News

6 Aug, 2021
Frasers Group’s Mike Ashley to relinquish CEO role
The Guardian

Mike Ashley, the owner of Frasers Group, is reportedly preparing to step down as chief executive of his retail empire.

Ashley is expected to assume the role of deputy chairman of Frasers Group in an announcement that could come as soon as Thursday. alongside the company’s annual result, according to the Daily Telegraph.

The media outlet said Frasers Group's head of elevation, Michael Murray, could step into the role of group CEO.

Drapers has contacted Frasers Group for comment.

6 Aug, 2021
Slower population growth to curb retail sales, rent and store growth
Financial Review

Retail sales and rent growth will slow and fewer new stores will open over the next decade as retailers and property owners respond to a drop in population growth triggered by the pandemic and review forecasts for less long-term population growth.

Demand for retail floorspace from population growth alone has averaged about 750,000 square metres a year since 2006, equivalent to five Chadstone shopping centres and including about 40 new supermarkets annually, according to a report by network planning company GapMaps Advisory.

GapMaps head Tony Dimasi said the drop in population growth and immigration during the pandemic and a reduction in forecast long-term population growth would have a significant impact on demand for retail floor space, rental growth, retail sales growth and growth opportunities for retailers.

“The retail sector has been very strong for two decades and the single most important thing that’s driven that is population growth,” Mr Dimasi told The Australian Financial Review.

Population growth is forecast to fall to about 0.1 per cent in 2020-21, 0.2 per cent in 2021-22 and 0.8 per cent in 2022-23 – down from 1.2 per cent in 2019-20 – according to the budget papers. Australia’s population will be about 25.88 million by the end of 2022, more than 1 million less than the 26.98 million forecast in the 2019-20 budget.

According to the government’s fifth Intergenerational Report in June, Australia’s population is likely to grow to 38.8 million by 2060-61, 3 million fewer than the previous estimate, due mainly to a drop in net overseas migration.

“If [the intergenerational report forecasts] are correct and we do end up seeing roughly 1.8 million fewer people by 2040 and close to 3 million fewer by 2060 than we would have otherwise, that certainly has significant implications [for retail floor space demand],” Mr Dimasi said.

“The rough rule of thumb is we have two square metres of retail space per person [so] 2 million fewer people means about 4 million square metres less in retail floor space needed.”

Shift to online shopping

That is equivalent to almost 27 Chadstone shopping centres of retail floor space.

“There will be generally less floor space built than we’ve seen in the last two decades,” he said.

Growth in retail rents was also likely to be slower than it had been over the past two decades, due in part to the shift to online shopping, which accelerated during the pandemic and is expected to continue to outpace bricks and mortar sales growth.

“Because we have low inflation and we’ll have more moderate sales growth as a result of lower population growth for the next two to three years, I fully expect there will be very modest rental growth over the next two to five years,” Mr Dimasi said.

The veteran retail and property adviser, who has been in the industry for almost 40 years, expects retail sales growth, which has averaged 4 to 5 per cent per annum over the past two decades, to slow by one or two percentage points a year over the next decade.

Food retailers are reviewing plans for new supermarkets and convenience stores in response to the drop in immigration during the pandemic and the step-change in online grocery sales.

Coles chief executive Steven Cain warned in February that the food and grocery sector might struggle to achieve the sales growth it once enjoyed because immigration, which historically generated a third of annual growth, was likely to remain low.

However, Mr Dimasi said there were few signs that retailers and property owners were scaling back expansion plans.

“They are looking past the short-term noise and looking at where the opportunities are for their particular business,” he said.

Mr Dimasi is sceptical about many of the forecasts in the 2021 Intergenerational Report, pointing out that Australia’s current population of 25.7 million is almost 3 million greater than was projected at this point in the 2002 report.

“The reality is that immigration levels have varied enormously and continue to do so – we should not necessarily be taking these kinds of projections at face value,” he said.

“I wonder whether governments of any persuasion will be able to sit by and let it happen given how important population growth has been to our economy and how critical net immigration has been to population growth – my expectation is initiatives will be taken to change the situation.”

 

6 Aug, 2021
Nick Scali profit doubled in FY21, online up 510 per cent
Inside Retail

Nick Scali has doubled its profit in the last year, with NPAT reaching $84.2 million, due to a pick up in online sales and relevance in New Zealand.

During FY21 the business was able to cut its expenses as a percentage of sales, while also increasing total revenue by 42 per cent to $373 million and gross margin by 80 basis points.

“The most pleasing aspect of our of FY21 result,” said managing director Anthony Scali, “was the ability of our distribution network across Australia and New Zealand to deliver the materially elevated sales revenue whilst maintaining the same level of costs as FY20.”

Sales in New Zealand also grew 95 per cent during the period, and same store sales grew 40 per cent, while overall online sales grew 510 per cent from $3.3 million in FY20 to $18.3 million.

And, looking at the year ahead, Nick Scali is positive despite the initial setbacks experienced in July 2021 by the lockdowns spread throughout Sydney, Victoria, and South Australia.

Future growth is expected to come from an increasingly accelerated store rollout and online penetration, with online having growth 88 per cent during July compared to the same period of last year.

But, like most businesses trading in the retail space right now, Nick Scali won’t provide profit guidance for the first half of FY22 given the level of uncertainty present in the worsening situation in Sydney.

This is due to the threat posed by the current lockdown, as well as potential future lockdowns, challenges to the global supply chain, as well as the “continuing escalation of global shipping costs”, Nick Scali said.

6 Aug, 2021
‘Just the tip of the iceberg’: Retail spending collapsed in June with economists and retailers fearing worse for the September quarter
Business Insider Australia
  • Retail turnover fell 1.8% in June, thanks to a collapse in discretionary spending linked to lockdown restrictions.
  • Lingering lockdowns suggest Australia’s economy is on track to fall by 2% in the September quarter, said Sarah Hunter, Chief Australia Economist for BIS Oxford Economics.
  • Spending is unlikely to bounce back unless retailers receive further government support, industry groups say.

The collapse in retail spending for June is more evidence Australia’s GDP will contract in the September quarter, economists say, as industry groups say there’s no guarantee of a spending snap-back once harsh lockdown measures are lifted.

The Australian Bureau of Statistics on Wednesday released its detailed June retail turnover data, confirming preliminary estimates of a 1.8% decline over the month to $30.59 billion.

Clothing, footwear, and personal accessories took the largest tumble, recording a fall of 9.5% over the month, followed by department store turnover, which sunk by 7%.

Cafe and restaurants also dipped by 6%, with the main outlier being food retail, which rose 1.5% from May levels.

The data reflects the impact of widespread COVID-19 lockdowns in major centres across the country, which continued to constrain movement and spending a year and a half after the pandemic first hit Australia.

Victoria recorded the sharpest declines in spending, falling 4% over the month. That downturn is linked to the state’s fourth lockdown, which started in late May and stretched through to June 8.

New South Wales recorded the second most precipitous fall, down 2%, largely due to the lockdown measures which first impacted local government areas in south-west Sydney before spreading to the entire Greater Sydney region on June 26.

Those retail sale figures are a grim portent, said Sarah Hunter, Chief Australia Economist for BIS Oxford Economics.

“As the data largely predate impact of the current restrictions in NSW and Queensland, and the snap lockdowns and ongoing restrictions in South Australia and Victoria, the near term outlook is challenging,” she said.

“Retail turnover in July is set to record a sharp drop, with only a partial recovery likely for August.”

Combined with other limitations caused by the Greater Sydney lockdown, Hunter said the national economy is slated to shrink through the September quarter.

“Together with a pronounced fall in household spending on other services (travel, personal care etc) and the pause in construction in NSW, GDP is likely to contract by around 2% in the September quarter,” she said.

Fears for an extended spending downturn were echoed by Australian Retailers Association CEO Paul Zahra, who said the June figures are “just the tip of the iceberg”, given the most recent Victorian lockdown, plus July restrictions in Western Australia, South Australia, the Northern Territory, and more recently in south-east Queensland.

In June, the Reserve Bank of Australia Assistant Governor Luci Ellis said, “timely data on spending suggest that the snap-back after the shorter lockdowns imposed in parts of Australia this year has been almost immediate.”

Zahra today indicated he had little faith in the same uptick occurring again, unless even more financial supports are provided to struggling firms.

“Without adequate support after lockdowns are lifted, it is unlikely that businesses will snap back as they have previously and we fear the worst is still to come,” Zahra said.

Despite the June downturn, the latest ABS data suggests spending grew 0.8% over the quarter, and was 2.9% higher than the same period in 2020, when Australia experienced its first tranche of hardcore lockdowns.

6 Aug, 2021
Accent Group opens 150th Platypus store, sets sights on next 100
SOURCE:
Ragtrader
Ragtrader

Accent Group has opened the doors of its 150th Platypus store in Karrinyup, WA.

The 600m2 'Super Door' store is a key destination for Accent, housing 1,300 SKUs across brands including Vans, Adidas, Puma, Doc Martens and Nike. 

Key customer experience highlights in the store include a shoe recycling station called 'Imprint > Footprint.'

The station is kitted out with a basketball hoop so customers can ‘make their next shot count’ by dunking shoes through the hoop into the recycling box. 

Platypus GM Armando Pedruco said that the brand's bricks-and-mortar success comes from its enthusiastic store teams. 

"We are the go-to brand for youth footwear, but Platypus is much more than that and we want all Australians and New Zealanders to think Platypus when they’re looking for a shoe for any occasion.

"We’re striving to bring the magic back to bricks-and-mortar retail through exceptional in-store customer experience and innovative services. 

"Our strength lies in our passionate in-store teams who play a vital role in the growth of Platypus," he said. 

While celebrating the 150th store milestone, Platypus has its sights set on further growth, with plans to grow to 250 stores within the next three to five years. 

Regional locations will play a key part in the next phase of growth and is "key to its success in the years to come," the brand said in a statement. 

Accent Group acquired Platypus in 2007 when the brand had 11 stores across Australia.

Since then, the brand has also expanded into New Zealand with store and eCommerce and has launched several omnichannel capabilities including endless aisle, click and dispatch and click and collect. 

Platypus is one of Accent's leading retail brands which includes Hype DC, Stylerunner and the newly acquired Glue Store. 

 

5 Aug, 2021
3 Secrets To Rihanna's Business Success That Eclipsed Victoria's Secret And L'Oréal By Creating Relevant Brands For Today's Woman
Entrepreneur Asia Pacific

In 2019, Rihanna became the richest woman in the world of the music industry, with only 32 years she minted a fortune of 600 million dollars, even surpassing other greats such as Madonna, Céline Dion and Beyoncé . This rapid jump was due to her new facet as an entrepreneur, either in partnership with the French luxury goods company LVMH with whom she launched the Fenty Beauty makeup line, and as co-owner of the Savage X Fenty lingerie line in partnership with TechStyle Fashion Group.

How is it that a singer could become a great entrepreneur (and also well diversified) of beauty? Why not? Today we will discover the three secrets of Riri's business success.

1. Create, design and join the change that your market is crying out for

In a world where 91% of women are not happy with their bodies and where only 5% naturally possess the beauty standard shown in the media, the feeling that our body is out of the mold can be very common in women. women.

Even so, until 2018 we had lingerie shows like Victoria's Secret where the lack of diversity of body types, sizes and proportions no longer excited as a show and although there were some efforts to change, it seems that it was not enough. And then in 2018, Rihanna launched her first line of lingerie clothing with a clear statement expected by many: No matter what you are, Savage x Fenty is for you.

Filling gaps in the industry was presented as game-changer in representation and diversity , we no longer need our curves to adapt to a lingerie, now she adapts to us, we can already find color palettes that better match our tone of skin, what now responds to the expectation of a new woman who is accepted is reflected in the success in business of Savage x Fenty. Under the mantra that Riri herself shared at the launch "no woman should be left out, this is for all stages of femininity and all body types", with this exercise in cultural affinity in 2019 being only her second year of operations, she obtained sales of $ 150 million and in 2020 its sales doubled according to Forbes .

On the other hand, Victoria's Secret does not have such a good time: it canceled its lingerie shows that were televised, which incidentally for Ed Razek, its Chief Marketing Officer, were functions that sold a fantasy, and in recent years they have continued to close stores due to lower sales and their shares fell by as much as 40 percent.

2. If lemons fall from the sky, learn how to make lemonade

“Having lighter skin was not a problem at home, but it was at school. I didn't understand it. I only saw a lot of people of different colors and I was the whitest. The harassment continued until my last day there. ”Rihanna confessed when she made public that she was a victim of bullying at school. Like her, many African-American women or women with skin disorders (such as vitiligo, albinism, among others) did not feel identified on the shelves of cosmetics stores, nor did they feel considered as consumers.

At the end of 2017 Rihanna launched Fenty Beauty and it seems that at night inclusivity and diversity was the most in the world of beauty, although without being the first or the only one in this innovation, it seems that other players cannot replicate it, Not surprisingly, Fenty Beauty was recognized as one of the Greatest Inventions of 2017 by Time Magazine, for its balance between quality and price, as well as its inclusiveness rather than exclusivity.

Contrary to what other brands would do, Fenty Beauty launched 40 foundation shades, of which precisely the first to be sold out online and in stores were the deeper shades, which were the shades that empathize with neglected niches.

Thus, Rihanna channeled the empathy and emotionality that she experienced when she suffered bullying towards this market segment to launch her makeup line, something very similar to the story of Madame CJ Walker portrayed in the Netflix series A self-made woman .

Getting a brand to make so many women feel represented and included in one brand marked another success for Rihanna as she targeted a highly underserved segment that she was eager to consume, according to WWD Reports African American women spend $ 7.5 billion annually on cosmetics, 80% more than the rest (1.5 billion). Which made Fenty Beauty the business that made him the greatest fortune outside of music.

3. Break the mold of the traditional that your competition is not willing to break

How does a startup stand out in an extremely competitive $ 532 billion market? One thing is for sure: they cannot do what others do and that is precisely what Rihanna has characterized herself for even before she was a businesswoman.

With a business vision that seems more like a statement of equality: "Beauty for all", the Marketing approach they took was "show it, don't say it", so much so that not once was the word "inclusive" used in brand messages. Its commercial presentation showed 12 different women, each one equally exposed in close-up time and starring in different parts of the campaign alike, without supermodels, without influencers and with no indication that Fenty Beauty has room for the standard model of perfect beauty.

The diversity of the color palette was another way to show the “Beauty for all”, Fenty Beauty surpassed the majority of the best-selling foundation offer in 2017 in the United States; only Estée Lauder and Maybelline offered comparable deep shades at the time. Fenty Beauty even went so far as to offer lighter and very light options than any of the best sellers. So much so that the term "Fenty Effect" was coined as a wake-up call to the entire industry to go further and challenge the status quo, causing a chain reaction that other brands adopted when expanding their makeup lines.

Since the beginning of Rihanna's Fenty Empire, many women have been proud on social media wearing real and authentic beauty; from a woman wearing hijab to a mixed-race woman who no longer needs to mix shades to get to the one that suits her best. I encourage you to apply some of these inclusive marketing practical lessons in your business by helping to create or share authentic stories that are rooted in the culture of your market and that are emotionally meaningful to the customers you serve.

5 Aug, 2021
E-commerce soars in June as lockdowns bite
Inside Retail

Online retail sales accelerated 7.6 per cent in June, following a rebound in May from a down-note in April, according to NAB’s monthly online retail sales index.

In year-on-year terms the acceleration pushed June’s growth back into double digits, landing 18.1 per cent higher than a year prior.

According to NAB chief economist Alan Oster, this is indicative of the “considerable strength” of online sales during the month, given June 2020 was already 53 per cent higher than June 2019.

“Given the patterns observed over the past year, it is likely that this result has been strongly influenced by the lockdown period,” Oster said.

“Having said that, online sales growth accelerated in states and territories with and without lockdown in the month.”

Victoria led the sales growth on a month-by-month basis, up about 11 per cent, followed by the ACT, NSW, and South Australia.

And, in terms of industries, department stores saw 12 per cent growth during the month, while homewares grew just shy of 10 per cent and grocery and fashion each grew almost 9 per cent.

Online sales had begun ‘slowing’ in April, due to being compared to the initial spike in e-commerce sales during 2020, but as Australia continued struggling with the Covid-19 outbreak sales have picked back up.

30 Jul, 2021
Older Australians are the least likely to buy into ethical fashion, but Gen Z support suggests an industry seachange is coming
Business Insider
  • Australia’s Generation Z shoppers have the highest ethical fashion consumption index score of any age cohort, a new report states.
  • Baby Boomers and older Australians ranked lowest, according to the 2021 Baptist World Aid Australian Ethical Consumption Report.
  • The findings suggest major manufacturers and retailers will need to adjust their practices to keep up with changing tastes and ethical mores

Australians in Generation Z are far more likely to focus on ethical fashion consumption than their older counterparts, according to a new report, suggesting retailers and manufacturers may have to alter their business practices to keep up with changing consumer demands.

In its latest Australian Ethical Consumption Report, released Monday, not-for-profit Baptist World Aid and research firm McCrindle state Aussies under the age of 26 had the highest ‘ethical consumption index’ score of any age cohort at 69/100.

The score ranks how likely respondents are to consider issues like child labour, environmental impact, and the use of living wages when considering their next fashion purchase, and how likely they are to match those beliefs with actual spending.

Generation Y and Generation X, spanning between ages 27 and 56, registered scores of 67 and 62, respectively. Baby Boomers notched a score of 58, while Australians over the age of 76 registered an index score of 55.

“We see younger generations, and women, more open to changing their habits” to align with the values of a “fair go for all”, said McCrindle spokesperson Ashley Fell.

The findings comport with consulting giant McKinsey’s State of Fashion 2021 report, which found the most successful firms will “be those that get a grip on the trends shaping the fashion landscape”.

Those firms will emphasise the “importance of sustainability through the value chain” and ” treat their workers and the environment with respect”, the report states.

The Baptist World Aid report also echoes the rise of online secondhand marketplaces in Australia, which bill themselves as facilitators of circular and sustainable fashion.

Depop, a digital marketplace which lets sellers list pre-loved designer garments, claims one in four Gen Z Australians have already signed up.

Competitor Poshmark, which launched in Australia early this year, claims to have kept more than 90 tonnes of jeans from landfill.

Three in five consumers have become more aware of the real-world impact of their fashion purchases in the past three years, Baptist World Aid states.

Survey respondents overwhelmingly said corporations are responsible for ensuring ethical practices in the fashion industry.

68% of those tallied said manufacturers and retailers are on the hook for those guarantees, while just 41% said the main responsibility falls on consumers.

But as younger consumers tailor their spending to mirror their beliefs, major roadblocks are keeping Australians from wearing their hearts on their sleeves.

A full 87% of those surveyed indicated they want to alter their spending habits to consume fashion more ethically, but just 46% said they regularly give their money to brands with ethical and sustainable bona fides.

Not knowing which brands use ethical sourcing, the cost of purchasing those goods, and the perceived difficulty of accessing ethical threads in-store are all keeping Australians from making good on their beliefs, Baptist World Aid states.

30 Jul, 2021
Major malls make a difference: AMP Capital
Australian Financial Review

Fund manager AMP Capital has completed close to $1 billion in redevelopment of two major malls in Sydney and Perth over the past two months in a big vote of confidence that the retail sector will eventually outpace its current travails, according to its head of real estate Kylie O’Connor.

Seven years in the planning and three years in construction, Karrinyup shopping centre in Perth opened 60 stores on Thursday, the first stage of an $800 million redevelopment that will be completed in October. With around 290 retailers, Karrinyup will be one of the largest shopping and lifestyle destinations in Perth.

“We will meet the brief of being one of the most dominant assets in the Western Australian market,” Ms O’Connor told The Australian Financial Review.

Last month AMP Capital put the finishing touches on its development of Marrickville Metro in Sydney’s inner west, a $142 million project that will add 11,000 sq m of retail floor space,

Both projects were steered by the fund manager on behalf of UniSuper, its mandate client, and represent significant investment into a sector that has been buffeted by a longer-term shift in consumption patterns toward e-commerce, along with the sharper disruptions caused by pandemic lockdowns.

A strong bounceback in foot traffic across its malls after the lifting of earlier lockdowns vindicates a confidence that major malls will perform well for their investors over the longer term, according to Ms O’Connor.

“We are confident that certain retail assets – dominant, strong retail assets with the right fundamentals like Karrinyup – over the long term will absolutely deliver for investors,” she said.

“Yes, you get short-term pain over periods like this, but if you are looking over the long term, we think it’s the right story if you have the right asset.”

Surveys by AMP Capital explain why customers are coming back to major malls as customers ease. It’s to mingle, meet, interact, and soak up experiences they can’t get online or in the comfort of their own homes.

“For most of these large shopping centres, over the last five to 10 years, the mix has materially changed. It’s less about shopping and more about non-retail services.”

The revamp at Karrinyup will double its footprint from 59,874 sq m to nearly 110,000 sq m. The project will bring together major brands, including Sephora and Lego, as well as Zara, H&M, Uniqlo, and Mecca. The redeveloped mall will also house Perth’s first Tesla supercharger station.

Ms O’Connor acknowledged the challenges of leasing up such a vast retail space during a period of disruption, but said East Coast-based retailers were buoyed by Western Australia’s relative resilience through the economic disruption of the pandemic.

“That offset the nervousness of retailers to go and open stores,” she said.

 

30 Jul, 2021
Wesfarmers likely to lob fresh bid after API rejects $687m offer
The Sydney Morning Herald

Takeover target Australian Pharmaceutical Industries’ (API) shareholders are holding out hope that retail powerhouse Wesfarmers will return to the table with a higher offer after having its initial bid rejected by the company’s board.

API, which owns the Priceline pharmacy chain along with a range of skincare clinics, knocked back Wesfarmers’ surprise $687 billion takeover bid on Thursday, telling the Perth-based conglomerate to come back with an offer that appropriately valued the business.

Wesfarmers, which owns retail chains such as Bunnings and Kmart, first announced its desire to acquire API two weeks ago, offering an unsolicited $1.38-a-share deal in a move to kick off the company’s foray into the healthcare and pharmaceuticals space.

At the time, analysts and shareholders suspected the bid was opportunistic and did not reflect the true value of API - a view the board agrees with, telling shareholders a detailed analysis of API’s underlying value had found the offer was too low and “not compelling”.

API said the bid was “opportunistic” in its timing of the offer given API’s weak performance in light of recent COVID lockdowns, and pointed to a predicted improvement in trading performance as conditions improve. It also noted the “strategic value” of the company’s Sister Club loyalty program. Wesfarmers has a significant loyalty operation through its part ownership of Flybuys.

“The board will only progress a change of control transaction on terms that recognise the fundamental value of API and are in the best interests of API shareholders as a whole,” the company said. Shareholders were told to take no action.

Simon Conn, portfolio manager at API shareholder Investors Mutual, said he thought it likely Wesfarmers would come back with a higher offer.

“The response today from the board shows that they think there’s more value there,” he said. “And now it’s a matter of sitting down with Wesfarmers and working out a path forward to try and encourage them to see where the value is.”

Similarly deputy head of investments at Van Eck, Jamie Hannah, agreed that another bid was likely on the way from Wesfarmers if the retailer was serious about its acquisition.

“Wesfarmers will have to go back to the drawing board and assess the cash flow and whether or not they really want to go into the healthcare space in this way,” he said.

A spokesperson for the Wesfarmers said the company was still considering the API announcement but noted it “continues to believe the Wesfarmers offer is compelling for API shareholders”.

But Wesfarmers may not be the only party interested in the pharmacy operator, Mr Conn says. The fund manager believes another company could also lob a bid for either the entire API business or just part of it.

“There could be an acquirer who is willing to pay a higher price than maybe what Wesfarmers was offering for just part of the business,” he said. “It depends how you extract the value.”

“But it’s clear there’s an auction that’s been started and it’s now up to the board to get maximum value for shareholders.”

30 Jul, 2021
Larry Kestelman grows fashion footprint, buys up Brand Collective
SOURCE:
Ragtrader
Ragtrader

 

Larry Kestelman's LK Group has acquired fashion retail house Brand Collective for an undisclosed amount.

The acquisition is the second in the fashion space for Kestelman, following his purchase of PAS Group in October 2020. 

Brand Collective houses a mix of owned-brands and licensed brands including Superdry, Clarks, Hush Puppies, Elwood, Volley, Shoes & Sox, Shoe Warehouse and Mossimo. 

The business employs more than 1,200 people across its operations which include product design, supply chain, warehousing/distribution and wholesale, retail and eCommerce stores.

Kestelman's acquisition of Brand Collective – which has a focus on footwear – will complement PAS Group's focus on fashion. 

"PAS is about 70% fashion and 30% shoes, [Brand Collective] is about 70% shoes and 30% fashion," Kestelman told the Australian Financial Review.

"Between the two businesses, we’ll end with about 50/50 shoes and fashion and 50/50 between retail and wholesale operations. 

"We’ll now have in the group 250 free-standing stores and 117 concessions in department stores and a comprehensive online and wholesale business," he told AFR. 

The acquisition comes as no surprise to many, after Kestelman told Ragtrader in January that he was interested in pursuing further buyouts. 

"We're looking to grow; we're looking to bolt-on brands and if we believe it's a great brand and we can add value to it we are certainly interested in acquisition," he told Ragtrader in January. 

"At a time where a lot of retail is struggling and going backwards, I think we've got a great supply chain and we do things pretty well.

"If there's businesses out there that we think we can add value to, we are certainly interested in looking at anyone who's thinking of selling out or bringing licenses to Australia.

"We're private equity company, we've got the capital to do it," he said. 

Based on this second acquisition, it would appear Kestelman has an appetite for fashion businesses that have a mix of owned and licensed brands. 

PAS Group owns Review, Black Pepper and Yarra Trail and also manufactures for brands including Everlast, Lonsdale and Slazenger through its licensing business Designworks. 

23 Jul, 2021
Reinventing vitamins: Inside JS Health’s overseas expansion
Inside Retail

What started out as a personal blog for Jessica Sepel during her studies in health and nutrition over 10 years ago, laid the foundations for what is now leading wellness and lifestyle brand JSHealth. 

The small but loyal community of followers Sepel built up over the years now stands at more than a million.

“I’m very grateful for that because the community could see that I had a genuine desire to help. The product is an extension of that and it happened eight years after building that community,” Sepel told Inside FMCG.

Sepel, a clinical nutritionist by trade, launched JSHealth in 2018 alongside her husband Dean, as co-founder and CEO.

Today, the brand boasts 16 vitamin formulas and the JSHealth app, a subscription offer that includes a digital nutrition clinic, healthy recipes, daily meal planners, workouts, guided meditations and more. 

Reinventing vitamins

Through her work as a nutritionist, Sepel learned about the benefits of therapeutic doses of vitamins and went on to develop a range of her own featuring the purest ingredients. The products have proven popular not only with consumers but with celebrities from J.Lo to the Kardashians. A JSHealth product sells somewhere in the world every 27 seconds.

JSHealth vitamins are quite different from others on the market, particularly around the packaging and marketing of the products, which lists two areas of concern that the formulation addresses, such as Hair + Energy and Detox + Debloat.

“JSHealth reinvented the space … There wasn’t much innovation in the vitamin sector, it’s quite a traditional market and it can be quite overwhelming. I wanted people to look at our product and know how it was going to help them straight away,” Sepel said. 

“One formulation tackles two big concerns in one, so it’s very important that formulations are specific about the problems they solve. The whole premise of JSHealth is an achievable, sustainable, simplified approach to living a healthy life,” she said. 

With more and more people conscious of looking after their health based on the events of the last year, the business is going from strength to strength. The online business grew by 800 per cent during the pandemic. 

Taking health to the world

The vitamins business is sold direct-to-consumer online and through some boutique bricks and mortar retailers in Australia. Perhaps most impressive about the brand is that 70 per cent of its customers are returning.

The brand has also expanded into overseas markets with an online presence in the UK and US and is soon to sign with major retailers in both markets. Next up is Asia. 

“We’ve only just launched into the UK six months ago so it’s a very new journey for us. But it’s on par with the Australian business in how fast it’s grown, it’s crazy.” said Sepel.

“The next step for us is the Asian market. We started that about two to three months ago but doing that really slowly and carefully.”

The global team, across Australia, UK, US and China, is now 30-strong. 

Strength from setbacks

It hasn’t been an easy ride, however. Sepel said there were many failures along the way. But having to deal with challenging times in her personal life gave her the strength to push forward in business. 

“[These personal issues] actually made me a stronger human being. I always say business is just constant issues, constant challenges, nothing about it is easy, but nothing surprises me any more. I don’t really react when something really horrible happens or stressful happens. Not much can reach out to me at this point, because I’ve had to really strengthen up.”

A passion for health and nutrition is what motivates her to continue to drive the business to new heights. 

“I wake up and I’m so excited to help people live a healthy life. The business is an afterthought.”

23 Jul, 2021
JB Hi-Fi predicts record year, though lockdown hurts fourth quarter
Inside Retail

Electronics retailer JB Hi-Fi will deliver record sales and earnings growth for FY21, according to preliminary results released to shareholders on Tuesday.

According to the business, sales grew 12.6 per cent over the course of the year to $8.9 billion, while earnings grew 53.8 per cent to $743 million and net profit reached $506 million – a 67.4 per cent growth on a year prior.

Outgoing JB Hi-Fi chief executive Richard Murray, who will jump ship to lead Premier Investments in August, put the group’s success down to its continued focus on the customer, as well as ongoing investments in its online business and supply chain.

“[This has] enabled us to seamlessly meet our customers’ increased demand both instore and online,” Murray said.

“I’d like to thank our over 13,000 team members who have continued to do an incredible job and worked tirelessly throughout this period. As I’ve said before, our team members are our number one asset and our most important competitive advantage.”

During the period between April 1 and June 30, however, the group’s Australian businesses struggled with varying lockdowns around the country.

JB Hi-Fi Australia has seen sales drop 7.8 per cent during the fourth quarter so far, while The Good Guys’ sales fell only 1.5 per cent.

JB Hi-Fi New Zealand, however, saw sales grow 46.9 per cent for the same period, cycling out the impact of last year’s Covid-19 lockdown in the country.

All three segments saw growth on a two-year timescale.

23 Jul, 2021
Nick Scali confirms it’s looking to buy Plush Sofas
Inside Retail

Following a successful first half, furniture business Nick Scali has offered Greenlit Brands an undisclosed sum to buy up its Plush Sofas business.

The two businesses are in non-exclusive discussions, and should any transaction take place, Nick Scali said it will likely be able to fund it with cash on hand and debt.

“As previously communicated to the market, the Company actively considers acquisitive growth opportunities from time-to-time having regard to the strategic rationale, available synergies, financial impact and the long-term value created for Nick Scali shareholders,” Nick Scali said in a letter to shareholders.

According to a report in The Australian, the buy-up could be part of a larger divestment by Greenlit which is reportedly also looking to sell off Freedom Furniture, Snooze and Original Mattress Factory.

A Greenlit Brands spokesperson told Inside Retail the group is considering a range of strategic options across its portfolio – including the sale of Plush.

“Greenlit Brands is carefully and methodically analysing all the options and is doing so from a position of strength, as demonstrated by the solid performance across its retail brands in FY20 and continuing through FY21,” the spokesperson said.

“Greenlit Brands will only consider strategic options that would crystallise an opportunity for its brands to grow to the next stage of their development.

23 Jul, 2021
David Jones and Country Road Group sales boosted by closed borders
SOURCE:
Ragtrader
Ragtrader

Woolworths (South Africa) has revealed that Australia's closed international borders have driven "inward-focused consumption," boosting retail spend in its brands David Jones and Country Road Group. 

In a trading update for the 52 weeks ended 27 June 2021, Woolworths revealed that both brands experienced an increase in sales during the period, despite extended lockdowns and subdued footfall in CBD and airport locations. 

David Jones sales over the 52-week period increased by 2.3% and by 0.9% in comparable stores, with second half sales up by 17.1%. 

DJs' online sales increased by 24.4% and contributed 17.3% to total sales for the current year.

"In line with our stated intention of exiting unproductive space, trading space was further reduced by 6.3%," Woolworths said in a statement. 

"Sales in our Elizabeth Street flagship store grew by 16.6% during the current year," the business said. 

Meanwhile, Country Road Group also saw a strong lift in sales during the period, seeing sales growth of 13.4% over the current year and by 15.3% in comparable stores, with second half sales up by 39.5%. 

Online sales increased by 30.7% and contributed 29.7% to total sales, while trading space was reduced by 2.8% for the current year.

"This result was underpinned by the robust performance of the Country Road brand and through refreshed product offerings across all brands," Woolworths commented on the CRG results. 

Currently, Woolworths South Africa is facing the impact of civil unrest in the country. 

"WHL echoes the sadness and deep concern expressed by many over the civil unrest in the province of KwaZulu Natal (KZN) and parts of Gauteng, which escalated into widespread looting and destruction of property in the affected areas," the business commented. 

"This has had a significant impact on our operations in these areas, particularly in KZN, as well as on our employees, customers and the broader community. 

"We are grateful that none of our employees in these affected areas suffered any injury.

"All of our stores in KZN as well as a number of stores in Gauteng last week had to temporarily close, prioritising the safety of our employees and our customers. 

"Our online delivery services and certain suppliers in those areas are also significantly affected given significant damage to their assets. 

"Eleven Woolworths stores have been looted and severely damaged with nine of the eleven stores in KZN and two in Gauteng. 

"Although looters gained entry to the Woolworths Maxmead Distribution Centre (DC) in KZN the infrastructure was not severely damaged and has been secured, together with our other DCs. 

"Operations have resumed and we have prioritised the provision of food into KZN," Woolworths said in a statement. 

23 Jul, 2021
Oroton appoints Jenny Child to top job
SOURCE:
Ragtrader
Ragtrader

Oroton has revealed that it has appointed Jenny Child as its incoming CEO.

Child will replace outgoing CEO David Kesby in October. 

Child joins the brand after it has experienced significant growth under Kesby's leadership, which includes 20% like-for-like growth over FY21 and the growth of the online channel which now represents over 25% of total revenue.

With Kesby at the helm, Oroton also diversified its accessories business with the successful introduction of a luxury apparel range, which was celebrated at Australian Fashion Week in June.

Joining the brand at such a pivotal time, Child will bring her extensive global experience in retail transformations, following 14 years at McKinsey & Co. 

During her time at the firm, Child worked with retailers to put consumer-centric strategies into action, navigate disruption and use data and technology to accelerate growth. 

Speaking on her appointment, Child said she was excited to join the company and drive the next stage of growth. 

"I’m thrilled to be joining Oroton. 

"What David, Sophie and the team have done in the last few years to refresh the relationship with consumers and plant new seeds in the business is truly impressive. 

"The momentum in the business plus today’s digital tailwinds mean that we have a fantastic opportunity ahead of us, and I’m excited to be part of shaping Oroton’s next era of growth," she said. 

Kesby will depart the business as a friend of the brand and leadership team. 

"I was pleased to join Oroton under the ownership of Will Vicars in 2018 with a directive to rebuild the team, modernise technology and infrastructure and shift this iconic brand to an agile business with an innovative culture and a focus on the customer," Kesby commented. 

"I am proud of the critical foundation work we have achieved and am leaving the business with a positive legacy and elevated trajectory.

"With a progressive digital growth strategy in place, I knew it was the right time for me to suggest a baton change.

"I look forward to the continued success of Oroton under Jenny’s stewardship," he said. 

Oroton owner Will Vicars thanked Kesby for his work and welcomed Child to the role. 

"Oroton is at a pivotal moment in its future, and to David’s credit, the business is well prepared to step into a new era. 

"David reengineered Oroton from a difficult place to what it is now; a well-oiled and rebuilt team. 

"He did this faster than we had expected and the company now looks forward to aggressively accelerating its online and international presence.

"With the appointment of Jenny Child into the CEO role, I am confident she will drive results to project the brand forward in today’s disruptive and fast-changing consumer environment. 

"During this period of accelerating Oroton’s transformation, the Board and I believe Jenny is the ideal incoming CEO to lead Oroton’s next chapter of growth and success," he said. 

Child will step into the role in October. 

23 Jul, 2021
Locked-down retailers call for landlords to share the pain
Financial Review

Retailers are calling for mandated rent relief from landlords as lockdowns in three states threaten to stretch on for weeks, decimating sales at bricks and mortar stores.

While the federal and state governments have offered support packages for stood-down workers and grants for small businesses, retailers say there has been no suggestion that landlords should be forced to share the pain by providing rent relief.

“In 2020 we had the mandated Leasing Code of Conduct and acknowledgment that there should be a sharing of the financial pain of lockdown between tenants and landlords,” said Melbourne retailer Kelley Langeliers.

“This time round? Nothing. And no one is speaking about this surefire business killer,” said Ms Langeliers, who owns a lifestyle and homewares store in Melbourne’s Mornington.

“We are being handed grants by the government, only to hand those grants and whatever cash is left in our businesses to pay full rent to landlords who have no imperative to participate in ‘sharing the pain’ this time,” she said.

15 Jul, 2021
Winning Group launches into New Zealand
Inside Retail

Appliances business Winning Group has opened its first distribution centre in New Zealand, signaling the business’ first international expansion.

Plus, the business opened its largest Australian distribution centre in Altona North in Melbourne: a 45,000sqm site boasting 55 loading docks.

Located in Waitemata Port in Auckland, the 6000sqm distribution centre will allow the business to cut middle mile logistics costs and serve the Auckland area much faster.

Winning Group owns and operates the Winning Appliances, Appliances Online, Rogerseller and Home Clearance businesses, and specialises in moving bulky goods.

“Our Auckland DC is ideally located within the Port, allowing us to destuff stock, including MPI clearance, coming into the Ports of Auckland, store, dispatch and deliver stock straight to Auckland-based customers,” said Winning Group’s general manager of operations Mick Bunt.

“We are also servicing delivery outside greater Auckland by facilitating the dispatch of goods ready for line haul.”

Bunt said the business is already providing third-party logistics services for a ‘leading furniture retailer’ in New Zealand, and will aim to build that network out moving forward.

The site in Melbourne, however, was purpose-built over the last year to deliver the best possible shopping experience to its key customers in Melbourne and Victoria at large.

“Both DCs will help to continue the Group’s solid double digit growth and provide our customers and 3PL partners in Australia and New Zealand, with our legendary care and exceptional service,” said Winning Group’s chief operations officer Ryan Fritsch.

15 Jul, 2021
Seafolly furthers sustainability mission with new collection
SOURCE:
Ragtrader
Ragtrader

 

Seafolly has released its second campaign with its new global ambassador Lara Worthington.

The 'Live The Beach' campaign celebrates the beach lifestyle and also helps to further Seafolly's sustainability mission. 

The collection is designed in Sydney and features innovative fabrics from Europe, textiles made from recycled fibres and quick dry cups for comfortability. 

Speaking on key styles in the new range, Seafolly said that it has used a range of techniques to develop the new collections in an eco-conscious way.  

"Seafolly’s sustainable approach starts with innovation.

"This season more so than ever, we have invested in new innovative fabrics and processes to further our journey to sustainability.

"The Twilight collection's swim styles have been crafted from a lurex fabrication, developed with a recycled Nylon base are perfect for long summer days in the sun and romantic starlight rendezvous. 

"Meanwhile, Laguna's bold floral print has been digitally printed on a recycled rope style texture base, this collection is tactile, connecting you to nature through style and fabrication," the brand said in a statement. 

The collection is inspired by retro prints, flora and fauna and sporty minimalism. 

Live The Beach launched today and is available now on the Seafolly website, Seafolly Concept stores and selected wholesale partners. 

15 Jul, 2021
Bras N Things reveals new charity partnership
SOURCE:
Ragtrader
Ragtrader

 

Bras N Things has partnered with the Women and Girls Emergency Centre (WAGEC), marketing manager Natalie Chalmers told Ragtrader

The partnership will see Bras N Things donate profits from the sales of select PJ sets and a dedicated tote bag to WAGEC, helping to further the organisation's work in providing support for women and families in crisis. 

"We're looking to empower women and children to build safe futures, end gender based violence and create a community where women and children are safe to confidently be themselves," Chalmers told Ragtrader. 

"So this is an incredible partnership for us, the women that work at WAGEC are just exceptional with the work they're doing. 

"We saw a lot of those stats that were coming out of last year throughout COVID and lockdown, and it's a space that we can genuinely partner with this charity and really drive change," Chalmers said. 

Alongside the financial donations, Bras N Things will create a 'comfort pack' for women and families accessing WAGEC's services. 

"So there'll be PJs, a little crop, some knickers and socks and they'll be in a tote bag for them," Chalmers added.

"So anytime a customer purchases one of these PJ sets, a percentage of those profits go into creating those comfort packs and all of the rest of the profits go direct to WAGEC and all of the work that they're doing," she said. 

The WAGEC Bras N Things products are available now, with the tote retailing for $7.99 and the PJ set retailing for $64.99. 

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