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The Daily Edited (TDE) has been pulled out of liquidation with a sales process commencing for the accessories brand. 

KordaMentha Restructuring is seeking Expressions of Interest in the sale of TDE, which collapsed in September owing $2.8 million to creditors.

KordaMentha Partner Kate Conneely said she expected a lot of interest in the sale from potential buyers. 

“The Daily Edited is already a favourite of fashion-conscious consumers, both locally and overseas. It is well known for the quality of its products and beautifully curated shopping experiences, both in-store and online,” she said.

“The fundamentals for a high-performing, boutique fashion business are in place. This is a great opportunity for a buyer looking to build on an established brand with loyal and engaged consumers, and set it up for future success.”

TDE traded personalised accessories, retailing leather goods that consumers could customise with monograms.

Its product range included bags, purses, wallets, organisers and phone and laptop cases for both men and women.

TDE has a flagship store in the Queen Victoria Building in Sydney’s CBD, an online shop and shopping enabled on its popular social media platforms.

The brand is also well known for its collaborations with international influencers and fashion personalities, such as Hailey Bieber and Amber Valletta.

Prior to its collapse, the business outlined a strategy for future growth including changes to production and brand. 

Australian-owned and operated sportswear brand LSKD is opening its third retail space this year, as part of a plan to expand its retail presence before peak period.

The 150sqm Westfield Chermside store – which has a custom-front design – is set to open on 3 December, and follows the opening of its Chadstone store, which had 20,000 customers walk through the doors when it launched in October. 

It follows the brand’s first store, which opened at its headquarters in Loganholme, Queensland, in January, and is part of a plan to open five stores across all major Australian cities – as well as a shop in New Zealand – over the next 12 months.

LSKD founder and chief executive Jason Daniel tells Inside Retail that its core value is to move fast and break shit. 

The business – which started as a wholesaler before transitioning to e-commerce in 2019 – achieved $50 million in sales over the last financial year, with Daniel explaining that it was in a position to utilise that growth, and grow its retail presence.

He says that the brand was motivated by its successful transition in e-commerce which, like physical retail, was uncharted waters.

“It was purely going back to our values. We were in a position where we could invest in the long term, as well as our community,” he said.

Daniel adds that the Chadstone launch was so successful in part because of its tights and shorts swap. 

The first 300 females and 300 males to enter the store were able to swap their shorts and tights with an LSKD model. It then worked with charity partner, Upparel, to donate the products that were handed in.

He said the initiative created a lot of energy and excitement over the shop launch, which saw lines forming from 5:30am on opening day.

“The best thing about retail is we can really connect and build community with customers,” he said.

“We’ll have two stores leading into this Black Friday, and three leading into Christmas.

“This time last year, we didn’t have any, so it’s really exciting.”

BMX origins

Daniel started the business, then called Loose Kid Industries, in 2002, when he was in high school. Its origin dates back to his nickname, as he would give everything a go on a BMX bike. He had ambitions of becoming a professional motocross athlete, before becoming a carpenter and building houses while working on the business.

In 2010, LKI became a full time job for Daniel. It produced a range of wholesale products, including life jackets, motocross gloves and socks and a bit of sportswear. It sold these products to retailers, including City Beach, which had over 66 stores across Australia.

In 2018, the business transitioned to LSKD, with Daniel explaining that it found its mission, which was inspiring people to ‘chase the vibe’ through sports, fitness and adventure. It pivoted to sportswear with a street aesthetic.

“I’m 35 now, and it was a 15-year learning experience that I was lucky to go through. We refined our products, and were very passionate about developing the best fabric in the world for our community, as well as the everyday athlete,” he said.

Daniel adds that the brand moved away from wholesale after launching its rep tights in July 2019, which was its best-selling product. 

The product took over 18 months to develop with the wants of its customers – rather than other retailers – in mind. 

When we closed our wholesale business down, we really just wanted to focus on our brand message and our customers,” he said.

“If we could really focus on them [we could] build something for the next 50-plus years.”

Giving back

Beyond plans to expand across the country and grow its New Zealand presence, LSKD is developing a United States team, and has recruited 175 new team members for its fulfilment centre to prepare for peak period. Daniel said it’s part of its growth plans, which is on track to grow another 50 per cent this year.

This growth is partly tied to the brand’s product development – in order to create the best sportswear in the world –  as well as its values, which includes an emphasis on sustainability, as well as work with charity partners. 

Its Project Earth initiative involves in-house commitments to reduce printing and paper by 20 per cent each year, as well as a focus on reusable and biodegradable packaging. Daniel says that he has used the brand’s ziplock packaging as a lunch esky, travel bag and gym bag. 

It also works with charity partners such as the Cystic Fibrosis Queensland, Wear It Purple and the National Breast Cancer Foundation. It raised $70,000 for the NBCF last month, and has ongoing products where 5 per cent of sales are donated.

They also have an in-house give-back crew, formed by its CFO, which allows the team to support local communities and organisations. 

Daniel says that it provides an opportunity for team members to support organisations that they care deeply about.

“There’s more that’s happening in this space that we’re going to share more of, because it can inspire other brands and our community [in terms of] how they can give back as well,” he said.

“Learned more from the mistakes I’ve made”

Working on LSKD since he was a teenager, and being in the role full-time since 2010, Daniel says the biggest learning moments have come through mistakes, which have helped to build the brand’s identity.

“If we had this growth 10 years ago, I don’t know how I would’ve handled it, because I was so young, and I’m not sure I was in the right frame of mind to learn from those mistakes,” he said.

“Our business was much smaller for many years, and as much as you want it to grow quickly, sometimes it doesn’t. Then we started to figure out that creating something bigger than ourselves – and standing for something more than just selling a product – was so important.”

Trans-Tasman retailer Strandbags has changed its brand name to Strand as part of a multi-year modernisation strategy to attract new customers.

The company will follow up the name change by investing in improving customers’ omnichannel experiences including modernising all systems, introducing automation and streamlining operations.

Strand Group CEO Felicity McGahan said the brand’s legacy needs to “evolve” and attract a new generation of shoppers.

“For 95 years, Strandbags has been a consistent and reliable presence in the lives of thousands of Australians and New Zealanders. Our new purpose is to elevate all of life’s journeys – whether you’re planning a trip around the world, or simply popping out to the shops.”

Earlier this year, the retailer launched two private labels – Evity and Nere – which she said have both exceeded revenue targets. Evity alone is set to achieve sales in excess of $100 million in its first year.

“The success of these brands proves the efficacy of our modernisation strategy, and demonstrates the positive progress made to develop products that are fit for purpose and relevant to our growing customer base,” said McGahan.

As part of the brand’s evolution, its Melbourne-based Highpoint flagship has been transformed into a Boutique Service Model complete with Mobile POS, “trained handbag stylists and expert luggage advisors”. The store will open to the public on December 10.

Boots and bush clothing maker RM Williams lifted sales by 17 per cent in the 12 months ended June 30 to about $220 million, and is preparing to become a “greener” company under owners, iron ore billionaire Andrew Forrest and his wife Nicola.

Chief executive Paul Grosmann, who was hired from Nike to take the helm of the 90-year-old company last year, says there has been “solid momentum” in the first four months of the new financial year but expects trading conditions to become tougher.

One element which RM Williams has behind it is the long life span of a pair of its boots. “There is longevity behind it. It’s a long-life purchase and a considered one, that’s not a fast fashion purchase,” he says.

Mr Grosmann is hoping that will be a shield against any economic slowdown, but acknowledges that RM Williams’ items are a discretionary purchase.

RM Williams lifted the prices of its boots by about 8 per cent in June as it passed on rising input costs. The core range of high-quality boots went from a price tag of about $600 to $650

“That was the first price rise in about three years,” he said.

The boots, clothing and belt maker was acquired by the Forrests’ investment company, Tattarang, in October 2020 for $190 million. Film star and entertainer Hugh Jackman sold his 5 per cent stake in RM Williams to Tattarang under the deal.

Mr Grosmann says there is a multi-pronged push to enhance the sustainability of the business. It will step up a repair and re-use push where customers can return an older pair of boots to retail stores and online.

“We actively repair the boots and sell them at a discount”.

The company is also cutting the use of plastic packaging and has programs to ensure leather is being sourced from tanneries which are the most efficient, and use the least amount of water.

It is also stepping up a drive to reduce the amount of waste leather in the bootmaking process. “We do the whole process ourselves”.

By reducing the amounts used in the cutting and production process, small savings can be made.

The long life of high-quality boots is a plus in the overall push for “greener” credentials.

“That definitely is an area where we have a head start,” Mr Grosmann said. The company aims to reinforce the high-quality and longevity of its products with a marketing blitz under the “Crafted for Life” banner.

RM Williams has a workforce of about 1200 people, including 500 at the Adelaide manufacturing plant and distribution centre in the suburb of Salisbury, where the boots are made.

Mr Grosmann said a decision would be made within six months on plans to expand the production footprint.

The Salisbury plant is likely to remain at the core, and RM Williams is doing due diligence on other potential sites. “It’s most likely in the same area. We want to keep the team together.”

Last month, the business set a record for the production of boots, with an average daily rate of 1600 pairs. It produced 280,000 pairs in 2021-22, up from 250,000 the year before.

Mr Grosmann said improving sustainability was something that customers expect, but was also being given an added push by the company’s owners.

“It’s just the right thing to do. It’s important for the Forrest family,” he said.

Mr Forrest, Australia’s second-richest person from iron ore profits at Fortescue Metals, has spruiked green hydrogen around the world and made ambitious promises to try to decarbonise iron ore and the steelmaking process.

He set up Fortescue Future Industries, a wholly owned subsidiary of Fortescue Metals Group, to be the flagship entity for his green push and hired former Reserve Bank of Australia deputy governor Guy Debelle as chief financial officer.

Mr Forrest has been attending the COP27 climate conference at Sharm el-Sheikh in Egypt.

RM Williams has 71 retail stores and a growing online business. Legendary bushman Reginald Murray Williams started the business in 1932.

KMD Brands, owner of Kathmandu and Rip Curl, has appointed Zion Armstrong as a non-executive director.

Armstrong has over three decades of experience in the global sportswear industry, including 24 years at Adidas.

He stepped down as North America president in early 2022 to return to New Zealand.

Armstrong commenced his career with Adidas in New Zealand as footwear product manager in 1998 before moving to the headquarters in Germany in 2002.

From 2005 to 2014, he held various leadership roles in Asia-Pacific including president and managing director for Adidas Group South Korea.

Since 2015, he served as GM of North America and in 2018 was promoted to president.

KMD Brands chairman David Kirk welcomed him to the board. 

“We are thrilled that Zion has agreed to join the board of KMD Brands. He brings extensive background and capability in global branded sports apparel and footwear.

"His experience and proven capability in global brand management, product development and multi-channel distribution is a perfect fit for the next stage of growth for KMD Brands.

"North America and Asia are important long term growth markets for our brands and Zion’s experience in these markets will be invaluable as we move forward on our strategic pillar of building global brands”.

As required by the company's constitution and the NZX Listing Rules, Armstrong will hold office until the annual shareholders’ meeting of the Company following the effective date of his appointment, at which time he will resign and stand for election.

Armstrong has agreed to join the company as a non-executive director effective December 1. 

Retail sales at Westfield malls have bounced higher, by an inflation-beating 15.6 per cent in the September quarter on their pre-pandemic levels, as cashed-up shoppers are confident enough to keep on spending.

The third quarter trading update from ASX-listed Scentre, the owner and manager of 42 Westfield malls around the country, is the first from its new chief executive, former chief financial officer Elliott Rusanow, who said the surge in sales figures augurs well for festive season trading.

Specialty sales picked up 12.9 per cent in the first three quarters of the year, compared with 2019, indicating retailers’ trading results have accelerated in the last quarter alone. All that activity at the till comes as customer visits surged, up 16.7 per cent to 391 million so far this year, compared with a year earlier.

Mr Rusanow expects individual visits across the malls portfolio to hit 500 million by the end of the year, promising a strong fourth quarter for the Westfield portfolio.

“This is going to be the first festive season in three years where people won’t have restrictions placed on them,” he told The Australian Financial Review.

The lift was less a case of “revenge shopping” and more the result of a “structural improvement” in what Westfield customers were doing with their time and money after two years of rolling lockdowns, he said.

And if freedom from restrictions is what is pulling more shoppers into its malls, then the push, according to Mr Rusanow, is the fact that other discretionary spending options such as travel are now relatively more expensive.

“We compete very well in that competition for the time and attention of people because we in effect offer free entertainment as well as a place to go to around the festive season,” he said.

“The level of savings that has been accumulated over that two-year period over 2020 and 2021 is a very large amount of money. It’s not all being redeployed back into other things that they might have traditionally been spending on. The consumer is in a very healthy position.”

That level of spending has flowed through the financial health of Scentre’s tenants. The shopping centre owner has collected $1.92 billion in rent this year, an increase in $235 million over the comparable period last year. The rent collection tally represents more than 100 per cent of billings, a sign Scentre is catching up on rent owed.

While the strong sales figures themselves incorporate some impact from inflating prices, Mr Rusanow is confident that consumers will keep up their level of spending in Westfield even as living costs rise.

“They are concerned about the rising cost of living but the impact of that on our business is less than what it might be on other forms of spending,” he said.

Scentre’s leases are set up to include CPI-linked increments, giving the landlord a buffer against inflation, but also putting pressure on its retailers to maintain their sales growth sufficiently to support their rents.

Scentre does not update its re-leasing spreads – a key metric showing the difference between old and new leases – at the third quarter, but Mr Rusanow said they were continuing to improve.

Scentre has reconfirmed its earnings guidance for a 14.2 per cent growth in funds from from operations to 19¢ per security for 2022, with distributions of at least 15¢, up 5.3 per cent.

“Scentre’s guidance looks conservative on the back of today’s positive metrics,” Morgan Stanley analysts wrote.

Amazon on Thursday forecast a slowdown in sales growth for the holiday season, disappointing Wall Street and warning that inflation-wary consumers and businesses had less money to spend.

Amazon’s 12 per cent extended-trade stock drop erased about $140 billion in its market capitalisation, greater than the entire value of companies such as Morgan Stanley, Netflix and Lockheed Martin.

For months, the world’s biggest online retailer has fought against troubling macroeconomic tides. It hosted not one, but two cornerstone sales events in a year: Prime Day in July, and the Prime Early Access Sale this month.

For the summer event, it sold more items than ever before to its Prime loyalty shoppers, and, meanwhile, the company sought revenue from higher Prime subscription fees and a surcharge on some merchants.

Net sales were $127.1 billion in the third quarter that ended Sept. 30, still a little lower than the $127.5 billion analysts expected, according to IBES data from Refinitiv.

But the macro outlook has not brightened. In a call with reporters, Amazon Chief Financial Officer Brian Olsavsky said the company was bracing for slower economic growth.

“We are seeing signs all around that, again, people’s budgets are tight, inflation is still high, energy costs are an additional layer on top of that caused by other issues,” he said. “We are preparing for what could be a slower growth period, like most companies.”

European consumers in particular have spent less than their American counterparts, pinched by the war in Ukraine and higher fuel costs, which likewise increased Amazon’s expenses, he told reporters and analysts. The company’s international-segment operation loss widened to $2.5 billion in the third quarter from $0.9 billion a year prior.

While Amazon would continue to fund earlier-stage businesses like its lucrative cloud-computing and advertising divisions, it would question costs elsewhere and proceed carefully on hiring, Olsavsky said.

Wedbush Securities analyst Michael Pachter said, “It’s possible that retail sales will decline year-over-year. I don’t actually believe that will happen, but the market definitely doesn’t like it.”

Amazon forecast net sales of between $140 billion and $148 billion, or growth as little as 2 per cent from a year earlier. Analysts were expecting $155.2 billion.

Prior holiday quarter sales growth was 9 per cent in 2021 and 38 per cent in 2020.

Cloud misses

Across the retail sector, US online sales are expected to rise at their slowest pace in years this holiday season. Consumer goods company Unilever PLC likewise believes “sentiment in Europe is at an all-time low,” its chief financial officer said earlier.

Results in the tech industry were just as poor this week for cloud-computing rivals Microsoft Corp and Alphabet Inc’s Google, adding to recession fears. US consumer confidence did a U-turn in October.

“Big tech companies are not impervious to slowdowns in the economy, particularly if they are consumer driven,” said Rick Meckler, partner at Cherry Lane Investments in New Jersey.

Amazon Web Services (AWS), the company’s lucrative data-storage and computing division serving enterprises, only helped so much. While it provided much-needed operating income, just like rival Microsoft’s Azure cloud, Amazon fell short of estimates.

Amazon’s cloud sales growth has ticked down consistently in the past year. Net sales there grew 28 per cent in the July-September period versus 39 per cent a year earlier, when adjusted for changes in foreign exchange.

Paolo Pescatore, analyst at PP Foresight, said, “With so much unpredictability there is huge concern, which is impacting confidence among enterprises to invest. In turn, it is hitting the broader cloud sector and companies such as AWS and Azure.

Facing high inflation and receding consumer demand, Amazon’s Chief Executive Officer Andy Jassy has raced to control costs across the company’s vast array of businesses.

Amazon has slowed warehouse openings and refrained from filling some open positions. It announced it would shut down its virtual healthcare service by year-end, and it is scaling back a long-touted effort to deliver goods via small autonomous sidewalk cars

Still, worldwide shipping costs grew 10 per cent in the third quarter to $19.9 billion. Amazon’s net income also decreased to $2.9 billion in the third quarter, while beating analysts’ average estimate of a $2.2 billion profit, according to IBES data from Refinitiv.

In a statement, Jassy said, “There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets.”

Trans-Tasman electronics retailer JB Hi-Fi says it is “pleased” with its first-quarter performance as it built continuing sales momentum across the business.

For the three months to September 30, sales growth compared with the June quarter was 14.6 per cent for JB Hi-Fi Australia, 12.3 per cent for The Good Guys and 27.7 per cent for New Zealand.

However, when compared with the same quarter a year earlier, like-for-like sales were down 7.9 per cent in Australia, 6.4 per cent in New Zealand and 6.1 per cent at The Good Guys.

Group CEO, Terry Smart, said that in an uncertain retail environment with household budgets under increasing pressure, customers gravitate to trusted value-driven retailers.

“Our ongoing strategy of providing customers with the best value and outstanding service every day will ensure our brands continue to deliver for our customers.”

Analyst Ben Gilbert, head of Australian research for Jarden, said there are few signs of a slowing in overall consumer spending and he expects JB Hi-Fi to trade well over Christmas.

“Our industry discussions suggest the market remains rational, with the mix unchanged, suggesting gross merchandise sales likely in line with the previous corresponding period.

“High-frequency data suggests household goods trends are moderating with house prices as one of the single biggest drivers of spending.”

As businesses recover from the disruption of the pandemic, new research shows Australians prefer the online shopping experience more than that inside bricks-and-mortar stores.

The annual Retail Monitor survey from the Australian Consumer and Retail Studies (ACRS) unit of Monash Business School found that customers preferred online shopping due to product availability, promotions, product ranges and sales.

In the three months to September this year, about 70 per cent of Australians purchased clothing, footwear and accessories in-store or online, 49 per cent personal care items and 42 per cent household items.

Eloise Zoppos, a principal research consultant at the ACRS, said prior to the pandemic a “clear divide” between physical and online shopping experiences was common amongst shoppers.

“During Covid, online became the main non-grocery retail channel out of necessity and the majority of Australian shoppers turned to online methods.

“We’re now seeing the return of a preference for physical stores and shoppers are moving between the offline and online worlds more seamlessly than ever before.”

Alongside purchases, the survey also found that customers were more likely to return items bought in-store (about 66 per cent) compared to online (at 42 per cent).

Zoppos said it is “increasingly important” now that retailers provide shoppers with a “seamless returns experience” in order to meet expectations.

“Rather than seeing returns as a problem, retailers should look at returns as an important stage of the customer journey – when done right will result in customer loyalty, advocacy, and a cycle back to the purchasing stage.”

Anna Carrabs has stepped down as the CEO of Australian furniture retailer King Living, after seven years in the role.

The Australian-owned company manufactures and sells indoor and outdoor furniture.

“It has been a privilege to have been the leader of a company that has grown and prospered and to have worked with a team that has helped create the platform for the future growth of the company,” said Carrabs.

David Woollcott has taken over operations from Carrabs and will move back to Sydney from the UK at the end of November.

“King Living has a remarkable history, true design and engineering pedigree and an extraordinary future ahead of it,” he said.

Myer has released its annual Christmas marketing campaign, with catchlines including 'Grab Christmas by the baubles'.

Myer CCO Geoff Ikin said the creative encourages Australians to embrace the chaos of the Christmas season. 

“The campaign has been created to cut through the noise in typically the most cluttered media environments at Christmas," he said.

"It's fun, engaging, irreverent and offers what our customers love – a little surprise and delight. Australians love to celebrate Christmas, and so do we!”

The campaign, 'Let the Season be the Reason', launches with a film that is set on Christmas eve.

The assets will be delivered across TV, BVOD, OOH, digital, social, online, in-store VM, gift wrapping and team member uniforms.

Campaign tag lines include; ‘Stuff the turkey, stocking and self-control’, ‘Grab Christmas by the baubles’, and ‘Deck the halls, kitchen and living room’.

"When it comes to Christmas no one does it better than Myer," Ikin said.

This year we’re approaching the festive season with more confidence than ever knowing Myer is unmistakably the trusted home of all Christmas gifting and entertaining needs. 

“From our much-loved Melbourne Christmas Windows, which will feature iconic scenes in celebration of Disney’s 100 years of wonder, to our national Santalands, curated Giftoriums and our Myer one VIP shopping nights, we are there to help our customers celebrate this festive season.”

Wesfarmers chief executive Rob Scott says retail trade remains robust so far this year, but shopping patterns indicate some customers are becoming more price sensitive as they try to manage squeezed household budgets and rising energy costs.

The Western Australia-based conglomerate owns key retail brands Bunnings and Kmart, but also is pushing into lithium in its $1.9 billion Mount Holland project and new health division. 

Mr Scott told shareholders at the group’s annual meeting in Perth on Thursday Australian consumer demand continued to be supported by low unemployment and high levels of accumulated household savings, but rising interest rates and the impact of inflation were starting to affect consumer behaviour.

Mr Scott said Wesfarmers was well-placed to meet shoppers’ needs as they looked for value, and the combined sales growth for Kmart and Target in the year-to-date was strong, even when adjusting for the impact of lockdowns a year ago.

“Kmart’s market-leading value and low price points position it to meet customer needs and profitably grow its market share in an environment where shoppers are more focused on value,” he said.

“Target continues to benefit from good progress in delivering on quality and style at affordable prices.”

Mr Scott said at hardware giant Bunnings, sales in recent months had been hurt by the wet weather, but overall sales growth for the year-to-date remained resilient and supported by strong demand from commercial customers. DIY sales growth was positive, but moderated from the high levels experienced through COVID.

Officeworks’ sales for the year-to-date remain broadly in line with the prior year, while the industrial and safety division has continued to improve, with sales growth recorded across all business units through the year-to-date.

Sales at Catch marketplace have declined so far this year following a surge in pandemic-led spending a year ago for most online players. But Catch was a serious underperformer for Wesfarmers in its first half of 2022 when sales fell 4.3 per cent and earnings were hit by more discounting.

The newly appointed Catch CEO, Brendan Sweeney, joined this month and will focus on improving the customer offer while managing the ongoing investment program to support scalability and growth.

Mr Scott called the 2023 year “foundational” for the OneDigital division as the vertical invests in systems and capabilities to support its data and digital ambitions. Wesfarmers expects OneDigital to post an operating loss of $100 million for the financial year, excluding Catch.

Mr Scott said the chemicals, energy and fertilisers division had continued to benefit from strong customer demand and elevated commodity prices, and development of the Mount Holland lithium project was progressing well.

In about two years, Wesfarmers will be selling lithium hydroxide, refined at Kwinana in Western Australia, to support the accelerating global uptake of electric vehicles.

“Each year, the production from our lithium hydroxide project, on a 100 per cent basis, will be equivalent to powering 1 million battery electric vehicles, resulting in annual savings of around 1.8 million tonnes of emissions,” Mr Scott said.

Chairman Michael Chaney said hopefully there would not be a recession in Australia, albeit “we will likely have a slowdown in economic activity from next year”.

Mr Scott warned that elevated supply chain costs, rising wages and surging utilities, together with a weak Australian dollar, would impact the group’s businesses in the 2023 financial year.

But overall the Wesfarmers’ balance sheet is strong and holds a diverse portfolio of high quality, cash-generative businesses, so it is well-placed to weather any storm next year.

“While there are some risks on the horizon – including elevated inflation, rising interest rates and geopolitical tensions, I continue to believe that Wesfarmers is well positioned for this environment and has the capacity to effectively manage a range of economic scenarios,” he said.

Speaking after the meeting attended by almost 900 shareholders, Mr Scott said rising power bills were a key component of the cost pressures being faced by Australian households.

“The cost pressures on consumers are increasing, and energy cost are a key part of that and I think that is why we are already starting to see consumers be more value conscious,” he said.

Asked if he expected Bunnings earnings to come under pressure with inflation hitting 7.3 per cent, a softening in house prices and post the DIY boom during COVID-19 lockdowns, Mr Scott said the hardware chain had shown itself to be resilient business through economic cycles.

“In tough markets, consumers put a greater focus on price and value so often in the tougher markets Bunnings tends to outperform,” he said.

“Like any retail business, we are not immune from a slowdown in the economy, but we feel Bunnings is a very resilient business and well-prepared in a downturn.”

Myer has commenced its “biggest transformation” in store technology in recent years, with the move set to see a 20% reduction in transaction times. 

The 18-month transformation will deliver new Zebra TC57X mobility devices and new NCR point of sale to all stores.

The mobility devices are aimed at improving receiving and dispatch, stock take, online fulfilment and inventory enquiry/pricing.

Its “One Device Strategy” will see all core business applications bundled into the Mobility device, including a new Push-To-Talk application which will connect team members across the store.

The NCR point of sale registers will be rolled out in FY23 with new software, which is expected to enhance customer experience at the checkout.

This is in addition to Myer’s leading M-Metrics team member application, which provides team members with real-time digital communications, product knowledge and performance recognition. The app displays customer feedback and provides a wide range of learning moments, including video content.

“Myer is embarking on our biggest transformation of store technology in recent history, ensuring a better experience for customers in store,” Myer GM of retail operations Gary Stone said.

“Our new registers will ensure simpler and quicker transaction times – approximately 20 percent faster, and through our new Zebra devices we can provide on-the-spot assistance with stock availability, as well as team members being able to connect to provide faster service and assistance to our customers.

“This step-change in technology will ensure Myer remains Australia’s favourite and most trusted department store into the future.”

Store transformations

As well as improving in store technology, Myer is also preparing for continued refurbishments and strategic footprint reduction in FY23.

Toowoomba and Albury stores have recently seen refurbishments, with a re-layering taking place at Chadstone and Fountain Gate. There is further space optimisation planned at an extra 17 stores in FY23.

Through strategic footprint production, Myer has closed Knox and Blacktown in 2022, with space reductions conducted in Toowoomba, Chermside and Eastland stores.

Its Frankston department store has been scheduled for closure in January 2023.

In total, Myer has exited or announced a reduction of 119,534 square metres GLA (11.1%) of space since the first half of 2018, with a further 69,000 square metres in preparation.

The company cites the reducing of CODB as the reason for these strategic store closures.

The Medibank cyberattack has taken the heat off a data breach at Woolworths’ new online marketplace, MyDeal, but retailers remain on high alert after a string of hacks that have stolen the data of more than 16 million consumers in a month.

With their reams of personal and credit card data from loyalty schemes, e-commerce sites, online marketplaces, subscription-based delivery services and point of sale systems, retailers have emerged as irresistible targets for hackers.

The shift from cash to credit cards and digital wallets, and the implementation of multiple technologies as retailers digitise their operations and move from bricks and mortar to online, have given cyber criminals ever more ways to exploit the sector’s defences.

Cybersecurity experts say the $400 billion sector’s so-called “attack surface” – the outward-facing parts of their business that can be accessed and exploited – is growing as retailers seek to boost sales by making more targeted offers to customers, collaborate with suppliers and partners, and reduce costs by implementing new data-driven technologies.

“The breaches we’ve seen recently are a wake-up call for all businesses to ensure they’re doing everything they can to safeguard customer information,” says Australian Retailers Association chief executive Paul Zahra. “Cybersecurity remains a huge focus for retailers and will require ongoing attention.”

Arjun Ramachandran, principal at cybersecurity firm elevenM, says retailers are being specifically targeted because they hold large stores of valuable data, and their data protection and cybersecurity systems might not be as robust as those in other sectors such as banking and telecommunications.

“Retailers have always had to hold and handle financial and transactional data like payment information and credit cards, but the recent breaches have illuminated the broader value of the customer data they hold to hackers and attackers,” Ramachandran says.

While four million Medibank Private customers are understandably worried about the theft of confidential health information, major retailers such as Woolworths, Coles, Wesfarmers, Endeavour Group and Myer are storing vast amounts of customer data that is equally sensitive, ranging from their names, addresses, phone numbers, drivers’ licences and date of birth to the pharmaceuticals and health care products they use, the amount of alcohol they consume and even the size of their bras and underpants.

Retailers claim their loyalty data is de-identified, but if their systems can identify customers by name and email address and track their spending, it’s not hard to imagine increasingly sophisticated hackers will find ways to put two and two together.

“De-identification is not a panacea,” says Ramachandran. “There’s plenty of research showing that information that’s been purportedly de-identified has been very readily re-identified. That’s an incredible risk.”

Ten years ago The New York Times published an article revealing that US retailer Target was using predictive analytics to pinpoint when customers became pregnant – even before they had told their families – and predict their due date based on changes in their spending habits. Target sent them coupons and offers including discounts on maternity wear, vitamins and nappy bags.

Most large retailers are now using predictive analytics to track and forecast customer spending, but to do so accurately they need more customer data. This data is gold in the hands of cybercriminals, who sell the information on the dark web, rack up bills on credit cards, steal identities to commit other crimes, or withhold the data and hold companies to ransom.

Customers trust their data will be protected and when this trust is broken, they are likely to stop scanning loyalty cards – depriving retailers of precious insights – or stop shopping with the retailer altogether.

Hackers moved too quickly

It’s too early to tell if the cyberattack on online marketplace MyDeal, barely a month after Woolworths acquired an 80 per cent stake, will deter customers and lead to a decline in sales.

Woolworths’ chief security officer Pieter van der Merwe, told The Australian Financial Review last week the retailer had started strengthening MyDeals’ cybersecurity systems after identifying areas of weakness during due diligence for the acquisition.

But the hackers moved too quickly, breaching MyDeal’s customer relationship management system in mid-October. About half of the 2.2 million customers affected had their email addresses exposed. For the other half, names, phone numbers, addresses and birthdates were exposed, but no payment details, passwords, drivers’ licences or passport details were accessed.

Woolworths chief executive Brad Banducci apologised at the annual meeting on Wednesday, saying the retailer took cybersecurity and data privacy seriously.

“We were weeks away from all the remedial action being done to lift it to the standard we would expect at Woolworths. It wasn’t that it was a poor standard, but there were things to be done,” Banducci said.

“But as a major public company, we are going to be targeted. Going forward, if we ever found ourselves in this situation again, we’d make sure that at the point of completion it was at our standard, the work was under way to get to our standard. So, it has been a real lesson for us.”

Woolworths is doubling its spending on cybersecurity and core IT, testing APIs (the apparent entry point hackers used to penetrate Optus’ defences), testing penetration protections and reviewing all its datasets and data retention policies.

“This is an area we have to be absolutely vigilant over all the time and you can’t relax,” said outgoing Woolworths chairman, Gordon Cairns.

Coles is also reviewing cybersecurity following the MyDeal, Optus and Medibank and Vinomofo attacks.

“As soon as something happens we look at what’s happened and are we exposed in the same way or not,” says Coles chief executive Steven Cain.

“It’s a continuous investment program. No one is bulletproof. The hackers are becoming more sophisticated over time as well.”

Many major companies, including Coles, benchmark themselves against the Australian Cyber Security Centre’s Essential Eight framework, which outlines a minimum set of preventative measures designed to make it harder for adversaries to compromise systems.

However, Essential Eight will not mitigate all cyber threats and the ACSC says organisations may need to implement additional measures and security controls where they are warranted by their environment.

The Essential Eight mitigation strategies include patching applications and operating systems, restricting administrative privileges, regular system backups and implementing multifactor authentication, including one-time codes to supplement passwords and usernames.

“A lot of organisations recognise its value and commit to applying it, but many find it difficult to achieve full maturity against all eight measures,” says Ramachandran.

It appears that in the Medibank and MyDeal attacks, data was accessed by unauthorised users using “compromised” or through stolen credentials. This suggests multifactor authentication was not implemented, or the hackers found ways to bypass these protections, perhaps by accessing the details of a contractor or supplier with access to systems.

Nine years ago, US retailer Target’s point-of-sale systems were breached when the user account of an air-conditioning mechanic was compromised. The attackers used his account to work their way through other systems, eventually stealing customer credit card details.

Many retailers rushed to digitise and enable employees and suppliers to work from home and access their systems remotely during the pandemic, opening up more potential points of attack.

“Supply chain security is really hard one – it’s hard enough for organisations to understand their own organisation’s security and fix it, now they have to think about the suppliers they’re using as well,” says Ramachandran.

Experts say multifactor authentication is crucial, but retailers also need to invest in training so employees, contractors and suppliers are aware of risks such as phishing emails designed to steal passwords and suspicious behaviour, such as staff seeking more access to sensitive information and systems. Retailers should also adopt the concept of least privilege, where individuals only have access to systems they need to do their jobs.

While MyDeal, Medibank, Optus and Vinomofo have attempted to absolve themselves of blame, pointing the finger at cybercriminals, consumers will hold businesses accountable for safeguarding the data they hold and will punish those that fail to protect it.

If the loss of customer trust isn’t punishment enough, hefty remediation and compensation costs, the potential loss of precious customer data and new fines ranging from $50 million to as much as 30 per cent of revenues might prompt retailers to take cybersecurity even more seriously.

Multi-brand fashion retailer Mosaic Brands says sales have increased 64 per cent since the start of this financial year driven by the rebound of in-store shopping.

The group owns labels including Katies, Millers, Noni B, Rivers, Rockmans, Crossroads, Autograph, W Lane, EziBuy and Beme.

In an ASX filing, the business reported in-store comparable sales for the first quarter were registered at 22 per cent, as sales momentum was unimpeded by the impact of Covid-related lockdowns.

“Notwithstanding our strong rebound of in-store shopping, we have seen our online brands, excluding EziBuy, buck this national trend and achieved comparable sales flat to the previous corresponding period or the first quarter.”

Last year, the business agreed to purchase the remaining 49.9 per cent of EziBuy for $11 million. EziBuy is one of the largest multi-channel retailers in Australia and New Zealand, generating approximately NZ$135 million of revenue, of which over 80 per cent is through its digital platform.

“The EziBuy brand has performed in line with its peer pureplay online retailers, with year-to-date sales up 42 per cent.”

The business says it is “well-positioned” for the Christmas trading period and is well-stocked with fresh summer collections in line with expected trade demand.

Japan’s Fast Retailing Co, owner of clothing brand Uniqlo, is expected to post a record annual profit on Thursday as the yen’s slump has boosted the value of its overseas sales even as soaring living costs dampen prospects for retailers.

The company, Japan’s biggest retailer, has posted strong performances in North America and Europe in the first three quarters of the fiscal year that ended in August, but investors will look for signs of a recovery in China, its biggest foreign market with nearly 900 stores.

Operating profit for the fiscal year is expected to rise nearly 17 per cent to 291 billion yen (US$1.99 billion), according to an average of 12 analyst estimates from Refinitiv. Fast Retailing has forecast 290 billion yen.

That would exceed the previous profit record of 263 billion yen in the year ended in August 2019.

For the fourth quarter, analysts expect a 7 per cent drop in profit.

The company, founded by Japan’s richest man, Tadashi Yanai, is a bellwether for global retailers operating in China, the world’s second-biggest economy but where sales and profits have been hurt by strict Covid-19 control measures.

As its Chinese operations slumped, Fast Retailing has put increased focus on North America and expects to turn an annual profit in the region for the first time this year.

But even in the United States and Europe, people are avoiding shopping for clothes, hurting sales at companies including H&M and prompting retailers to slash prices to clear inventory.

“China is continuously failing to live up to the company’s expectations and the only factors holding Uniqlo’s share price from breaking down are the North America growth and the yen depreciation,” LightStream Research analyst Oshadhi Kumarasiri wrote in a report on the Smartkarma platform.

“Those too are now under threat, with a looming recession and Fed rate hikes failing to curb inflation,” he said.

The yen slid to a fresh 24-year low against the dollar on Wednesday. Fast Retailing’s shares are up 18% in 2022, compared with an 8.5 per cent drop in the benchmark Nikkei index.

Yanai, who founded the company and owned about 21 per cent of it as of February, and his family had a net worth of $23.6 billion as of May, according to Forbes.

Seven & I Holdings, another Japanese retailer with a large US footprint, raised its full-year profit forecastlast week, citing the weak yen and strong fuel sales at its convenience stores in North America.

Infant and baby goods retailer Baby Bunting says its first-quarter performance has been “below expectations” in a trading update.

In the year-to-date data to October 7, sales grew 12 per cent, with transactions up by 15.2 per cent.

Comparable-store sales growth was 7.6 per cent while online sales represented 19.6 per cent of overall revenue, compared to 28.6 per cent in the same period last year.

At the company’s annual meeting, Matt Spencer, Baby Bunting’s CEO & MD, said the retailer is currently focused on growing its market share, emphasising on providing “value” in a competitive environment.

“Over the last few years, we have made significant gross margin gains. However, in the first quarter, the gross profit margin was 37.2 per cent, which is down 230 basis points against the first quarter of FY22.

He added the business has suffered “unrecovered cost increases” where input costs have risen faster than retail prices like higher domestic freight charges and foreign exchange movements.

“Given the continuing economic uncertainty, inflationary pressures and other global challenges, we will not be providing any further guidance about FY23 earnings at this time.”

The retailer opened three new stores during the first quarter and anticipates opening another five this year. A Baby Bunting marketplace will be launched in the second half of this year.

Asos, the one-time British poster child for the shift to online fashion retailing, will overhaul its business model after the economic crunch and a string of operational problems hammered its profits.

New CEO José Antonio Ramos Calamonte said that while Asos’s core business in the UK remained strong, returns from its international operations, particularly from the United States, were unsatisfactory and needed to be addressed.

He vowed to re-vamp Asos’s “inefficient” supply chain, find a way to re-engage its 20-something customers, better leverage its data, cut costs and refresh its culture.

“The plan over the next 12 months is going to be focusing on simplifying the business and making it more resilient and more flexible,” Ramos Calamonte told Reuters.

“We want to be able to deliver more relevant stock and faster to consumers.”

Shares in Asos were up 8.8 per cent at 1138 GMT, as investors welcomed the shift and a new deal with lenders, paring 2022 losses to 78 per cent.

Asos and rival Boohoo grew rapidly as young customers around the world snapped up their fast fashions, and demand surged again during the coronavirus pandemic when high street rivals were closed.

But supply chain issues, increased competition and the sharp downturn in the economy have badly affected its business model. The perennial problem of managing customer returns has also weighed on the business.

Ramos Calamonte said he was committed to free returns.

Boohoo, which does charge for returns, warned on the outlook last month.

ASOS made adjusted pretax profit of 22 million pounds (US$24.9 million) in the year to Aug. 31, in line with guidance that was lowered last month and down from the pandemic boosted 193.6 million pounds made in 2020-21.

It forecast a first half loss as it cuts prices to clear old stock, requiring a non-cash write-off of up to 130 million pounds. Some 40 million pounds of other restructuring charges will also be booked.

In the second half, ASOS will begin to operate with lower stock levels as lead times on orders and deliveries are reduced. It would also benefit from reduced freight rates and cost cuts.

ASOS did not give profit guidance for the full year. Prior to the update, analysts on average were forecasting an adjusted pretax profit of 61 million pounds.

It said while trading was volatile, September had showed a slight improvement relative to August.

Ramos Calamonte said that with cash and facilities of more than 650 million pounds, ASOS had ample room to manoeuvre and did not need another equity raise.

Capital expenditure for 2022-23 was guided at 175-200 million pounds, down from 200-250 million pounds, with the phasing of automation projects under review.

The CEO said he was not concerned by the threat of a takeover bid and did not obsess over the share price.

Steve Madden is preparing for future growth through new category launches and concept stores in Australia according to Signal Brands, the licensee for Steve Madden in Australia.

Speaking with Ragtrader, Signal Brands marketing and PR manager Casey Pascoe-Webbe said extending Steve Madden’s category offering in the country is the “number one” priority. This is followed by growing its wholesale partners and opening “more and more” doors.

Currently, Steve Madden sells footwear and handbags with Signal Brands Australia.

"Each brand at Signal Brands Australia - Steve Madden, Guess and Nine West - have their own team that follows international guidelines for each brand,” Pascoe-Webbe said.

"In the case of Steve Madden, our product range will be extended towards the end of the year to include hats, watches and eyewear.”

According to Pascoe-Webbe, the eyewear range is pending Australian regulation sign off.

As the licensee for Steve Madden in Australia, Signal Brands operates Steve Madden and Madden girl labels. Pascoe-Webbe said that it also works on Dolce Vita “from time to time” for its wholesale partners.

She also noted that Steve Madden harnesses three core customer demographics: an “on-trend girl”, a “pump girl” and a “sneaker girl”.

According to Pascoe-Webbe, Steve Madden’s online market in Australia “generally hits that on-trend girl” as she is likely to wear boots all year round.

In regard to the price points of its Steve Madden range, particularly online, Pascoe-Webbe said there is a gradual curve upwards “for all the usual reasons.”

“I guess the customer can tolerate those increases though - because the brand personality and the cutting edge styling of Steve Madden footwear, in particular, always wins out with that customer.

“The Signal Brands Australia/Steve Madden website has always been a leading online channel for Steve Madden.

“We're driven really heavily by our socials - we invest really heavily in our online marketing as well - but our social and organic following is really real.

“That's where we see a lot of our growth coming from.”

As well as focusing on new categories, Pascoe-Webbe said the brand is also expanding its physical footprint.

Recently, Steve Madden opened a new concept store in Doncaster, Victoria, with another on the way for Shellharbour in NSW in November.

The new concept for these stores are seen in its “elevated finishes,” while still retaining the Steve Madden brand identity, Pascoe-Webbe said.

“So it's a mixture - or fusion - of different substrates. We've got metals, backward terrazzo; backs with iridescent walls, really large LED screens, and neons that talk about the brand personality.”

Currently, Steve Madden has six standalone stores across Australia, and a “handful” of factory stores as well. This includes a new outlet opening in Canberra. Its products are also stocked in David Jones, Myer, The Iconic, and "a number of" chain store streetwear retailers.

“So it's very much around the footprint of the store,” Pascoe-Webbe explained, “from the owned retail channel perspective.”

“Signal Brands is on quite an aggressive store opening growth strategy on a whole, actually.”

As well as new locally opened stores, Steve Madden is also preparing to launch another in Dubai Mall in the UAE “in the coming months.” It will be the same concept as those launched in Sydney and Melbourne.

“The Dubai Mall store is unrelated to the Signal Brands Australia operation, although we all are custodians of the Steve Madden brand,” Pascoe-Webbe said. “But it really takes that whole elevated, but still on-brand, experience that one step further.

“They've got chainmail walls, full iridescent walls, stadium style revolving LEDs. So globally, we're really excited to be right on the forefront of what's happening with the brand.”

“We're really thankful at Signal Brands Australia that it has continued to trade really strongly throughout.”

The Myer board led by JoAnne Stephenson has challenged Solomon Lew’s Premier Investments to make a full takeover for the retail company instead of creeping up its share register.

The board also declined to back the appointment of Terry McCartney, the billionaire’s long-time lieutenant, to the department store as a non-executive director.

In a tense exchange of letters before the November 10 annual general meeting, Premier Investments did not agree to Myer’s plea to stop buying shares unless a full takeover offer were made; it called the request “surprising and inappropriate”.

Mr Lew has been a thorn in Myer’s side on and off since the 1990s. His Premier Investments has been buying the maximum allowed – 3 per cent every six months – and has doubled its stake to 22.87 per cent from 10.77 per cent in July 2021.

Mr McCartney is a non-executive director of Premier and its wholly owned subsidiary, Just Group. He joined the Just Group board in 2008.

In August Myer said Mr Lew was seeking a board seat in his target. Mr Lew declined to comment on Monday.

On Monday, Myer revealed in its AGM notice to shareholders that it had written to Premier on September 7, raising concerns about a conflict of interest and possible sharing of confidential information.

Premier responded on September 20 that if Mr McCartney were to join Myer’s board, it had no expectation he would share any confidential information with Premier.

Premier declined to comment on Myer’s policy that at all times the majority of the board should be independent directors with an independent chairman.

Premier also did not agree to a standstill on buying shares, labelling the request as “surprising and inappropriate”, Myer’s statement said.

In notes accompanying the AGM notice, Myer said: “The board has therefore not made a recommendation as to whether shareholders vote in favour or against Item 4, being the election of Mr McCartney.”

At 3.40pm AEDT, Myer’s shares traded 0.9 per cent lower at 60¢, about double their 52-week low.

Premier planned to tout Mr McCartney’s retail experience, telling Myer shareholders that since joining the Premier board in 2016, its market capitalisation had increased more than 30 per cent to $3.3 billion as at July 30.

Premier successfully operates a portfolio of well-recognised brands through the Just Group, including Just Jeans, Peter Alexander and Smiggle.

“During this time, Premier has distributed over $640 million in fully franked dividends to its shareholders. Since 2016, Premier’s net profit after tax has increased over 160 per cent, to $271.8 million for the year ended 31 July 2021,” the Myer statement said.

While Myer’s board has maintained it is open to discuss appropriate board representation of Premier, it said any change of control should not occur without realising the inherent value of Myer for all shareholders.

Ms Stephenson, who is up for re-election and survived a board spill push by Mr Lew a year ago, said in the notice of meeting any Premier-nominated director would be required, along with other board members, to comply with the company’s conflicts of interest policy.

Confidential information restrictions

After receiving the nomination of Mr McCartney, Myer wrote to Premier in September advising that the board would need to be satisfied that existing and potential commercial conflicts of interest would be managed appropriately. There would also need to be restrictions on the disclosure and use by Mr McCartney of Myer’s confidential information.

Myer said it had no objection to Mr McCartney’s election as a director based solely on his credentials, and would be willing to work with him. However, since Premier would not agree to two significant points in its letter, the matter should be determined by the shareholders.

Ms Stephenson said Myer’s fortunes had turned, pointing to its recent full-year results. The company said in mid-September it had posted its best sales start to a new financial year since 2006 and tipped strong Christmas trade.

“Myer’s FY22 results reflect a stronger and more agile business that continues to gain momentum as we deliver against the Customer First Plan,” she said.

The board also recommended that shareholders re-elect independent non-executive director Jacquie Naylor; adopt the remuneration report; and grant performance rights to chief executive John King.

Ms Stephenson has been a Myer board member since 2016 but was acting chairman from October to September 2021, when she became chairman. Myer’s annual meeting is due to take place on November 10 at 2pm in Sydney.

Mr Lew was unsuccessful in ousting part of the board after Myer received a “second strike” against its remuneration report at its annual meeting last year.

It is not the first time Mr Lew has sought to install Mr McCartney to Myer’s board. The billionaire retailer put up the former managing director of Myer Grace Bros, as well as Steven Sewell and former UBS banker Tim Antonie in 2017 to then Myer chairman Paul McClintock, but it was never put to a shareholder vote.