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Over more than a century, three generations of Bucherers built one of the most exclusive watch and jewellery retailers in the world, selling expensive time pieces and glittering gems to the global rich and famous.

Now, the secretive 87-year-old Swiss billionaire behind the eponymous luxury boutiques — Chairman Jöerg G. Bucherer — has agreed to sell Bucherer to Rolex in a move that has stunned the world of high-end watch retailing.

The companies didn’t disclose the terms of their deal and arriving at an estimate isn’t easy since neither Switzerland-based firm publishes financial results.

Jean-Philippe Bertschy, an analyst with Vontobel Holding AG, put annual sales at Bucherer’s more than 100 stores at about 2 billion Swiss francs ($4.1 billion), giving the firm an enterprise value of as much as 4 billion Swiss francs. He estimated Bucherer accounts for about 5 per cent of Rolex’s sales.

The octogenarian Bucherer’s decision to dispose of the closely held family business took the industry by surprise partly because of the intense secrecy surrounding himself and the two watchmakers, whose histories have been closely entwined for decades. In a statement about the agreement, Rolex said his choice was made “in the absence of direct descendants.”

By buying Bucherer, Rolex is giving itself a major presence in consumer sales for the first time, a strategic shift from reliance on external distributors. The only store in the world currently owned and operated by Rolex is in its home city of Geneva.

The deal, which still requires approval from authorities, comes amid what UBS has dubbed the greatest transfer of wealth in history over the next two decades as business founders and investors grow older. Yet it’s unclear where Bucherer plans to direct the proceeds from the sale. A spokesperson for the firm declined to provide any details beyond the Rolex statement, adding that Bucherer “has always been a very discreet company.”

What’s clear is that the move will put an end to dynastic control over the purveyor of pricey jewellery and watch brands including Rolex, its own Carl F. Bucherer, Chopard and Blancpain. The business traces its roots to 1888 when entrepreneur Carl-Friedrich Bucherer and his wife Luise opened a shop in Lucerne, according to the company’s website.

Their sons Ernst and Carl Eduard joined the business in the early 1920s, with Ernst reaching an agreement with Rolex founder Hans Wilsdorf in 1924 to add the brand to its product line. Third-generation Jöerg took over management in 1977, expanding into Austria in the 1980s and then Germany a decade later. Bucherer opened a flagship store in Paris in 2013 and has also moved into London, Copenhagen and the US.

Jöerg Bucherer has never been known to give a media interview and is mentioned only briefly on the company’s website. A French corporate filing lists him as a Swiss national.

German-born Rolex founder Wilsdorf created a Geneva-based foundation in his name in 1945 that took over the firm’s ownership, according to the company’s website. He died in 1960 and also didn’t have any direct descendants.

“Jöerg Bucherer is the last person still in activity to have known and worked with Hans Wilsdorf,” Rolex said in its statement announcing the deal, adding that Bucherer will remain the retailer’s honorary president.

Online furniture retailer Temple & Webster is the latest brand to bear the brunt of slowing spending, posting a 30 per cent drop in full-year net profit.

However, company CEO Mark Coulter said on Tuesday sales had started to pick up in the new financial year as consumers switch to more affordable home goods.

Temple & Webster shares fell almost 13 per cent after it revealed its FY23 net profit after tax had declined by 30.6 per cent to $8.3 million, while revenues slipped 7.2 per cent to $395.5 million. They closed the session at $6.57 and are still ahead by more than 40 per cent year-to-date after a strong run-up since February.

Coulter said while consumers were under pressure, the retailer’s Millennial-focused customer base was trading down on purchases, seeking out furniture staples like budget-friendly couches.

“That’s our sense – and you can see it in our [demand for our] sofas, for example,” he said.

“Furniture and homewares is less discretionary than people think – there is always going to be a need for it. And we are seeing that customers and looking for more value.”

Temple & Webster’s trading update for the start of the 2024 financial year showed stronger momentum, with the company’s revenues up by 16 per cent compared with the same time last year.

Coulter said while trading conditions were tough, the business was sticking with its long-term value proposition and targeting $1 billion in annual sales in the next three to five years.

“I think it is tough out there – people are feeling the pinch, but they’ll still need items for the home, and they just look for more value options,” he said.

Global jewellery brand Pandora has continued its global rollout of lab-grown diamonds into the Australian market.

Australia will join Mexico and Brazil in the new initiative, with lab-grown diamonds already available in Pandora’s UK, US and Canadian markets, with a further rollout into all stores in North America.

The full rollout is expected to be completed in the first quarter of 2024, and will be available in 700 stores globally, including Australia, by August 31.

Pandora has been crafting lab-grown diamonds since August 2022.

“Consumers in North America and the UK have welcomed our lab-grown diamonds and we will continue to make them accessible to more people around the world by expanding our collections and distribution,” Pandora CEO Alexander Lacik said.

“We have big ambitions for this category, aligned to our mission of providing high-quality, affordable jewellery at a very high level of craftmanship.”

The move comes as Pandora expands its lab-grown diamonds assortment with three new collections, including original designs and the brand’s take on classic jewellery styles.

The new collections include Pandora Nova - which features various cut stones and will introduce a proprietary four-prong setting that reveals more of the diamond, alongside Pandora Era and Pandora Talisman.

All collections feature near colourless, VS+ clarity lab-grown diamonds available in 0.15 to 1-carat weights and set in 14k white gold, 14k yellow gold, or sterling silver.

The three new collections will be unveiled to consumers via a campaign revealed on August 29.

“The new collections and accompanying campaign bring our unique point-of-view on diamonds to life,” Pandora CMO Mary Carmen Gasco-Buisson said. “Our diamond jewellery is not only for special occasions, but something you can wear to add joyful sparkle every day and everywhere.

“This commitment to democratizing diamonds and the wonderful meaning they carry make lab-grown diamonds a perfect fit for Pandora.”

Meanwhile, Pandora's Australian market recorded a negative 5% like-for-like sales in the second quarter of 2023 compared to Q2 2022. Pandora noted this was driven by a continued weak consumer sentiment in the country.

Pandora noted its owned and operated concept stores in Australia are outperforming the wholesale channel, at 0% and negative 10% LFL respectively in Q2 2023, partly driven by tourism as well as high conversion rates in Pandora-owned and operated stores.

Bedding and homewares retailer Adairs has reported a 10 per cent lift in group sales in FY23 with the Focus on Furniture brand performing well.

For the year to June 25, group sales achieved $621.3 million, up 10.1 per cent while tax-paid profit reached $37.8 million and underlying EBIT fell 16.4 per cent to $63.9 million.

Adairs’ sales were up 2.9 per cent to $430.8 million driven by a 7 per cent increase in-store sales while online sales fell 6 per cent however accounted for 27.1 per cent of total sales.

A new Adairs brand website was launched in November last year and two stores were opened, four stores were upsized, two refurbished and three closed.

Focus on Furniture sales grew 5.3 per cent to $141.9 million despite industry-wide supply chain headwinds which prevailed for much of the year.

Mocka sales fell 24.1 per cent to $48.6 million as customers returned to in-store shopping and the brand moved on from FY22 operational issues and improved customer confidence by enhancing product design and quality.

Mark Ronan, MD and CEO of Adairs Limited, said this year’s sales performance “reflected” a strong product offering across all three brands.

“In a trend seen by virtually all retailers, sales slowed towards the end of the year as rising interest rates and broad cost of living pressures saw households tighten their budgets.

“In a tougher trading environment, the combination of exclusive products, engaged customers, attractive price points and strong service culture sees us well placed to maximise sales in the coming year.”

For the first seven weeks of FY24, group sales fell 8.9 per cent while the company has continued to implement material cost reduction initiatives that seek to manage the business amidst the anticipated trading environment.

Strand’s new luggage label Nere is set to open its first Australian bricks-and-mortar store at Melbourne Central. 

Nere first launched in Strand stores across Australia and New Zealand in July 2022. The brand is now expanding across multiple markets as a stand-alone venture, including the United Kingdom and United States. 

Nere will join eight fashion brands opening stores at Melbourne Central in the lead up to Christmas. 

Superdry, Stylerunner, Nude Lucy, Supre, LSKD, And Now This and Paper Kites will also open locations at the CBD shopping destination. 

Melbourne Central centre manager Denis Ryan said the openings come as the centre records its busiest month of foot traffic since the pandemic. 

“We’re very excited to be able to offer our customers Australian retail firsts like Jamba, Nere and Monopoly,” Ryan said. “Our diverse range of retail, dining, and entertainment offerings sets us apart from other CBD retail precincts, and we will continue to seek new and exciting retail opportunities to provide an unmatched experience for our customers.”

Melbourne Central attracts around 56 million visitors every year and over 300 stores.

Australian retailer Big W has recorded an 8% lift in sales in FY23 on FY22, but a 0.3% slip in the second half compared to the prior corresponding period.

Total sales for the low-price department store hit $4.78 billion in FY23 and $2.07 billion in just the second half. While earnings before interest and tax (EBIT) was up 165.3% for the year to $145 million, it slumped by 63.7% to $11 million in H2 FY23.

Parent company Woolworths Group noted sales were down 5.7% in the fourth quarter due to a notable softening in discretionary spending and, to a lesser extent, the timing of Easter.

Everyday essentials such as health, baby and pet care categories, and leisure products continued to see item growth but Woolworths noted discretionary areas including clothing and home were impacted by the rising cost of living on households.

eCommerce sales decreased 22.2% in FY23 to $482 million, with Woolworths citing a 31.4% decline in H1 as customers returned to shopping in-store for the decline and cycling of COVID-driven online purchasing behaviour.

eCommerce sales declined 3.3% in H2 with penetration of 10.1%.

Woolworths Group CEO Brad Banducci said the trading environment for Big W changed dramatically between the first half and the second half of FY23.

“After delivering a strong H1 result, we indicated in February that the H2 EBIT contribution would likely revert to more typical seasonal patterns,” Banducci said. “H2 ended up below our initial expectations as customers cut back on discretionary items, particularly in Q4, and the sector became extremely competitive with higher levels of promotions and discounts.

“While F23 EBIT of $145 million more than doubled on the prior year, H2 EBIT of $11 million was below H2 F22 due to flat sales, higher promotional activity across the market and rising unit costs driven by team wage investments.

“Pleasingly, our customer scores remained strong, including value for money metrics, and digital interactions continue to grow. We also launched Cartology in Big W during the year with 175 screens in-store by year end.”

Cartology is Big W’s exclusive retail media partner launched in June 2022, covering in-store and digital.

Woolworths also launched a select Big W range on MyDeal in August 2022, which it claimed has seen consistent sales growth on the platform since implementation

On current trading and outlook, Banducci said sales in the first eight weeks of FY24 have shown a similar trend to Q4 with growth in its food business but declines in Big W sales on the prior year.

“Big W sales momentum continues to be challenged with sales down approximately 6% in F24 to date,” Banducci said. “While Big W is being impacted by the broader discretionary spending slowdown in Australia, some categories like everyday essentials are performing strongly.

“Loyal customers are continuing to shop with Big W, and we are seeing some trading-in but customers are cautious, putting fewer items in their baskets.

“The outlook for the remainder of the year is uncertain and as always, trading in Q2 will be key to the full-year results.”

The Big W store network grew by one store during the year to 177 stores following the opening of a new space in Q1. Sales per square metre increased by 7.9% due to the strong sales growth in H1.

Pureplay online retailer Adore Beauty’s sales declined for the full year and the business says value remains a “key driver” for customers.

In its results for the year to June 30, revenue fell 9.6 per cent to $180.6 million with EBITDA of $600,000 reflecting lower operating leverage, cost inflation and reinvestment in key initiatives.

Active customers fell 8 per cent to 801,000 while returning customers increased by 4 per cent to 490,000 and contributed to 76 per cent of all revenue. The company also tripled its private label SKUs to 38 and plans to expand further.

Adore Beauty CEO, Tamalin Morton, said the business “returned to growth” in the second half despite challenging trading conditions.

“We have maintained sales momentum into FY24, up 5.9 per cent on the same period last year, and our proposition continues to resonate with customers.

“We enter the new financial year with a refined strategy, focus on customer centricity, increased brand awareness, and operational optimisation,” she said.

“New strategic initiatives already underway provide short and long-term growth levers, and include leveraging new data insights to enhance our product offering and loyalty program, real-life activations and audience expansion initiatives.”

Australian low-price accessories brand Lovisa has recorded a revenue lift of 33.1% in FY23 to $596.5 million.

Lovisa cited the implementation of price increases during the third quarter of FY22, which grew sales through the fourth quarter and continued through the first three quarters of FY23, with a reported minimal impact in sales volumes.

As the company cycled these price increases in the second half of FY23, it recorded a softening in comparable company analysis - a valuation that looks at ratios of similar public companies and uses them to derive the value of another business.

Lovisa recorded a gross margin of 80%, with a gross profit up 34.8% to $476.7 million. Net profit after tax was up 20.1% to $68.2 million, and its operating cash flow was at $188 million, up 24.8%.

Meanwhile, Lovisa expanded into 12 new markets during the financial year, opening 210 new stores totalling 801 altogether, with the accessories brand noting this as a major driver for total sales growth.

New markets include Hong Kong, Taiwan, Namibia, Botswana, Mexico, Italy, Romania, Hungary, and Spain and new franchise markets in Columbia, Peru and Morocco, following the opening of Poland and Canada at the end of FY22.

The USA market has overtaken Lovisa's Australian market as the largest store network, with 78 new stores opened in the US. The market now operates 190 stores at financial year end, above Australia's 168. Lovisa opened 17 in Australia in FY23. 

Despite this ongoing investment, the cost of doing business (CODB) was controlled according to Lovisa, helping mitigate inflationary pressures on labour and other costs. Lovisa noted it saw increased pressure on CODB as a percentage of sales as sales growth slowed in the second half.

For the first seven weeks of FY24, comparable store sales were down 5.8% on the same period in FY23.

Total sales for the same period are up 13.1%, with 21 new stores opened and eight closed.

Lovisa CEO Victor Herrero said the momentum in its global store rollout has delivered strong top-line sales growth.

“The company has been able to continue to deliver strong profit growth while investing in the structures to support our global expansion in the face of more difficult trading conditions in the second half, which leaves us well placed as we move forward with store rollout in both existing and new markets,” Herrero said.

“I want to again thank the entire global Lovisa team for their exceptional work to deliver these results.”

Australian fashion group Universal Store has recorded a 26.5% lift in total sales in FY23 compared to FY22 to $263.1 million, driven by growth across its three key brands - Thrills, Perfect Stranger and its eponymous label Universal.

Thrills recorded a revenue lift of 20.1% in FY23 to $41.8 million. Meanwhile, Perfect Stranger recorded a total sales increase of 187% to $8.9 million compared to FY22.

The company’s gross profit hit $155.3 million in FY23, up 28% on FY22. It also recorded a 23.8% lift in earnings before interest and tax to $40.4 million, and a net profit of $23.6 million, up 14.6% on the prior year.

First-half sales were up 34.5% - or 28.6% when excluding Thrills which was acquired by Universal on October 31, 2022.

However, trading in the second half of the year softened, with revenue growth of 17.8% - or 4.7% excluding Thrills.

Universal claimed this was influenced by consumer responses to the macro environment and the impact of rising living costs, exacerbated by interest rate increases. As a result, store traffic slowed but remained positive compared to the prior year.

Despite the challenges, the group achieved growth of 1.2% in like‑for‑like (LFL) sales compared to FY22, with store sales up 23.9% in FY23. Group online revenue grew 3.7% in FY23 and contributed 14.1% of total revenue.

Universal Store group CEO Alice Barbery said FY23 brought unique challenges and opportunities, transitioning from pandemic impacts to a now-dynamic and volatile consumer environment.

“During the year, we grew our store network, completed a strategically significant acquisition, moved to our new DC and Support office, and materially advanced the Perfect Stranger retail trial,” Barbery said.

“We now have three great retail brands that are well positioned for growth and a team that is excited to pursue these opportunities.”

Looking ahead, Universal will refine and expand Thrills’ direct-to-consumer (DTC) operations. The fashion label’s wholesale and DTC channels are reportedly performing well with wholesale order book indicating double-digit growth of the wholesale channel in the first half of FY24.

Despite the profit lifts overall, Universal Store’s cost of doing business (CODB) rose by 260 basis points to 33.5% of sales. The company cited an increase in employee costs, occupancy costs, and $8.6 million in expenses related to the Thrills acquisition.

The rise in employee costs was mostly driven by the Thrills acquisition, Universal noted, and having all stores trading during the period in contrast to the prior comparative period which saw lower spending due to mandated store closures.

Universal’s overall inventory increased by $6.3 million. The company cited strong demand, more appropriate stock levels held post-COVID, a larger distribution centre, new store openings and the integration of the Thrills business ($4.0 million).

Capex was at $10.2 million.

“Continuing to introduce fresh new products and brands that excite and meet our customers' ever-changing needs will be key to navigating successfully through the uncertain market conditions,” Barbery said.

“I am most pleased about the outstanding work my team is doing in refining our retail concepts, delighting our customers, approaching each challenge with a positive mindset, and readying our business for long-term growth.”

During FY23, Universal opened eight new stores, consisting of three Universal Store and five Perfect Stranger stores. When combined with the ten acquired Thrills stores, this totals 95 as of June 30, 2023.

Universal plans to open one or two new Thrills stores in FY24, four to six for Universal Store, and between five and eight new Perfect Stranger stores.

The administrators of interior and homewares business Fenton & Fenton are looking to find a buyer for the popular brand, which has axed nearly 60 workers and left some customers hundreds of dollars out of pocket.

The Melbourne-based business, founded by Lucy Fenton in 2008, sold eclectic furniture, homewares and art. It had showrooms in Prahran and Collingwood in Melbourne, as well as an online store, which has been replaced with a notice announcing it has appointed Ernst & Young (EY) as liquidators.

EY turnaround and restructuring leader Adam Nikitins said he and fellow administrator Stewart McCallum were still assessing the business but noted it had a loyal online customer base. Fenton & Fenton has a combined 428,000 followers on Facebook and Instagram.

Nikitins said he and McCallum were reaching out to impacted customers but confirmed some who made orders may not receive a refund unless they are a creditor.

“Customers will not be able to recover payments for unfulfilled orders other than through participating in any dividend in the winding up,” he told this masthead.

“There may be limited circumstances in which customer orders will be fulfilled where title to stock has already passed to a customer. The law in this area is complex and requires a specific fact pattern to be in place in order for orders to be completed. The liquidators have established a call centre to reach out to potentially impacted customers in order to accelerate the understanding and resolution of these matters.”

Customers who have outstanding credit or gift cards will not be remunerated.

“Regrettably, gift card customers will not be in a position to redeem their gift cards. Gift cardholders should make a claim as unsecured creditors in the Fenton & Fenton liquidation.”A number of customers took to Fenton & Fenton’s most recent Facebook post to query whether they would be refunded for their orders or outstanding credit. Fenton & Fenton was posting on social media as recently as Monday. It appears comments have been disabled on its Instagram account.

Nikitins said the business, which he described as “in a state of stasis”, ceased trading and terminated 58 employees on Wednesday afternoon. He said a number of interested parties had already reached out about buying the business.

“There’s been strong interest in the brand, intellectual property, the trademark and the database, so we’re pulling together necessary information to respond to those parties who have expressed interest in purchasing that,” he said.

The administrators will also assess Fenton & Fenton’s inventory and the “most appropriate form” to realise its value “for the benefit of creditors”. “We’re exploring all avenues and options available for us,” they said.

Depending on the interest, the business may be sold in its entirety, which would save the jobs of 58 employees, or in a piecemeal manner.

“There is a connection with the brand that could be enlivened if all parties were willing and able,” Nikitins said.

Lucy Fenton is the sole director of the business and has been contacted for comment.

Rising interest rates and operating costs including fuel, rent, and utility bills have put households and businesses under pressure, pushing up the number of expected insolvencies.

Entrepreneur Irene Falcone recently appointed administrators for her non-alcoholic drinks business, while chocolate maker Ernest Hillier collapsed for a second time in late June.

The shock collapse of popular wedding dress boutique The Bridal Atelier left brides-to-be across Australia stranded without their dresses, while weight loss company Jenny Craig folded in May.

Fashion has never been known for its strong links to reality, but a new trend is emerging where brands are creating digital imagery instead of real photographs to sell clothing.

Australian fashion business Jag, which is owned by APG & Co (stablemates include Sportscraft and Saba), is using enhanced digital software to create its campaign images in what it believes is a local first.

Paying models for a usage fee, the company will “sew” garments on to avatars to be used repeatedly. CEO Elisha Hopkinson calls it a “new frontier” for the company and says that “AI will play a vital role in how we work going forward”.

The brand’s latest campaign was shot using real models who were photographed in a variety of poses. Jag’s digital art team then superimposed clothing on them, cutting down the time, resources and funding required for full-scale fashion shoots, which often run to hundreds of thousands of dollars.

“This is a best-of-both-worlds scenario,” said Ms Hopkinson. “Models are paid for their likeness, and we can save time and money by using their images in different ways.”

To enhance the realism of the images, fabric is scanned to articulate the way it would flow and drape on a real person.

Ms Hopkinson dismissed the idea that using digital imagery was less impactful than shooting real images.

“If I was to show you two images – one that is rendered by 3D software and one that is shot by us, I doubt you’d be able to tell the difference,” she said. “There is absolutely the playfulness we want in the campaigns. But sometimes people just want pictures of a piece of clothing on a model, not necessarily a story.”

It’s a claim Kathy Ward, marketing director at Chic Model Management, rejects, saying that “authenticity is so important”.

“We believe consumers still want a real image,” she said. “This is how you build brand confidence. Seeing the way clothes actually look on models is not just important, it is necessary.”

Like many other industries, fashion is embracing AI. Wrapd, the discount sales platform founded by former Young Rich Lister Julie Stevanja and her sister, Sali Sasi, recently released an entire campaign created purely from AI. It cost just $60, compared with the $30,000 the founders spent on the first campaign they produced for Wrapd (then known as Her Black Book).

“As a start-up, we don’t have the luxury of ongoing shoot budgets,” said Ms Stevanja. Time is a factor, too.

“Creating AI campaigns was radically faster and cheaper than a real shoot,” Ms Stevanja said. “It would have taken a team months of researching, planning, casting, shooting, and retouching, not to mention the logistical wrangling. We were able to achieve shoots in locations all around the world in a single evening, something that would be physically and financially impossible in the real world.”

Ms Stevanja said she spent about 40 hours creating around 1000 separate images using AI prompts, but settled on just 30 for the final edit.

“It’s a totally different approach to a photo shoot,” she said. “You have less direct control of the outcome – for example, sometimes AI completely ignores a prompt, or does the opposite of what you ask, not to mention the absurdities you have to scrap altogether, like when the talent suddenly sprouts three legs or is sitting awkwardly on an invisible chair.”

Still, she adds, “absolutely anyone can learn the skill, because the trial and error stage is essentially free”.

Bunnings will cut 100 jobs from its New Zealand head office in a bid to become more efficient at a time when consumers are slowing their spending and seeking lower prices.

The retailer plans to cut about 30 per cent of 340 staff in areas including finance, human resources, merchandise, marketing and retail operations.

Bunnings managing director Mike Schneider said the restructure would not impact more than 5000 employees at the company’s 50 stores, trade centres and distribution centres in New Zealand.

“We continue to be absolutely committed to the New Zealand business and its growth and success,” he told The Australian Financial Review.

“We have really thought about this, and it’s about improving the operating model and about leveraging scale and cost. We see this very much as helping drive more simplicity and more group alignment.”

The New Zealand business will still have localised buying and marketing.

Mr Schneider said the job cuts were considered to help drive greater alignment between the Australian and New Zealand business. Any cost savings are not material to the wider group, which will report its full-year financial results in a few weeks.

“The outcome of that is more investment into our store network, more investment into our frontline team and more investment in value for our customers as well,” he added.

Wesfarmers-owned Bunnings also recently restructured its middle management store ranks in Australia, moving from eight regional managers to four general managers. Bunnings posted $17.7 billion in sales and $2.2 billion in earnings before tax for the 12 months to the end of June 2022. The retailer remains the key contributor to Wesfarmers’ profits and cash flow.

Wesfarmers chief executive Rob Scott warned in May that consumers were finding it much tougher, and he was bracing for an even more difficult second half with rising costs continuing to pressure both consumers and businesses. Since then, interest rates have moved even higher.

Australia’s biggest department store Myer revealed its sales growth has almost ground to a halt over the past six months as trading conditions deteriorated after the RBA’s barrage of interest rate rises, sending its shares tumbling.

In one of the first trading updates by a major retailer this earnings season, Myer on Tuesday said sales edged up just 0.4 per cent in the six months to the end of July after double-digit growth in the preceding half, limiting its total sales growth for its financial year to 12.5 per cent.

While net profit for the year will come in at $69 million to $73 million, up as much as 21 per cent, only $4 million to $8 million was generated in the second half, it said in a statement to the ASX.

Myer’s stock plunged 14.1 per cent to 61 cents in mid-morning trade.

The company will release its audited financial results in September.

Chief executive John King said Myer had been able to secure solid sales and profit growth despite the macroeconomic headwinds that hit the retail sector in the June half.

“We continue to tightly manage costs, inventory and cash to ensure we have a strong balance sheet as we begin [the new financial year], where we expect the ongoing uncertainty around the macroeconomic environment to persist,” he said.

Retail analysts are expecting further signs of a spending slowdown during company earnings season this month, as national spending data reveals that households are continuing to reduce their expenditure to balance rising mortgage, energy and grocery costs.

There was further evidence on Tuesday that rising household expenses are having an impact on the outlook, with the Westpac-Melbourne consumer sentiment index showing confidence fell further into “deeply pessimistic” territory in August.

The index slipped 0.4 per cent for the month. Westpac senior economist Matthew Hassan said pressure on family finances continued to weigh on the outlook.

The department store sector appears particularly vulnerable to a spending slowdown; turnover at the nation’s department stores fell by 5 per cent in June, according to Australian Bureau of Statistics figures.

Retail analysts are continuing to prefer the supermarkets and discount department stores like Kmart over fashion retailers and businesses focused on “big ticket” purchases in the current trading environment.

“The consumer is reducing spending in aggregate and when they do spend they are trading down by price point in apparel and general merchandise,” UBS analysts said in a recent note to clients.

Myer competitor David Jones has recently conducted an efficiency review of its store operations, which will result in up to 100 redundancies as the business looks to streamline its operations under new owner Anchorage Capital.

But David Jones chief executive Scott Fyfe told this masthead last week that he expects the consumer outlook to improve in the lead-up to Christmas.

Myer has emerged from the pandemic with strong trading growth over the past two years, and the company reported its best profit result in close to ten years in 2022. Its shares are still ahead by more than 20 per cent over the past 12 months, despite plunging on Tuesday.

King, who has led the turnaround of the business, has confirmed he intends to resign from his role in 2024 and a global search is being conducted for his replacement.

Department store Myer says sales and profit are continuing to grow despite the challenging economic environment, with its online business continuing to strengthen.

In a trading update issued today based on unaudited accounts, the company said it expects to report a 12.5 per cent increase in sales to $3.4 billion for FY23 and a full-year tax-paid profit somewhere between $69 million and $73 million. While that projection marks an increase of up to 21 per cent year on year, it is less than a Refinitiv forecast of $88.5 million, leading to a decline in its share price in Tuesday trading.

Online sales accounted for 20.5 per cent of the company’s turnover. A 4.5 per cent fall in FY23 reflected increased online shopping when physical stores were closed due to Covid-related restrictions during the previous comparable period. Online sales in FY23 are up 163.2 per cent on FY19, the last full trading year prior to the advent of the pandemic.

Myer said overall second-half sales extended 0.4 per cent despite a “deteriorating” trading condition while tax-paid profit for the half is expected to range between $4 million and $8 million.

CEO John King said the business continues to “tightly” manage costs, inventory and cash to ensure a strong balance sheet as it begins its new calendar year.

“Myer’s Customer First Plan has continued to deliver both positive sales growth and positive profit growth in FY23, despite the prevailing macroeconomic headwinds that have buffeted the retail sector throughout the second half.”

King will retire in the second half of FY24 and return to the US. The company has engaged search firm Egon Zehnder to recruit his replacement.

Amazon has confirmed plans to build Australia’s largest warehouse, one which will put a fleet of robots to work in the Melbourne suburb of Craigieburn.

The automated fulfilment centre, which at 209,000 square metres will be the size of 11 MCGs, will be 830 square metres larger than Amazon’s robotic fulfilment centre in Kemps Creek, Western Sydney, which was its first such Australian centre. The new site is scheduled to open in 2025.

As with the Kemps Creek site, the Craigieburn facility will have robots working alongside humans. The robots will collect stock from around the warehouse and bring it to employees so they can prepare packages for shipment.

“Instead of the associate going to the items, the items are coming to the associate. That helps speed [up] order processing time,” Amazon Australia country manager Janet Menzies said.

The investment in the robotics site is another sign that the e-commerce giant, which has poured $8.4 billion into its Australian operations since its launch here, is taking a long-term view of the local retail market.

Amazon has been upbeat about its growth opportunities in Australia, despite a deluge of data that suggests household spending is contracting in the face of surging living costs.

Analysts from investment and advisory group Jarden predicted this year that the total value of merchandise sold on Amazon in Australia would hit $5 billion in 2024.

Menzies said last month that the company has experienced a jump in subscription orders for everyday grocery items. It was also upbeat about its July Prime Day sales event.

Amazon shares are up by about 12 per cent over the past month. The stock surged after the retailer surprised the market with stronger than expected quarterly earnings. The US-based company posted sales growth of 11 per cent year on year despite a global spending slowdown.

Menzies said the investment in the new Melbourne site would be a win for the retailer’s third-party sellers, who would be able to store products there.

Amazon will recruit for new types of warehouse jobs at the Craigieburn facility, including IT and engineering roles to maintain the robots. The site will employ 2000 staff once fully operational.

Increasing investment in automated warehouses across Australia’s retail sector has driven the need for a range of new logistics jobs over the past few years.

Supermarket giant Coles is also looking for a new generation of tech-savvy warehouse workers to help staff its automated grocery facility in Queensland. 

As temperatures dropped throughout July, a slew of consumer and spending data left Australian retailers with little doubt that winter had finally come.

Data from banking giant ANZ this week suggested overall spending was down by 10.3 per cent in the first weeks of July compared with last year, while over at NAB consumer surveys showed Australian households were scrimping on meals out and little luxuries to ensure they could afford to cover their insurance policies and children’s activities.

Retail sales data released on Friday showed turnover dropped by 0.8 per cent across the country in June, with the sharp fall coming off the back of weaker than usual spending at end of financial year sales.

At the same time, brands are struggling to balance their own budgets – a survey of more than 200 local retailers by e-commerce software platform Shopify this month shows 58 per cent of businesses say they’ve had to pass on most of higher input costs to their customers.

But over on the ASX, consumer stocks managed to shrug off the gloom. The S&P/ASX200 consumer discretionary index had posted monthly gains of more than 3.5 per cent as of Friday, and consumer stocks accelerated after better-than-expected inflation data on Wednesday.

Kmart, Target and Bunnings owner Wesfarmers was ahead by close to 1 per cent for the month on Friday. Online retailer Kogan.com was up by about 30 per cent for the month, surging this week after a trading update confirmed that while overall sales were slowing, profitability was improving.

Rivers and Katies’ operator Mosaic Brands shot up by 19 per cent last Friday after revealing it would swing back to profit for 2023, as chief executive Scott Evans flagged that the retailer’s cohort of older shoppers was actually continuing to spend in the face of cost of living pressures.

“Do we think that the next six months is going to be all wonderful? No. Do we think it’s Armageddon? Not quite,” he said.

Analysts and economists have been forecasting the spending slowdown for more than a year now, with many stock watchers already baking this pessimism into their models.

And while there is no doubt that conditions are softening overall, recent spending data suggests there could be some winners despite the slowdown.

Australian consumers have increasingly been making trade-offs in their spending to make their dollars stretch further, and to be able to afford the parts of their budgets that they can’t bear to axe.

The phenomenon of “trading down”, or moving from one product to a lower-cost alternative, could open growth opportunities for a range of retailers, including discount retailers such as Aldi and Kmart.

UBS analysts said this month that Aldi was most likely to win market share in the current trading environment. The investment bank said last month that it also preferred brands that “are lower priced and able to win from a trade-down”, such as Wesfarmers’ discount department store Kmart.

“The consumer is reducing spending in aggregate and when they do spend they are: (1) trading down by price point in apparel and general merchandise,” the UBS team said.

Kogan.com founder Ruslan Kogan said this week that there were growth opportunities as consumers revisited their budgets, with the online retail platform seeing an improved performance in its phone plans business and its loyalty subscription program, Kogan First, even as overall sales slow.

“In this environment, where people are looking to save more money, that [program] has been very popular,” he said.

There’s also some evidence that older consumers are helping drive sales in areas such as fashion, even though clothing and apparel sales have weakened since the country emerged from lockdowns.

CommBank iQ cost of living data for the first months of this calendar year showed that consumers aged over 55 have increased their spending beyond inflation compared with 2022, and shoppers aged over 35 increased their clothing spending by 3.1 per cent in the first quarter of the year, as younger shoppers pulled back.

Things are also rosier at the luxury end of the retail market, where brands such as Chanel have had rapid growth as the world emerged from pandemic lockdowns.

Shares in ASX-listed designer brands platform Cettire have surged by more than 140 per cent year-to-date as the business reports that revenue momentum is growing rather than slowing.

Meanwhile, this month’s trading update from travel operator Flight Centre suggests that while households are working harder to balance budgets, discretionary dollars are still being spent when it comes to holidays.

Shares in the travel agent have advanced by more than 20 per cent this month and the business expects 2023 earnings will be better than previously forecast, coming in at between $295 million and $305 million.

Flight Centre managing director Graham “Skroo” Turner said in the trading update that the year-on-year growth in outbound travel suggested consumers are putting holidays first.

“Looking ahead, our expectations are that leisure travellers will continue to prioritise holidays
and experiences over other areas of discretionary spending,” he said.

Tapestry, the owner of brands including Coach and Kate Spade, agreed to acquire Versace and Michael Kors parent Capri Holdings in an $US8.5 billion ($13 billion) deal that shows the wave of consolidation in the luxury-goods sector is far from finished.

Tapestry and Capri separately built up their own stables of high-end brands in recent years, but they’ve been no match for the breadth and depth of European luxury houses LVMH and Kering. The continental giants own brands that touch on an array of sectors, including apparel, ready-to-wear, jewellery, watches and alcohol.

The Capri acquisition is an attempt to try to compete more effectively against luxury’s top players, particularly in handbags — strengths for both Coach and Michael Kors — and shoes. Tapestry owns the Stuart Weitzman footwear brand and Capri owns Jimmy Choo.

“By joining with Tapestry, we will have greater resources and capabilities to accelerate the expansion of our global reach,” Capri chief executive officer John Idol said in the statement.

New York-based Tapestry is paying $US57 a share in cash, according to a statement, a 65 per cent premium over Capri’s last closing price. The $US8.5 billion enterprise value includes $US1.7 billion in net debt.

Capri shares surged as much as 58 per cent in New York trading, their biggest leap in the company’s nearly 12 years on the market. Tapestry shares fell as much as 10 per cent.

“Tapestry has made a good acquisition, paying a price that is in line with what we believed Capri was worth,” Citi analyst Paul Lejuez wrote in a research note.

The transaction is expected to close in 2024, subject to approval by regulators and Capri shareholders.

‘Powerful’ combination

The combination of the six brands “creates a new powerful global luxury house, unlocking a unique opportunity to drive enhanced value for” customers, employees and shareholders, Tapestry chief executive officer Joanne Crevoiserat said in the statement.

The combined businesses will be the fourth-largest luxury company in the world with a market share of around 5.1 per cent, according to GlobalData analyst Neil Saunders. In the Americas, it will be the second-largest player behind LVMH, he added.

The combined companies are likely to dominate the US handbag market. “The addition of Michael Kors cements Tapestry as the No. 1 player in the accessible luxury handbag market in the US by a wide margin,” Wells Fargo analyst Ike Boruchow wrote in a research note. The companies’ “accessible” luxury items are much less expensive than the highest-end brands, such as LVMH’s Louis Vuitton. The accessible-luxury sector has been challenged in recent quarters in the US, though, as aspirational shoppers there pull back on spending with the pandemic luxury boom waning.

China rollout

Tapestry, whose Coach brand has been in China for decades, will likely focus on accelerating the rollout of Michael Kors in the country, which could help compensate for more sluggish sales lately on the companies’ home turf in the US. Tapestry generates around 15 per cent of its revenue in China, while Capri makes around 6 per cent to 8 per cent of sales in the country.

By adding Versace to its brands, the acquisition gives Tapestry its first direct access to a European luxury marque. Capri bought Versace in 2018 and has focused on increasing the brand’s sale of handbags and other accessories, successfully boosting revenue.

The companies said there are no financing conditions attached to the deal. Tapestry has secured $US8 billion in fully committed bridge financing from Bank of America Corp. and Morgan Stanley. The company expects to fund the $US8.5 billion purchase price through a combination of senior notes, term loans and excess Tapestry cash, using a portion of it to pay down some of Capri’s debt.

Capri’s shares have tumbled recently as a pullback in spending by US consumers in department stores dented sales of the mass-market Michael Kors brand. The company shares had fallen around 31 per cent in the past 12 months.

Capri, also based in New York, had been scheduled to report fiscal first-quarter earnings on August 8.

Luxury giants have been snapping up smaller brands in the world of Big Fashion even as inflation has potentially darkened the outlook for discretionary spending. Cosmetics firm Estée Lauder Cos. took over Tom Ford in a $US2.8 billion deal announced last year and completed in April. Kering, which had held talks to buy Tom Ford before it was sold to Estée Lauder, agreed a deal last month for a 30 per cent stake in fashion house Valentino for around $US1.9 billion. Kering also agreed in June to acquire perfume maker Creed at an undisclosed valuation.

Meanwhile, Tapestry benefited from a stronger-than-expected rebound in China sales in the quarter ended April 1. The company expects mid-single-digit sales growth in China in its current fiscal year. Tapestry’s shares have climbed nearly 20 per cent in the past year, valuing the firm at about $US9.6 billion.

Tapestry said the acquisition will generate cost synergies of more than $US200 million within three years after the closing of the deal due to supply-chain and other operating efficiencies. The new company will employ more than 33,000 people globally.

Tapestry said it’s committed to an investment-grade rating and that it anticipates reaching a leverage ratio of below 2.5 times debt to earnings before interest, taxes, depreciation and amortisation within two years of the closing of the deal — a target that it will aim to maintain in the long term.

Tapestry will suspend its share buybacks to prioritise debt reduction after the acquisition. The deal will be immediately accretive to earnings per share, the company said.

Retail spending grew 2.3 per cent year-on-year in June as consumers spent more than $35.1 billion in stores and online, according to data from the Australian Bureau of Statistics (ABS).

The most “significant” sales increase was in cafes, restaurants and takeaway services at 8.6 per cent followed by food spending up 5.8 per cent.

However, all remaining categories registered a decline in spending when compared to last year.

Household goods registered the biggest decline of 4.4 per cent followed by department stores, down 2.1 per cent, clothing, footwear and accessories down 1.5 per cent, and ‘other retailing’ at 1.1 per cent.

Australian Retailers Association CEO Paul Zahra said sales growth for essentials like food “masked an overall decline” in retail spending.

“Food makes up more than a third of retail spending and its performance is being inflated by unavoidable price increases.

“Despite overall sales growth, the reality is that we’re very much in the grip of a discretionary spending slowdown.”

Zahra said it has become a “precarious environment” for retailers as they simultaneously feel the pinch of the spending slowdown and are left at the mercy of rising operating costs across the board.

“Shoppers have become far more spending-conscious due to the rising cost of living, and we’re seeing that reflected in these results,” said Zahra.

By state, ACT led growth by 6.2 per cent followed by South Australia at 5.4 per cent, WA at 5.4 per cent, NT at 4.5 per cent, Tasmania at 1.7 per cent, NSW at 1.5 per cent and Queensland at 0.1 per cent.

Ben Dorber, ABS head of retail statistics, said retail turnover fell due to “weaker than usual spending” on end-of-financial-year sales.

“There was extra discounting and promotional activity in May, leading up to mid-year sales events. This delivered a boost in turnover for retailers, but that proved to be temporary as consumers pulled back on spending in June.”

National Retail Association CEO Greg Griffith said the “lack of impact” from mid-year year sales shows how far consumer confidence has fallen.

“Consumers are only opening their wallets for non-discretionary spending, if not for special occasions.”

He advised other retailers to adopt sales tactics like the big retailers who have found consumer loyalty with their own branded products to ride out the economic storm

Australian-born online retailer Princess Polly is expanding its wholesale agreement with US retailer PacSun to 100 stores, as its parent company AKA Brands reports economic challenges in Australia.

Princess Polly signed the wholesale agreement in May this year, starting with 15 PacSun stores that would carry up to 50 Princess Polly styles. PacSun operates 350 stores across the US market.

The Australian fashion brand is also on track to open its first store in Los Angeles next month.

AKA Brands CFO and interim CEO Ciaran Long said Princess Polly’s wholesale growth marks part of an overall strategy.

“Importantly, we are increasing our total addressable market, particularly in the U.S., by introducing our brands to new customers through direct to consumer and omnichannel initiatives,” AKA Brands CFO and interim CEO Ciaran Long said.

“Looking ahead, we remain laser focused on chasing consumer demand, driving greater operational efficiencies and strengthening the balance sheet by paying down additional debt through the remainder of the year.

“We remain confident in the future of our brands and our business model and are committed to driving shareholder value.”

AKA Brands reported a net sales decrease of 14.2% to US$136 million for the second quarter ended June 30, 2023, compared to $158.5 million in the second quarter of 2022.

The decrease was driven by a decline in the number of orders and average order value during the quarter, AKA claimed, primarily driven by adverse macroeconomic conditions in Australia.

In the quarter, its Australian sales were down 28.4% to $48 million on the same period. Compared to the 2021 second quarter, Australian sales were down 31.1% from $69.7 million in Q2 2023.

AKA Brands’ US market saw a drop in sales of just 2.8% to $79.9 million in Q2 this year compared to last year.

The group’s overall net loss was $5 million and negative 3.7% of net sales in the second quarter of 2023, compared to a net loss of $4.2 million and negative 2.7% of net sales in the second quarter of 2022.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was $5.6 million, or 4.1% of net sales, compared to $5.9 million, or 3.7% of net sales in the second quarter of 2022.

“We continue to execute against our strategic initiatives and have made significant improvements in our operating efficiencies, which enabled us to deliver on our adjusted EBITDA and cash flow expectations for the second quarter,” Long said.

“I’m also pleased that we continued to strengthen our balance sheet by way of strategically reducing inventories, which were down 16% since the end of fiscal 2022, and we paid down $12.5 million of debt in the quarter.

“The U.S. performance was in line with our expectations, registering $80 million of net sales in the second quarter and delivering 12% growth on a two-year basis.

“Despite the inline performance in the U.S., our overall net sales were dampened by continued macro pressures and consumer challenges in Australia.”

Meanwhile, Australian-born brand Culture Kings, also under AKA, has struck recent partnerships with Rolling Loud music festival and the Ultimate Fighting Championship, and is reporting a strong performance in its Las Vegas flagship opened in November 2022.

Culture Kings operates seven stores in Australia, and one store in New Zealand.

AKA’s third Australian-born subsidiary, fashion retailer Petal & Pup, is exceeding expectations on the US Target marketplace according to the group, and is currently exploring additional omnichannel tests.

The fashion group also owns US fashion brand mnml, which AKA claims is a top 10 brand at Culture Kings and continues to leverage the Australian streetwear brand for new customer acquisition and marketing activations.

The boss of DIY giant Bunnings says the company’s push to simplify its back office should translate to a better experience for customers seeking bargains as its ongoing investment in technology starts to pay dividends.

The Wesfarmers-owned hardware chain restructured its senior management team this week, stripping out a layer of eight “regional manager” roles at the business.

Bunnings managing director Mike Schneider said while the changes are part of its stated strategy to streamline communication across its teams, the hardware giant was in no rush to cut its overall workforce down to size.

“Overall, our team continues to grow as we actively recruit roles across our store network to ensure we are offering customers the best experience,” Schneider said.

Less than 10 roles will be affected by the changes, with all affected staff offered the opportunity to be deployed to other roles.

The move comes as Bunnings doubles down on projects to boost efficiency and use tech to help staff spend less time on tasks like locating stock and refreshing price tickets.

“We’re continuing to work really hard to find innovative ways to boost productivity and efficiency across our business,” Schneider said.

“We’ve invested in a number of tech-based projects that are helping us achieve this, aimed at reducing the number of hours our team spend on task[s] and reinvesting them into customer service.”

“This investment, coupled with the small changes we’ve made to our operations team, all comes down to simplifying our business. Our goal is to help our store and support teams become more efficient, productive and streamlined, leading to an even better experience for customers.

“We know that simplicity can be a really powerful asset in retail, which is why it’s a real focus for us moving forward.”

Schneider gave some examples of the retailer’s investments in tech at Wesfarmers’ strategy day in May, when he told investors that the group had used technology to remove or redeploy 2.4 million hours of “task time” since 2020.

Bunnings has been trialling electronic shelf labels to save hours spent updating paper tickets, and has also recently run trials using robots in store to scan aisles overnight and work out what stock needs replenishing.

“What we’re aiming to do here is reduce team member hours spent locating hand stock to be filled or completing gap and price checks,” Schneider said in his presentation to the investor day.

Retail analysts have been optimistic that Wesfarmers’ stable of low-cost brands, which include Bunnings, Kmart and Target, will be well-placed to benefit from the trends of consumers trading down their purchases to budget varieties.

News last week of Wesfarmers’ plans to merge the back-end and technology processes of Kmart and Target into one system further suggests the retail giant is looking to streamline its operations as it looks to capture budget-focused shoppers.

Wesfarmers boss Rob Scott said back in May that the focus on essentials at Bunnings, Kmart and Target positioned the retailer well for tougher trading conditions.