australian and New Zealand governments, which it used to return all permanent ANZ staff to full employment across May and June.

The group opened 57 new stores in FY20 and closed 12 where required rent outcomes could not be achieved. Agreements on rent reductions have been reached with the vast majority of landlords covering the period from April to December 2020.

Targeting 30 per cent penetration

Looking ahead, the company said it has experienced a strong start to the year across the business, including its wholesale division, where Skechers, Vans and Dr Martens all had record sell-ins for the second half of FY21.

Growth opportunities include the new Pivot concept, which offers a mix of sports apparel, equipment and accessories and has potential to reach up to 100 stores. The first store recently opened in Shellharbour, NSW, and is trading ahead of expectations, as is the Stylerunner business, which Accent Group acquired in November 2019, after it collapsed into administration.

The popular online retailer is set to open its first bricks-and-mortar store in the Melbourne suburb of Armadale this quarter, with an additional five stores to open in the second half of FY21. There are also plans for Stylerunner to develop an in-house range of athleisure, part of Accent Group’s focus on growing its “verticals” business, which currently includes in-house products across shoe care, socks and accessories.

The biggest growth driver, however, remains digital, and Accent Group is targeting 30 per cent e-commerce penetration in future.

To get there, it will continue to invest in the online shopping experience and digital marketing initiatives and roll out a new virtual sales team who will sell directly to customers from dedicated showrooms and stores via video and chat.

There are also plans to launch new e-commerce sites for Pivot, Hype DC in New Zealand, Dr Martens in New Zealand and Subtype in New Zealand, and new loyalty programs for Skechers and Platypus.

“The management team remains focused on driving digital growth and continued innovation,” Agostinelli concluded.

For the first time, Adore Beauty has a CEO who was not involved in starting the business 20 years ago.

Tennealle O’Shannessy has taken on the top job at the fast-growing online retailer from Seek, where she was previously managing director of the Americas.

She has replaced James Height, one of the co-founders of Adore Beauty along with Kate Morris, who served as CEO for the past 2.5 years.

Morris, the face of the business, was CEO for most of the company’s history, before handing the baton to Height and transitioning into the role of executive director in January 2018.

Both Height and Morris will now serve as executive directors, though Morris will continue to be the face of the business.

“We are thrilled to welcome Tennealle to the Adore Beauty team,” Morris said in a statement about the appointment.

In addition to O’Shannessy’s expertise in business operations, strategy, leadership and business transformation, Morris said her values-led approach was an important factor in the hiring decision.

“We felt that Tennealle clearly shared our values and would absolutely be the right person to come onboard as our new CEO. I am looking forward to working closely with her,” she said.

Morris and Height have worked with Tennealle for the past few months to ensure a smooth transition.

“Having built this business from the ground up over a 20-year period, our commitment to supporting the future success of Adore Beauty is unwavering,” Height said.

The appointment comes nearly one year after the co-founders sold a 60 per cent stake in the company to Quadrant Private Equity to accelerate Adore Beauty’s growth in the booming cosmetics sector.

Justin Ryan, managing partner at Quadrant and chairman at Adore Beauty, said O’Shannessy “adds further strength” to the leadership team and enhances its “capability to deliver the company’s future growth potential”.

For her part, O’Shannessy said the company is “well placed for is next phase of growth” and is excited to be part of the journey.

“I have admired Adore Beauty as a disruptive digital business and have been impressed by Kate and James’ focus on values, execution and continuous innovation,” she said.

“They have built an incredible business that implicitly understands their customers’ needs in a unique and personal way.”

Benefiting from the surge in purchases in homewares by Australians redecorating their homes during lockdown, Adairs saw group sales grow 12.9 per cent to $388.9 million during FY20 leading to a net profit of $35.2 million – up almost 16 per cent.

Online sales also grew 111 per cent to $124.2 million, and made up 32 per cent of total sales compared to 17 per cent a year ago.

“Despite the challenges and uncertainties placed on our industry and the broader economy by the Covid-19 pandemic I am pleased to report that FY20 was a good year for Adairs,” chief executive Mark Ronan said.

“Our CODB [up 1.8 per cent] benefitted from the receipt of Government subsidies, including JobKeeper, which have contributed materially to maintaining the employment of many of our team members.

“The government subsidies were helpful to our results, [though] it was clear that the company was performing well leading into this difficult period and would have delivered strong results had Adairs not been eligible for the subsidies.”

Adairs received $11.29 million in subsidies during the 52 weeks to 28 June, 2020. 

And while the Australian dollar fell slightly during the pandemic, the business’ underlying gross margin increase of 226 basis points more than made up the difference. 

This was attributed to a coordinated program of sourcing and retail pricing initiatives, combined with a focus on reduced depth and length of promotional activities.

However, Adairs is unwilling to commit to financial guidance for the coming year despite the fact it expects the increased focus on home renovation to persist while the pandemic remains due to the uncertainty in the market.

“We remain cautious about the next 12 months in light of the ongoing uncertain impact of Covid-19 on our industry in relation to severity and duration,” Ronan said. 

“FY20 showed that our business environment can change rapidly, however it also showed that the Adairs and Mocha teams can move quickly as circumstances require and that our omnichannel model gives us a competitive advantage in all markets.”

Total system sales rose 7.6 per cent to $8.23 billion over the year ending June (up 7.2 per cent on a same-store basis, excluding store closures). Company-owned store sales were up 3.7 per cent to $2.07 billion and franchisee sales rose 8.9 per cent to $6.16 billion.

The strong sales growth flowed through to profits, with earnings before interest and tax, (pre changes to lease accounting standard AASB16) rising 22.9 per cent to $654.8 million, beating consensus forecasts of $644 million.

The result included $22.3 million in wage subsidies overseas and subsidies of $7.6 million for Australian franchisees as well as $9.8 million in landlord support including rent abatements.

The roles affected include those in the retailer's central support centre, regional management and in UK stores. A significant proportion will be through voluntary departures and early retirement.

The retailer said there has been a “clear … material shift in trade” to online, and the redundancies will reflect that change. More colleagues will “multi-task” and transition between the retailer's food and clothing and home business.

M&S also expects to create a number of new jobs as it invests in online fulfilment, a new ambient food warehouse and reshapes its store portfolio over the coming year.

Total clothing and home revenue was down 38.5% year on year in the 18 weeks to 8 August. In the eight weeks since stores reopened, total sales have been down 29.9% compared to 2019. During that period store sales were down 47.9%, while online continued to perform strongly with an increase of 39.2% on the previous year.

It said performance had varied across the store estate: some newer, out-of-town stores are close to last year’s trading levels in recent weeks, however, legacy town centre stores and some shopping centre fascias remain “heavily impacted” by social distancing and reduced footfall.

The retailer said its clothing sales mix has undergone a substantial shift from office dressing and formalwear to casual clothing and leisurewear.

As part of its ongoing transformation strategy M&S plans to deliver a higher proportion of sales through digital channels, and it will relaunch its data and CRM platform.

The retailer has acquired 1.9 million new online clothing and home customers since the start of the year. In the last eight weeks online sales have represented 41% of total clothing and home sales.

Chief executive Steve Rowe said: “In May we outlined our plans to learn from the crisis, accelerate our transformation and deliver a stronger, more agile business in a world in which some customer habits were changed forever. Three months on and our "Never the Same Again" programme is progressing, albeit the outlook is uncertain and we remain cautious. As part of the programme to embed the positive changes in ways of working through the crisis, we are today announcing proposals to further streamline store operations and management structures. These proposals are an important step in becoming a leaner, faster business set up to serve changing customer needs, and we are committed to supporting colleagues through this time.”

The group has performed ahead of its scenario planning announced at year end in revenue and cash.

Discount retail chain The Reject Shop has reported a $1.1 million profit in FY20 off the back of strong demand for everyday essentials across the cleaning, grocery, pet care and toiletry categories.

The full-year result is a significant improvement from the $16.9 million loss the company recorded in FY19 and shows that the turnaround strategy – a three-phase plan to fix, reset and grow the business – is working, according to TRS chairman Steven Fisher.

“The new leadership team has stabilised the business – the company has returned to profitability, has significantly reduced its inventory and has a strong balance sheet,” Fisher said in a statement about the FY20 results on Wednesday.

First up, fixing the business

The company is currently in the fix phase, which is all about simplifying the business and cutting costs. This can be seen in the reduction of in-store labour costs from 15.4 per cent of sales in FY19 to 14.5 per cent in FY20, thanks to a new rostering system that uses machine learning, and a 20 per cent reduction in head office jobs in April, though this added $1.5 million in one-off redundancy costs in FY20.

Occupancy costs remained flat in FY20 at around 14 per cent of sales, which the company called “too high”. Leases will be renegotiated as they come up for renewal, with 87 leases in holdover or set to expire in FY21, and another 130 set to do so in FY22. The Reject Shop has 354 locations in total across Australia.

The company has also gained operational efficiencies from its new approach to merchandising, which includes using more shelf- and floor-ready products and displaying high-volume products on the pallets they arrive on.

Later, the reset phase will involve delivering on The Reject Shop’s lowest price guarantee, homing in a smaller number of core categories and rolling out a consistent and improved store layout across the network. The grow phase will involve initiatives to improve customer loyalty and drive new customer acquisition by opening new stores and ramping up online.

Chief executive Andre Reich said there is more work to be done in the fix phase before the company can focus on the reset and grow phases, but some of the groundwork for those phases has already been laid.

Shift in sales mix

The company launched a new e-commerce site this week, and it started the shift towards more essential products in the second half of FY20 in response to an uptick in demand during the global Covid-19 pandemic.

The company reported a material increase in sales in the second half of FY20, with the cleaning, grocery, toiletry and pet care categories performing particularly well. There was also increased demand for craft and stationery products, toys, garden items, furniture, electronics, hardware and kitchen items, reflecting the fact that many consumers were spending more time at home. At the same time, there was reduced demand for traditionally strong categories, including Easter-related products, luggage, party and events and cards and gift wrap.

Overall, FY20 sales were up 3.4 per cent on the prior corresponding period to $820.6 million. Comparable store sales were up 7.1 per cent in the second half, up from 0.5 per cent in the first half, equating to a 3.5 per cent year-on-year increase.

The shift in sales mix towards lower-margin essential products rather than general merchandise contributed to a decline in gross margin by 125 basis points to 40.9 per cent. This also reflects the impact of markdowns taken on aged inventory in Q4 and the expectation of further markdowns planned for FY21, as well as the higher supply chain costs associated with higher sales in the second half.

However, reduced shrinkage helped the company grow gross profit to $342.4 million, taking into account the new lease standard. This was up on FY19.

Thanks to the cost-cutting measures outlined above, The Reject Shop grew EBITDA to $123.4 million in FY20, taking into account the new lease standard.

Excluding the new standard, FY20 EBITDA was $23.7 million, up 30.1 per cent on FY19. The company did not receive any wage subsidies under the JobKeeper program in the second half.

Statutory net profit after tax was $1.1 million in FY20. Not including the new lease standard, NPAT was $2.7 million. Either way, the company is back in the black after recording a $16.9 million loss in FY19.

Well-positioned to navigate uncertainty

The Reject Shop ended the 2020 financial year with a net cash position of $92.5 million, including $24.1 million from an equity raising, and no drawn debt. It had $70.9 million in inventory, a 30 per cent reduction on the prior corresponding period. Its existing banking facilities have also been extended from March to August 2021.

The board declined to declare a final dividend in FY20, given the recent equity raise the company’s current focus on fixing the business.

“The Reject Shop is well positioned to navigate the uncertain trading environment with its improved profitability and strong balance sheet – though there is more work to do to fix the company before we reset and grow,” Reich said.

However, the retailer's statutory net profit after tax sunk 20.9 per cent to $110.2 million due to a slew of one-off items affecting its bottom line, including $17.1 million in wage underpayment and remediation costs relating to its $62 million underpayment scandal.

Excluding the one-offs, which also include $5.5 million in restructuring costs and a $6 million adjustment for a new accounting standard, the company's NPAT rose 1 per cent to $154 million.

Online sales accounted for 10.2 per cent of Super Retail's total sales after growing nearly 45 per cent across the year, a result Mr Heraghty said was impressive given Super Retail's traditional retailing roots.

"We've been investing in online for some time, and I think we were able to get maybe a little bit more than our fair share of online sales," he said. "We've been able to hold our own with the pure plays, and for a traditional retailer, that's a big deal."

Mark Christensen, a fund manager at Super Retail shareholder Pengana Capital, said the company's online performance was "impressive" and the retailer remained well-placed to benefit from international travel being shut down.

"Not only are international travel budgets being re-diverted, but they're actually being diverted into domestic travel and domestic experiences, so that plays into Super Retail's portfolio quite well," he said.

Supercheap Auto sales rose 7.6 per cent to $1.1 billion and segment earnings jumped 11.9 per cent. Rebel sales grew 3.3 per cent to just over $1 billion.

However, the company's outdoor apparel division MacPac struggled, with sales falling 5 per cent to $131.9 million and earnings sinking 44 per cent to $7.2 million as the New Zealand-centric retailer suffered from the country's mandated seven-week shutdown.

MacPac was eligible for both JobKeeper and the New Zealand wage subsidy, comprising of $6.5 million in total stimulus, all of which went towards staff salaries.

Mr Heraghty said the company's board had considered the stimulus received when deciding Super Retail's dividend payout and executive bonuses. The company declared a fully franked final dividend of 19.5 cents per share, down 30 per cent on the prior year, payable on October 2.

"None of those government subsidies flowed through into the profit result, therefore none to the dividend and therefore, no manager or executive received a bonus because of government subsidies," he said.

"We have been extremely judicious to make sure that we're playing this very straight."

Super Retail's net cash at the end of the financial year was $37.3 million, excluding lease liabilities, aided by the company's $203 million capital raise completed in June.

Shares jumped 4 per cent to $10.97 in early trade before easing to $10.62.

Earlier this month it closed about 250 stores in Melbourne and regional Victoria for at least six weeks during stage four and stage three restrictions.

Last week landlord Scentre Group locked 129 Mosaic Brands stores in Westfield shopping malls in a dispute over unpaid rent.

Same-store sales in the June-half plunged 26 per cent after store closures and were down 15 per cent excluding store closures.

The group slashed operating costs,cancelled or delayed orders, which led to a 50 per cent fall in inventories, extended payments to suppliers, negotiated rent concessions with landlords and negotiated an extension of its working capital facility with ANZ until July 2021. Mosaic received about $31 million in government subsidies including JobKeeper.

Chairman Richard Facioni said although foot traffic and sales in July remained substantially below the prior year, cost reductions and continued focus on margin had helped deliver positive comparable store margin growth for the month.

No final dividend was declared and the group, which ended the year with net cash of $3.6 million, cancelled its interim dividend.

The Iconic has launched a new website called The Iconic Outlet, where an assortment of men’s, women’s and kids’ fashion and sport products are available at steep discounts.

Savings start at 50 per cent off or more, with some tops priced as low as $10 and shoes as low as $15 in a special launch offer.

Brands include popular Australian fashion labels, such as Mossman, Rolla’s, Talulah, Bec + Bridge, Shona Joy, Finders Keepers, Rolla’s, Outland Denim and Cotton On, as well as major international names like Calvin Klein, Tommy Hilfiger, Boohoo, Topshop and Adidas, and The Iconic’s private label brand Atmos & Here.

More brands, categories and tech features are slated to launch in the coming months.

“[I]t’s outlet shopping unlike we’ve ever known here in Australia and New Zealand,” Erica Berchtold, The Iconic CEO, said in a statement about the launch.

While The Iconic Outlet will operate as a separate site, it will offer the same fast delivery options and seamless customer experience as the main platform. It will also allow shoppers to use the retailer’s Considered function to shop by a range of environmentally friendly and ethical filters.

The outlet store had been planned for some time, according to Berchtold, but the company decided to fast track the launch due to the changing needs of consumers and brands in the aftermath of the global coronavirus pandemic.

Like traditional outlet stores, the new online store enables brands to clear end-of-season stock and reach more cost-conscious customers who may not buy their products at full price.

DFO regional manager Michael Quinn believes affordability is front of mind for shoppers even as life gets back to normal in some parts of the country.

“As life has returned to a relative normal pace across Brisbane, we’re seeing shoppers come back in-centre, which is fantastic to see, but it is affordability which is primarily driving their purchasing decisions,” he said in a media release.

DFO Brisbane has reported an uptick in demand across its fitness, apparel and homewares categories, with the owner of one homewares retailer seeing a 10 to 20 per cent sales increase for some products.

“Pasta machines, cocktail shakers, Spanish gin glasses, craft beer glasses, pizzas stones; these are a few of the items that we’re currently selling 10 to 20 times more than normal. People have started cooking again and are loving it,” Gordon McCone, the owner of Jones & Co and Lemon Ginger Kitchenware Outlet, said.

While skincare and cosmetics in China are usually subject to mandatory animal testing, Mecca has found a loophole in selling through TMall Global, an online marketplace that accounts for more than 30 per cent of the country's beauty sales and where testing is not required.

Launching the new market in the middle of a pandemic was "not ideal", said Ms Horgan. Lack of international flights has made distribution to China difficult, and Ms Horgan will attend the store's launch for more than 100 Chinese influencers and editors via live-stream from her home in Melbourne, where she is under stage four restrictions.

"We started in 1997 with seven international brands that we loved and nurtured and grew," Ms Horgan said. "The Australian customer now understands those brands. That's what we are doing in China, where Australian brands are perceived as having authenticity and high quality."

As for opening a bricks-and-mortar store in China, Ms Horgan isn't saying no. "We’re firing our bullet. We will learn, through TMall Global, everything we can about our customers and market. We will make sure our offer hits the bullseye.

"If we are successful in that, it opens up every opportunity for us. We are a bricks-and-mortar operator, and we offer something very unique in-store. We would love to replicate that in other markets. But let's crawl first and then see if we can walk and run."

It was a year of two "remarkably different halves," Vicinity chief executive and managing director Grant Kelley said.

The steep decline in values mirrors rival Westfield which also expects its portfolio to plunge 10 per cent over the same period.

Foot traffic in Vicinity’s malls in states that are largely free of harsh social distancing restrictions has bounced back to near pre-COVID levels. “What we’ve learned is that as state economies move into a post-COVID world, they do so rapidly and shopping picks up quickly,” he said

But retail landlords haven’t fully escaped the infection zone yet.

A severe six-week lockdown in Melbourne and restrictions in other parts of Victoria are set to decimate earnings as traders close bricks and mortar stores and instead focus on online sales.

Nearly half of Vicinity’s assets and earnings are in Victoria.

The group’s funds from operations per security were 13.7¢, down from 18¢ in the 2019 financial year. Its distribution per security will remain at 7.7¢ after Vicinity decided to scrap its second half distribution payout and refrain from providing any forward guidance.

Shares in the retail focused landlord fell 4 per cent by mid afternoon trade to $1.29.

The Iconic has made a strong play for the Australian sporting apparel, footwear and accessories market with a new TVC advertisement. 

Entering the sports market four years ago, the eTailer now stocks 100 international and local sports brands including Nike, P.E Nation and Adidas. 

The new ad showcases The Iconic's sports product offering and delivery proposition and is supported by a site refresh that features a new landing page that mirrors the creative used in the TVC. 

The Iconic CMO Alexander Meyer said that the ad is just the beginning for the business in the sports space. 

"When we entered the sport market four years ago we wanted to ensure we did this in an iconic way.

"Our latest sport TVC does just that.

"It captures the same sense of liberation and self-expression that’s embedded across our entire business, while reminding our customers that we have the best sports brands, the best sports products and the best delivery across the country.

"The Iconic is the premier destination for sport in Australia and New Zealand, and this is only just the beginning," he said. 

Trading through lockdown and making a strong commitment to the health and safety of its team has paid off for JB Hi-Fi Group, which on Monday revealed an 11.6 per cent increase in sales to $7.9 billion during FY20. 

The result, driven by customers decking out their home offices with new electronics and spending on TVs, audio and small appliances, led to a statutory net profit after tax increase of 21 per cent year-on-year to $302.3 million. 

In Australia sales grew 12.5 per cent, while the New Zealand business suffered the impact of mandatory store closures with a sales decrease of 5.7 per cent. 

And in an environment that has seen many of its contemporaries struggle, JB Hi-Fi has flourished, according to CEO Richard Murray. 

“This is a strong result in the most challenging of times,” Murray said.

The result was achieved through the business’ five competitive advantages – it’s scale, low cost operating model, store locations, supplier partnerships and multichannel capabilities.

The group saw strong online growth as well, with online sales up 48.8 per cent during the year to $597.5 million, with Q4 sales in particular up 134.3 per cent. 

“The Group has worked very hard to maintain our position as the number one destination for tech, consumer electronics and home appliances, and we’re focused on maintaining a resilient retail model that rewards our customers and team for their loyalty.

“We’re obviously really proud of these results and want to call out the team for what’s been a massive period over Covid-19 – they just keep giving.”

However, JB’s warehouse team have essentially been working under Boxing Day conditions for months, Murray said, and due to the extreme level of demand the business is beginning to run into supply issues.  

“The [warehouse} guys are working full-time just to get stock into the business… [but] I’m pleasantly surprised with the inventory we have on hand that we can drive the sales numbers we are,” Murray said.  

“If you had asked me 12 months ago if we could achieve double digit sales growth with this level of inventory, I wouldn’t have thought so, so it’s a great outcome.”

In New Zealand, gross profit fell to $36.8 million, compared to $40.8 million the year prior. Sales were materially impacted, but the business was able to mitigate the financial losses due to claiming $3 million in wage subsidies from the New Zealand Government. In Australia JB Hi-Fi Group did not receive JobKeeper.

Murray declined to give a sales outlook into FY21, though said the group has seen online sales accelerate in Victoria following the rollout of Stage 4 store closures.

“This, combined with continuing sales momentum across the rest of Australia, has resulted in the group achieving strong sales growth in August to date,” Murray said.

David Jones parent Woolworths Holdings has declared asset impairments in its store fleet, due to the ongoing impact of the Covid-19 pandemic across its operating markets. 

Sales at the Australian department store chain fell 19 per cent in March, and Woolworths Holdings warned that trading conditions group-wide had continued to suffer.

“Covid-19 had a significant impact on the performance of the group in the second half of the financial year, and it is expected to do so for at least the remainder of the calendar year given the fluid and challenging environment,” Woolworths Holdings said in a statement on the Johannesburg stock exchange.

“This necessitated an assessment of the carrying value of assets [which consequently] has been impaired.”

Woolworths Holdings didn’t specify which of its businesses would be impacted.

Group chief executive Roy Bagattini said in May, however, that David Jones would be seeing an accelerated restructure of its store network and that discussions with landlords are already underway via a partnership with UBS. 

“Notwithstanding the significant challenges we currently face as a business, we are well placed to respond rapidly and effectively to changing customer dynamics and capture the market opportunities that arise [and] we remain focused on the implementation of the strategic initiatives that will address the current and emerging needs of all our stakeholders,” Bagattini said.

In July the business also reiterated its plan to further hedge its bets with a push into the convenience sector, with its high-end David Jones Food sites set to open in 21 new locations by the end of the calendar year.

“We are excited about the next phase of the rollout and the opportunity to share our quality offering with even more customers in Victoria and New South Wales,” said David Jones Food managing director Pieter de Wet.