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Myer has reported a 3% decline in total sales for the first half of FY24 to $1.8 billion.

Myer now expects first half net profit after tax (NPAT) to be between $49 million and $53 million, which is down from $65 million reported the same time last year.

The NPAT guidance includes the impact of store closures and inflationary cost pressures.

Myer’s group online sales are expected to be $390.1 million, an increase of 2% on the first half of FY23 and representing 21.3% of total sales. 

The group’s comparable sales are up 0.1% on the prior corresponding period.

Myer CEO John King said the sector is navigating a number of economic hurdles. 

“Like many retailers, we have had to contend with inflationary pressures and greater promotional cadence, which has had an impact on profits,” King said.

“Our focus remains on seeking to drive further and sustainable cost efficiencies and inventory management. 

“We expect the consumer to remain cautious in the second half of FY24 but believe we remain well positioned with the strength of our leading loyalty program, our national distribution centre starting to scale and the continued roll out of successful brand extensions and new additions.”

The total inventory at Myer is expected to be lower than the same time last year.

Myer anticipates releasing its complete first half results during March 2024, following the completion of financial close procedures, board approval and completion of the half year review by the company’s auditors. 

The board is also continuing its search for a new chief executive officer and expects to update the market on progress in due course. 

Short sellers are under pressure after better-than-expected results from discount jewellery retailer Lovisa Holdings sent the stock soaring to all-time highs this morning.

The retail chain, which is backed by billionaire Brett Blundy, posted sales growth of 18.2 per cent to $373 million in the first half, underpinned by growth in its global store network, topping market expectations. Lovisa posted a 12 per cent rise in net profit to $53.5 million in the 26-week to the end of December.

Shares rallied 10 per cent following the result, pushing the stock above $27 apiece for the first time since listing in 2014.

The share rally arrives after sort sellers piled into the stock at the highest level in almost four years ahead of the results. Hedge funds betting against the stock make up about 4 per cent of the share float, the most since 2020, when short positions topped 7 per cent amid sweeping pandemic-induced store closures and a global retail slump.

Shorts against Lovisa started to rise around November when the retailer reported a 6.2 per cent drop in same-store sales during its expansion effort in the US and China. That missed market expectations, fuelling shareholder concerns about chief executive Victor Herrero’s $30 million salary.

Short positions have accelerated in the lead-up to the retailer’s half-year report and now amount to about $100 million – the highest level in dollar terms since the stock listed almost a decade ago.

“Expectations are very high coming into this result,” a local long-short fund manager, who is betting against the stock and was not authorised to speak publicly about the trade, told The Australian Financial Review ahead of the results.

“It’s been priced for perfection,” the fund manager, citing the stock’s historically high share price, mounting global headwinds for retailers and declining same-store sales as the reasons behind the fund’s short bet.

In the half-year report released on Thursday, comparable store sales fell 4.4 per cent compared to a year ago. The retailer’s store rollout program was also slower than expected, as well, with 854 stores as at December 31, behind UBS estimates.

“Some of the new stores may not be achieving the level of economics that the market analysts have been expecting,” the short-seller said.

Analysts had become increasingly divided on the Lovisa stock as the half-year report approached. UBS downgraded Lovisa to neutral last month, noting that the shares had rallied substantially (up 48 per cent) since November and pointing to growing signs that the store rollout was losing steam.

Jarden, which upgraded the stock to a buy in November, has held firm on its valuation, even as its analyst Ed Woodgate cautioned that investors should be “buying for the long term” as there “may be surprises before then”.

“Like every other retailer, Lovisa is facing a tough consumer environment,” he said in a note this month.

“While the trading update may be weak as Lovisa has to cycle one more period of strength and the net store rollout may disappoint, we expect investors will start to look long term once the worst of the bad news is in the rearview.”

Funds are divided, too

Funds also appear similarly divided on the stock. Hyperion, ECP Asset Management and Fidelity are among those holdings large long positions, based on recent filings.

QVG’s Chris Prunty, who counts the stock among the largest holdings in the firm’s long-short fund, is bullish on the outlook.

“We like Lovisa because the return on capital on new stores is very high, and they have a long runway to open stores in existing markets like the US and new ones like China,” he said.

“We understand the market has some concerns around the generosity of the CEO’s remuneration package, but we believe that if he can replicate half the success he had as Zara’s head of APAC, then he will have been underpaid,” he said.

The Lovisa short-seller estimated the stock could slip as much as 30 per cent – should the fund’s thesis behind the short play out.

“What we’ve seen with companies on high multiples in the past is that when you start to see cracks in the business, the market tends to be a bit more forgiving, until the cracks become the crevices,” the short-seller said, citing Domino’s Pizza and Pro Medicus as two stocks to have suffered this fate in recent weeks.

Had Clare Waight Keller possessed more of an ego, she might have been the first female creative director at Gucci.

“When Christopher [Bailey] left, Tom [Ford] and I had a conversation about me stepping up,” says the British designer from her home in London. Gucci’s then creative director offered Waight Keller Bailey’s old role as head of womenswear, widely considered a stepping stone to the top job.

But Waight Keller turned him down. “In the end I said no. I didn’t want to fail. I still felt like I was learning a lot.”

Instead, Waight Keller did things her way, leaving Gucci to becoming artistic director at the cashmere brand Pringle of Scotland in 2005.

“I guess I didn’t have a big ego,” she says of the decision [which, yes, she questioned after the fact]. “I wanted [the job], but I wanted it at the right time.”

Timing has been something of a recurring theme in Waight Keller’s career: she has seemed, somehow, to always be at the right spot at the right time, from landing at Calvin Klein in the early 1990s to now, designing a capsule collection for the Japanese fashion giant Uniqlo.

Bringing her intelligent and classic designs to the mass-market brand, Waight Keller has once again hit on a zeitgeisty intersection: this time, affordability and quality.

The collection, called UNIQLO : C, features a range of seemingly simple, infinitely wearable pieces – trench coats, turtlenecks, quilted jackets, wide-legged pants and combat boots.

Waight Keller, a long-time Uniqlo customer (“I’m a fan since they started with Jil Sander”), was drawn to the opportunity to work with the Japanese brand, and also with another culture. “Japan is an incredible place, and so different from the West. There’s a perfectionist nature but also a sense of respect for technique, craft and the working process. That really appealed to me,” she says.

Though Waight Keller has spent much of her career designing for luxury houses – at Chloé and then at Givenchy, where she designed the Duchess of Sussex’s wedding gown – she says the pace offered by Uniqlo is, somewhat paradoxically, slower than any of the Parisian brands she’s worked for.

“Luxury revolves around shows, and shows happen every three months,” she says speaking over the phone from her home in London. “You are in this very compacted time schedule – there’s a pre-collection, men’s, women’s, couture. You’re working on three seasons at a time, managing all these different teams.”

At Uniqlo, each collection takes six months to create, an almost absurdly luxurious amount of time. “It allows you to explore different fabrics, different techniques. You can finetune ideas. It’s an amazing laboratory.”

This collection – launching this week – is just the first in a series; she is currently at work on the fourth.

Waight Keller is one of the most admired designers of the past two decades. Timing has been on her side, yes, but she has also made a virtue of patience, believing preparation to be the key to success.

“I don’t like to fail,” she says. “I want to be really prepared. I don’t want to be in a position where I can’t deliver. I could observe other people’s mistakes without making them myself.”

The Birmingham-born designer started her career at Calvin Klein at nearly the precise moment a young Kate Moss was hired to be the face of the brand. “She would come in for fittings, and she would sit on the floor reading what looked like schoolbooks,” says Waight Keller. “She seemed so shy and tiny and we’d think, ‘Really, this girl is a model?’ But then you look at her and put her in the clothes and she’s incredible.”

At Ralph Lauren, she learnt the art of conviction from Lauren himself. “I hate to say ‘traditional’, but there was definitely so much of that rooted in what Ralph is all about,” she says. “It’s so underrated but it’s part of what has made his empire so incredible and given it longevity.”

It was an “amazing thing to observe,” she says. Most designers yield to trends in one way or another, she adds, but “he’s not interested”.

Timing was her friend at Gucci, too, under the masterful direction of Tom Ford, who was tasked with revitalising the once-sleepy brand in the 1990s. During Ford’s enormously successful reign, Gucci was “all about sex,” says Waight Keller.

“It wasn’t very me,” she admits, “but I learnt so much just by being there.”

When Waight Keller became artistic director at Givenchy (the first woman to do so at the brand), she was part of a wave of young female designers taking on the top jobs at storied maisons: Phoebe Philo as creative director of Celine in 2008, Sarah Burton at Alexander McQueen in 2010, Maria Grazia Chiuri at Dior (2016), Virginie Viard at Chanel (2019), Gabriela Hearst at Chloé (late 2020). Now, only Chiuri and Viard remain.

“It’s disappointing,” Waight Keller says plainly. “I really believe women bring so much to the industry. I find it unfortunate that so many women work at lower ranks of the industry. At most of the companies I worked for, 70 to 80 per cent of the workforce was women, but the top 20 per cent was almost always men.

“That’s really difficult to fathom at this point. That we should still be talking about inequality in what is essentially a women’s business… I can’t really get my head around that.”

For Waight Keller, the Uniqlo collection will mark the second-most public outing she has had as a designer. In 2018, when she had just taken on the role of artistic director at Givenchy, a new client came to her: Meghan Markle, soon to be the Duchess of Sussex. It was, she says, “a once-in-a-lifetime opportunity”.

“As a British person it was a huge, incredible honour,” she says. “It was done in secrecy and it was a monumental thing when I was still very new.” She won’t divulge more, citing Chatham House rules, but adds that the social media impact was “mind-blowing”.

Though Uniqlo audiences are vastly different to the couture clients she worked with at Givenchy, the brief is much the same.

“I brought back couture to Givenchy because I really felt that it would give the creativity and the burst of ideas that would help filter through the rest of the collections,” she says. “And honestly, I feel that way at Uniqlo.

“Couture at Givenchy was one of the happiest places I have ever worked because it was a small and very skilled group of people, where you could be free and play.”

Somewhat bizarrely, she says Uniqlo is similar.

“All the prototypes come 80 to 90 per cent perfect,” she says. “There is a cultural pride in everything they do. They never present anything unless it’s the best they can make it. This price point is a very different parameter to work in, but there is one designer there who says to me, ‘If it’s 99 per cent there, we still push for the one per cent.’”

The 2024 Australian Retail Outlook is out now. This must-read resource is packed with exclusive insights from Inside Retail’s survey of retailers about their performance, plans and predictions for the year ahead; trend analyses and advice from industry experts; and interviews with leading retailers, including Ikea, Lush, Outland Denim, Milligram, and many more, about their growth strategies in 2024 and beyond.

To give you a glimpse of what you can expect from this year’s report, we are sharing selected articles over the coming weeks. Be sure to download the 2024 Australian Retail Outlook to discover more.

Angus McKay, CEO & managing director, 7-Eleven 

KPMG: What do you see as the greatest challenge to Australian retail in the year ahead? Is this a new challenge vs prior years?

Angus McKay: One of the challenges that will continue into next year is being able to demonstrate value to our customers. There’s no doubt customers are becoming more price-sensitive, so as a retailer, we have to make sure that our customers see that we are providing value.

That can come in the form of special offers, co-buy promotions or rewards for loyalty. The search for value is no better demonstrated than by the uptake of the Fuel Price Lock feature of our My 7-Eleven app, which has just had a 27 per cent year-on-year increase of users. In this case, the extra value for the customer comes when they link the app to Velocity Frequent Flyer rewards.

KPMG: What is a key investment area or opportunity for retail to thrive in over the next two to five years?

AM: There are two areas where we will continue to invest over the medium term – digital enablement and sustainability. 

On digital, we want to make things easier for our customers to play with us. We don’t want to create clutter and noise, we aim for quality over quantity. This means we must be smart about how we interact with our customers. The key will be to use data with precision so what you offer them matches customer needs and wants. 

In the sustainability space, work will continue around packaging and recycling, along with the sustainability of some ingredients in our own branded products.

John Gualtieri, CEO, Kmart and Target ANZ

KPMG: What do you see as the greatest challenge to Australian retail in the year ahead? Is this a new challenge vs prior years? 

John Gualtieri: In the current economic climate, with its high cost-of-living pressures, many Australian households are feeling significant pressures on their income. Value imperative is a growing influence on customer behaviour and will continue to be a driver in our industry for some time.

Retail has always needed to adapt to the evolving needs of consumers. While value is of increasing importance, it’s also becoming apparent that consumers expect retail to deliver access to great products at great prices.

This shift in consumer mindset expectations presents a significant opportunity and challenge for retail brands in Australia. For Kmart and Target, this trend aligns naturally with our ethos as a business. 

As an Australian, design-based product development company of our size and scale of operations, we deliver the lowest-cost product development, production and distribution model, which means we can continue to consistently deliver better products at lower prices. 

With our size also comes a responsibility to make a positive contribution towards a sustainable future. The retail industry’s focus on sustainability will continue to be a key priority that we take on collectively.

Waste is a huge challenge, and one that we need to develop a collective and sustainable response towards as an entire industry. This next phase will require an unparalleled level of partnership within the retail sector – from suppliers to customers as well as peer retailers, global sustainability partners and governments – to develop a solution at scale that is fit for purpose and delivers sustainable solutions to the problem. 

KPMG: What is a key investment area or opportunity for retail to thrive in over the next two to five years?

JG: Data will continue to be a key investment for retail and will help us unlock new levels of value creation – that will ultimately benefit consumers.

Data can deliver efficiencies in operations, but the real value is in using it carefully to drive growth and deliver an augmented customer experience through things like enhanced design capability, product availability and personalisation, as well as automation that drives better efficiencies, and ultimately a better customer experience as a result. 

The recent establishment of our distribution centre in New Zealand with automated product sorters and an automated inventory management system highlights the efficiency gains that are possible. These advancements liberate our team members from time-consuming manual tasks.

AI stands before us as another seismic shift for our sector, the potential of which we are only beginning to understand. The introduction of our AI-powered live Chatterbot marks the beginning of a new journey in this space. This tool is engineered to engage in end-to-end conversations with our customers, leading to an enhanced customer experience.

Scott Fyfe, CEO, David Jones

KPMG: What do you see as the greatest challenge to Australian retail in the year ahead? Is this a new challenge vs prior years? 

Scott Fyfe: In 2024, the economic headwinds facing Australian retail are likely to be onerous. Inflationary pressures will continue to impact consumer behaviours and whilst these challenges aren’t entirely new, their interconnected nature demands a heightened level of strategic agility and innovation from retailers to propel them forward.

KPMG: What is a key investment area or opportunity for retail to thrive in over the next two to five years? 

SF: Seamlessly integrating innovation across the value chain and crafting unforgettable customer journeys will be the currency of success. This will propel retail businesses beyond transactional exchanges, into a future of lasting connections and sustainable growth.

Daniel Bracken, CEO, Michael Hill

KPMG: What do you see as the greatest challenge to Australian retail in the year ahead? Is this a new challenge vs prior years? 

Daniel Bracken: For the next six to 12 months, the biggest challenge for retail will no doubt be a low level of consumer confidence, driven by high-interest rates and economic concerns. Add to this the challenge of increasing operating costs from labour, occupancy and COGS.

KPMG: What is a key investment area or opportunity for retail to thrive in over the next two to five years? 

DB: Retailers need to continue to invest in digital, data and customer insights. But also physical in-store environments need to keep pace with the expectations of customers.

Assaulting a retail worker in Western Australia could attract a jail term of up to seven years under proposed legislation, bringing the state in line with tough penalties in NSW, South Australia and the Northern Territory.

Under the proposed laws the maximum penalty for assaulting retail workers will be seven years imprisonment or three years and a fine of $36,000 if dealt with summarily.

Under the change the maximum penalty increases from 18 months imprisonment and a fine of $18,000.

Labor is seeking to curb increased rates of violence against retail workers which records show have doubled over the past two years.

Labor is seeking to curb increased rates of violence against retail workers which records show have doubled over the past two years.

"All retail workers, whether they're a casual in their first job or doing the night shift at the local convenience store, have a right to feel safe at work," Mr Zahra said.

"No one deserves to be spat on, threatened with weapons, intimidated or harassed for simply doing their job. People who engage in these types of behaviours are committing a crime - it's a simple as that. "

The chief executive of Wesfarmers says high inflation will see shoppers continue to look for value after Kmart’s budget home brand Anko boosted the retail conglomerate’s half-year profits.

Wesfarmers boss Rob Scott said customers’ appetite for more affordable products was prompting the company to try and expand low-price offerings despite “persistent” inflation driving up its wages and payroll tax, as well as costs for electricity, utilities, rent and insurances.

“It’s costing business more to operate. Then that has the risk of blowing through to prices, or at the minimum, stopping prices from coming down,” Scott told this masthead. “If domestic cost pressures stay higher for longer, that is going to continue to place more pressure on households.”

The ASX-listed retail giant, which also owns the Officeworks and Bunnings chains, on Thursday said its net profit rose 3 per cent to $1.4 billion in the six months to December 31, the first half of the financial year.

Overall revenue ticked up 0.5 per cent to $22.7 billion, thanks to Kmart’s 4.8 per cent revenue lift to nearly $6 billion, while sales at catch.com.au and the company’s chemicals and fertiliser division disappointed.

The result beat market expectations, sending Wesfarmers’ shares more than 4 per cent higher.

Kmart’s earnings jumped 26.5 per cent to a record high of $601 million following strong demand for its Anko range (which represents 85 per cent of store products) and women’s and youth clothing.

The discount chain’s beauty and home storage products were also performing well, and helped lure in younger customers. Meanwhile, furniture sales have softened as the lockdown-driven demand to upgrade home furnishings declined.

Kmart boss Ian Bailey, who gave a presentation on the Australian business at a US conference in January, said he was in “half a dozen conversations” with US and European retailers about stocking Anko products, but it was “very early days”.

The discount department store has dropped prices on some 1300 products over the past six months, and said it would keep a focus on reducing its operating costs amid higher inflation, supply-chain costs and staff shortages.

Taking a leaf out of Kmart’s book, Bunnings has also pivoted to focus on private label and affordable product offerings, which resulted in more foot traffic to stores, bigger basket sizes and more items sold in the December half. Its revenues increased 1.7 per cent in the period, with online sales rising 5.1 per cent.

Bunnings’ move to expand its cleaning and pet ranges also won customers eager to save by bulk-buying.

Officeworks’ 1.8 per cent growth in revenue to $1.7 billion in the half was driven by demand for stationery, art and school supplies, and tech products, while sales for office furniture declined.

Scott said the strategy of everyday low pricing at Kmart, Officeworks and Bunnings – rather than the high-low pricing approach of the supermarket giants, which leans on discounts and promotional periods – had resonated with customers, even as they increasingly wait for sales events such as Black Friday.

“Interestingly, we found that our everyday low prices were resonating really well through Black Friday,” Scott said.

Catch.com.au was the most significant drag on Wesfarmers’ result, with revenue slumping nearly 38 per cent as the website slashed unprofitable product lines to focus on higher-demand categories. The online marketplace is expected to be unprofitable for the entire financial year, though losses in the second half are expected to be less than the first half.

WesCEF, the ASX giant’s chemicals, energy and fertiliser business, saw its sales fall by 21 per cent amid volatility in the price of lithium, which has dropped due to oversupply, softer demand from China, and lower US electric vehicle sales.

Wesfarmers will pay a fully franked interim dividend of 91 cents per share, representing a 3.4 per cent uptick on the same time last year.

Looking at the current half, Wesfarmers said Kmart has “continued to deliver strong sales growth” during January and the first week of February, while Bunnings’ and Officeworks’ sales were “broadly in line” with the same period last year.

MST Marquee senior research analyst Craig Woolford described Kmart’s result as “outstanding” and noted that Wesfarmers’ operating cash flow of $2.9 billion, an uptick of 47 per cent, was “very good”.

“Wesfarmers has delivered a good result driven by cost control and Kmart,” he wrote in a note to clients. However, he noted some weakness in revenue from new Bunnings stores.

Analysts from Jarden said the half-year figures were “another quality result”.

Custom blinds and curtains retailer DIYblinds has appointed Peter Mitchley-Hughes as its new CEO.

Prior to the new role, Mitchley-Hughes served as GM of digital and consumer technology at Bunnings and as MD at Country Road Group.

He also held senior leadership roles at Myer, Target Australia, and Marks and Spencer.

“As a customer myself, I admired DIYblinds’ disruptive influence, so much so I could not resist
the opportunity to lead this incredible business where we can utilise new technologies to meet
and exceed our customer’s ever-changing needs,” said Mitchley-Hughes.

In addition, the company has named co-founder Evan Montero as chief growth officer while co-founder Liam Dobson will continue as a director.

The new appointments come as the company scales up and expands its new division HomePro, following the Australian Business Growth Fund positioning as a minority investor in 2022.

Shares in small appliance maker Breville fell more than 10 per cent as investors punished the stock for weaker than expected first-half sales as it sacrificed promotions to preserve margins.

While interim earnings were slightly ahead of consensus, investors were not impressed. The stock fell $2.97, or 10.87 per cent, to $24.35.

Group revenue rose 2 per cent to $905.8 million or about 5 per cent below consensus estimates of $955.1 million. Earnings before interest and tax gained 8 per cent to $131 million, about 2 per cent ahead of broker forecasts. Net profit advanced 6.7 per cent to $84 million.

Chief executive Jim Clayton indicated to investors that the company did not participate as heavily in discounting during the half. Breville was also hurt by the closure of US retailer Bed Bath & Beyond, which filed for bankruptcy in April.

Breville’s food appliances were a drag on revenue growth in a solid half for coffee machines.

Mr Clayton said he expected the subdued economic climate to persist through the second half but hoped to counter that with product launches.

“In this uncertain environment the group will continue to focus on gross profit dollars while continuing to invest for medium-term growth,” Mr Clayton said. “For FY24 we expect to deliver EBIT growth of 5 per cent to 7.5 per cent,” he said.

Barrenjoey analyst Tom Kierath said while the inventory unwind and net debt reduction to $97.5 million at balance date was positive, he still called the results “slightly disappointing given the revenue miss”.

Jarden analyst Ben Gilbert highlighted the attention on gross margin: “Breville look to have stepped away from low margin sales and have flagged a strong new product development pipeline and improving working capital.”

Mr Gilbert said forecast EBIT growth was in line with expectations of 7 per cent, putting the emphasis on the top-line recovery.

Breville’s major shareholder is Solomon Lew’s Premier Investments, which controls 25.6 per cent of the group.

An interim dividend of 16¢ per share was declared, up from 15¢, to be paid on March 28.

JB Hi-Fi boss Terry Smart says the stage three tax cuts and the apparent peak in the Reserve Bank of Australia’s cash rate will provide relief for retailers which are fighting it out for sales to counter a broader slowdown in spending.

The retailer, whose shares reset a record high on Monday of $60.58, up more than 7 per cent, vowed to keep improving productivity given the rising bills it faces from wages, Victorian payroll taxes and utilities.

JB’s Hi-Fi’s low-cost operating model helped it to a better-than-expected first-half result. A lesser reliance on casuals for rostering in stores and its ability to bulk-buy from suppliers underwrote competitive shelf prices and tech deals.

The company beat forecasts delivering first-half sales of $5.16 billion, and achieving a smaller-than-anticipated top-line decline of 2.2 per cent. Interim net profit fell nearly 20 per cent to $264.3 million, also better than feared.

The second half started on solid footing, with January salesat JB Hi-Fi Australia up 2.5 per cent, or, on a comparable basis, growth was 1.7 per cent higher last month. JB Hi-Fi New Zealand sales grew 8.2 per cent, but fell 4.1 per cent on the comparable sales measure. Turnover at The Good Guys fell 2.2 per cent last month, with same-store sales down the same amount.

Mr Smart called the environment “challenging” but argued the major categories the group trades in are “necessities” and not discretionary items. The group is also capitalising on the tech replacement cycle for items like laptops.

While JB Hi-Fi will have an easier time cycling second-half performance, Mr Smart said the economy was the source of encouraging news on inflation, pending tax cuts and the apparent stabilisation of interest rates.

“Anything that can help improve consumer confidence will be beneficial to us so, we hope that all the good economic news continues,” he told The Australian Financial Review.

JB Hi-Fi is the latest retailer to keep the soft landing alive after Nick Scali, Myer and Cettire smashed bombed out expectations last week.

First-half earnings before interest and tax (EBIT) reached $386.7 million, topping consensus estimates for a 24.2 per cent fall to $363 million.

Mr Smart underlined the focus on costs, striking a tricky balance as JB Hi-Fi strives for effective customer service to bank sales, while keeping wages under control. As shoppers research prices more online, this creates faster transactions in-store, boosting staff productivity, Mr Smart said.

“We just have to get staff (in store) right as it has such a big influence on the whole cost base, so anything else we do would just be around the edges,” he said. “We are always very considered before putting new roles into the corporate office, so there’s not a lot that we could do there.”

Cost of doing business represented 11.9 per cent of sales, up from 11.4 per cent in the prior half.

Discounting dents margins

Sales at the more than 220 JB Hi-Fi stores in Australia were up just 0.7 per cent to $3.62 billion in the period, with comparable sales virtually flat. Higher discounting dented its gross margin, which fell 84 basis points to 22 per cent.

EBIT in the Australian electronics business fell 13.7 per cent to $294.6 million.

Mr Smart said inventory availability had improved in key categories like PS5, Xbox and small appliances, with its stock position 3.9 per cent lower to $1.16 billion at balance date.

Sales at JB Hi-Fi NZ increased 5.1 per cent to $NZ168.7 million ($159 million), while sales fell by 9.9 per cent to $1.39 billion at The Good Guys.

Mr Smart said The Good Guys has a dominant position with families and first time homebuyers, where margins held up as it sold more mobile plans, and achieved good growth in large and small appliances and flooring.

The group did not provide any full-year earnings guidance, but many analysts expect upgrades. Barrenjoey analyst Tom Kierath said the January update was solid, with the company evidently managing costs tightly.

“They had a bit less labour in store than they would like in The Good Guys. So it seems like they ran it pretty lean,” he said.

“JB is not doing anything new, it is just a well managed business. There is not a lot of fat to cut. The additional research by customers means people are coming in store and just buying – there is no haggling. If that trend continues, then that definitely helps them from the labour cost side.”

Based on Mr Kierath’s numbers, labour costs in Australia are up 6.5 per cent an hour on average.

JB Hi-Fi chief financial officer Nick Wells downplayed a class action it was defending in the Supreme Court of Victoria relating to the sale of extended warranties in JB Hi-Fi Australia. No provision was taken related to the dispute.

“We firmly believe that we haven’t done anything wrong, and we take our legal obligation very seriously,” he said.

Nick Scali shares rallied to a two-year high after the furniture retailer reported growth in its order book last month, and Myer advanced on better-than-expected sales, countering the doom that has encircled households leading up to the peak of the interest rate cycle.

Chief executive Anthony Scali said foot traffic was up in most states where Nick Scali trades over the past few months, indicating consumer sentiment may be more positive.

Consumer confidence will get a further boost if shoppers believe that interest rates have stabilised, he said. He is also betting that the Labor government’s tax cuts will help consumption, and housing indicators are improving, too.

“I think the tax cuts and rate cuts will certainly help consumer confidence. That could be good for our business being in retail,” Mr Scali told The Australian Financial Review.

Nick Scali shares rocketed up 16.5 per cent to $14 each after it exceeded first-half profit guidance, posting a 29 per cent fall to $43 million in the six months to December 31, topping its forecast of $40 million to $42 million. Interim sales fell 20.2 per cent to $226.6 million and gross margin was robust at 65.6 per cent.

Mr Scali said other retailers would be watching the RBA, which kept the cash rate on hold at 4.35 per cent on Tuesday but retained its tightening bias, saying more rate rises may be necessary.

“We are definitely positive on sectors exposed to the economy coming into this reporting season as we believe that analyst forecasts are too low and valuations are attractive,” WAM Capital lead small caps portfolio manager Oscar Oberg said.

Shares in department store Myer gained 14.29 per cent to 76¢ on Tuesday, after its sales update proved better than feared. Myer forecast interim sales down 3 per cent $1.829 billion, or flat on a same-store basis. First-half net profit for the 26 weeks ended January 27 will be $49 million-$53 million, albeit dented by more discounting and inflationary cost pressures.

“If people believe that interest rates have peaked, I think that should help consumer sentiment because they know where they are in terms of what they can afford to buy spend,” Mr Scali said. Month-to-month store visit trends have improved, with traffic up 10 per cent in November and December, and up 4 per cent in January – the biggest sales month of the year.

Mr Scali said written orders were “solid” for the half at $212.7 million, up 1.1 per cent on the prior corresponding period; like-for-like orders were flat. Booked orders across both the Nick Scali and Plush brands in the second quarter were 8.2 per cent higher than a year ago, with November and December trading particularly strong.

The positive momentum continued into January when Nick Scali booked $58.9 million in orders, up 3.6 per cent on a year ago, and same-store sales up 2.6 per cent. Mr Scali said January was driven by volume growth with the average selling price down 6 per cent to 7 per cent.

Nick Scali declared a flat fully franked interim dividend of 35¢ a share, payable on March 26.

The company needs to fast track a planned store roll-out, the CEO said, noting site availability for Nick Scali was proving more difficult and rents were holding back the expansion of the Plush business. It has 64 Nick Scali stores and 44 Plush sites. Long-term, it aims to have 86 Nick Scali stores and 90 to 100 Plush stores in Australia and New Zealand.

The untangling of the freight situation is helping after the DP World strike was resolved, ending months of industrial action congesting ports.

“My sense is the ships will come back, which they will, and the supply will increase, and therefore there shouldn’t be too much pressure on lines,” Mr Scali said.

Jarden analysts said Nick Scali’s result was strong in a tough market, while Citi analysts argued the better-than-expected interim profit should be positive for investor sentiment.

WAM’s Mr Oberg said consumer-facing stocks have trailed the recovery seen in other sectors over the past six months, and the market was positioned much too bearish.

“The expectations in the market from the analysts covering both of those companies were factoring in negative outcomes around sales and gross margins. Things have turned out through October, November, December to be a lot better than people expected,” he said.

Further, Mr Oberg said Myer’s sales update was a tremendous result in the circumstances: “To get a flat top line result and then to see it improve through November, December versus their AGM update was really strong. That bodes well for the remainder of the year,” he said.

“Myer is still generating well over $50 million in profit, has minimal debt and is paying very strong dividends. It’s on a very low valuation, so it just feels like a matter of time before the market wakes up.”

Myer is looking for a new CEO to succeed John King, whose planned exit is in June.

Pressure is mounting on the Myer board led by new chairman Ari Mervis to recruit a chief executive after the department store missed out on hiring veteran retailer Mark McInnes as outgoing CEO John King’s successor.

Mr King is planning to exit the company in early June, having flagged his plans to depart last year and reunite with his family overseas. Mr King has helped turn around the department store chain over the past six years against a tough consumer backdrop.

Former Myer chairwoman JoAnne Stephenson, who was succeeded by Mr Mervis after the November AGM, said at the time the board was well-advanced in the search for Mr King’s replacement, with “interesting candidates both locally and internationally”.

Indeed, it was in advanced discussions with Mr McInnes about taking the top job at Myer, but they were unable to reach final terms. A Myer spokesman said there are no updates in relation to its CEO’s departure date or CEO candidates.

Last week, billionaire retailer Brett Blundy – founder of private investment company BBRC which owns stakes in listed retailers Lovisa, Accent Group, Best & Less and Victoria’s Secret – hired Mr McInnes as the global head of his retail and consumer business.

Mr McInnes spent a decade as CEO of Solomon Lew’s Premier Investments retail operations and before that, David Jones. He declined to comment.

The billionaire Mr Lew controls nearly 29 per cent of Myer, and has been creeping up the register every six months.

David Jones, now owned by Anchorage Capital, also approached Mr McInnes, as did private equity firm BGH Capital.

Myer has hired executive search firm Egon Zehnder.

Myer’s CEO wish list is speculated to include Macy’s’ outgoing CEO Jeff Gennette, who is retiring from the US giant in February. However, after 40 years with Macy’s, and given the smaller size of Myer, it may be a stretch to lure the US executive to Melbourne despite him being acquainted with Mr Lew.

Internally, executive general manager of stores, Tony Sutton, is highly regarded. He joined Myer in 1992 and has worked in a number of senior roles, and been on the executive management team since 2013 where he oversees the operations of the network nationally.

Chief financial officer Nigel Chadwick is retiring today, and will be succeeded by deputy CFO Matt Jackman.

Myer’s shares are trading around 68¢, down about 30 per cent over the past year, but above where they were since Mr King took over the top job in 2018 when the stock was sitting at around 40¢ and the retailer was on its knees.

He quickly established his customer first plan, shrinking floor space and closing stores, and helping transition Myer into a profitable business that has returned to paying regular dividends.

Myer operates 56 department stores and its online presence, which now represents more than 20 per cent of total sales of $3.36 billion in fiscal 2023. Mr King also grew its loyalty program, Myer one, which has more than seven million members.

Pandora has shifted to using recycled silver and gold for all of its jewellery, a move it said will avoid significant greenhouse gas emissions.

The new strategy aims to reduce 58,000 tons of carbon dioxide every year. According to the company, the carbon footprint of recycled silver is one-third compared to mined silver, while recycling gold emits less than 1 per cent of the carbon emissions from mining new gold.

The target was previously set for 2025 but has been achieved early thanks to the strong commitment from the firm’s suppliers.

Suppliers have had to switch their operations to only source materials that are certified recycled according to the Responsible Jewelry Council Chain of Custody. 

Pandora currently produces its jewellery with 97 per cent recycled silver and gold and is expected to increase to 100 per cent from this year’s second half.

“Precious metals can be recycled forever without any loss of quality. Silver originally mined centuries ago is just as good as new, and improved recycling can significantly reduce the climate footprint of the jewellery industry,” said CEO Alexander Lacik.  

The Copenhagen-based company sells its products in more than 100 countries through more than 6500 points of sale, including some 2500 concept stores.

The company surprised investors with the announcement that H&M brand head Daniel Ervér will takeover from outgoing chief Helena Helmersson.

H&M’s CEO unexpectedly quit on Wednesday and company veteran Daniel Ervér took over with immediate effect, as the Swedish fashion retailer struggles to boost sales and profitability.

Shares in the Swedish fashion retailer dropped 8 percent as outgoing CEO Helena Helmersson said she had decided to leave the company after four years in the top job, adding the role has been “very demanding” and telling journalists she did not have the energy to continue.

The leadership change came as H&M said sales for December and January fell by 4 percent compared to the previous year, a bad sign for the key Christmas shopping period.

The world’s second-biggest listed fashion retailer after Inditex, H&M has struggled to compete with Zara and low-priced fast fashion giant Shein, both of which have seen strong sales growth.

“I think the market will welcome the change after digesting the numbers,” said Adil Shah, portfolio manager at Storebrand in Oslo, which holds H&M shares.

“Speculation that margin targets will not be met is one of the reasons being stated for the CEO change,” he added.

H&M has focused on profitability rather than sales volumes recently as it aims to reach a 10 percent operating margin this year.

Ervér, 42, has been at H&M for 18 years, most recently as head of the retailer’s core H&M brand, a role he will keep alongside the CEO job.

“We think there’s a lot that needs to be done or could be done to turn around this business, and the question is whether or not a person who’s been there for 18 years is the right person, or even has the mandate to take those steps,” said Bernstein analyst William Woods.

H&M’s fourth-quarter operating profit margin fell to 7.2 percent from 7.8 percent in the third quarter. Having previously said its goal was 10 percent, the company on Wednesday called it an “ambition”.

Measured in local currencies, sales from Dec. 1 to Jan. 29 - the start of its fiscal first quarter - fell by 4 percent, compared to an increase of 5 percent in the same period last year. Sales over the fourth quarter had also fallen 4 percent, more than the market expected.

Fourth-quarter operating profit was 4.33 billion crowns ($415.4 million), up from 821 million a year earlier but below the 4.57 billion expected by analysts in an LSEG poll.

JPMorgan analysts said the results were disappointing, and that the weakness of H&M’s fourth-quarter profit “slightly reduces (the) credibility” of the 10 percent margin target.

Karl-Johan Persson, H&M chairman and grandson of the founder Erling Persson, said the company is in a strong position with “good conditions to make further improvements” this year.

The shares were down 8 percent at 154 Swedish krone by 0840 GMT having risen about 29 percent in the last 12 months.

Australian retail billionaire Brett Blundy has recruited Mark McInnes for the newly created role of global chief executive of retail and consumer at investment firm BBRC. 

McInnes will start his new position on February 26, two years after he stepped down as . He has been on paid ‘gardening leave’ since he departed from that company.

With the ‘golden handcuffs’ coming off on January 16, McInnes had been in discussions with potential employers, according to the Australian Financial Review (AFR).

McInnes told the AFR that Blundy’s experience, balance sheet capacity and ambition in the retail sector was particularly attractive.

“Brett actually wants significant growth in both the public and private retail and consumer market. I think the fact that he’s a retailer and I’m a retailer … I think we’ll make a great team.”

BBRC holds Blundy’s investments across a range of sectors, including its holdings in listed retailers Adairs, Lovisa, Accent Group and Universal Stores, as well as discount clothing chain Best & Less.

Anthony Albanese has revealed the consumer watchdog will conduct a 12-month price inquiry into the supermarket industry — which is under pressure over price gouging — as he begins selling the government’s revamped stage three tax cuts by declaring they will help millions of women, part-time workers, young people and renters.

The Prime Minister, who is under pressure to deliver more cost-of-living relief to struggling Australians, will also announce at the National Press Club on Thursday that his government will fund consumer organisation CHOICE to allow shoppers to compare the price of thousands of products across supermarkets.

Supermarket crackdown

“Today I announce that the Treasurer will be directing the ACCC to conduct a 12-month price inquiry into the supermarket industry. The ACCC has significant powers – and it is the best and most effective body to investigate supermarket prices,” Mr Albanese said.

“To look at how things like online shopping, loyalty programs and changes in technology are impacting competition in the industry. And to examine the difference between the price paid at the farm gate – and the prices people pay at the check-out. For me, it’s this simple. When farmers are selling their product for less, supermarkets should charge Australians less.

Prime Minister Anthony Albanese has announced the Treasurer will be directing the ACCC to conduct a 12 month…

“Today, I also announced that the government will fund consumer organisation CHOICE to provide shoppers with a clear understanding of how supermarkets are performing on this score. Because across thousands of products it can be hard for people to find the best deal. We are backing CHOICE – renowned for their commitment to consumer fairness - to provide clear and regular information on prices across a basket of goods.

“This will promote transparency, enhance competition and drive value. These actions send a very clear message – our government is prepared to take action to make sure that Australians are not paying one dollar more than they should for the things they need.”

Tax cuts sell

After a major backflip on the legislated stage three tax cuts, which has led business leaders to warn tax reform is dead in Australia, Mr Albanese has attempted to win over voters on his planned overhaul by saying the government’s definition of aspiration is “bigger and broader than just the highest income level”.

He referenced the pandemic, saying cost-of-living pressures demanded different tax policy just like the pandemic required a different economic policy through measures such as JobKeeper.

“Our aspiration is inclusive, not exclusive. Because when no-one is held back and no-one is left behind – everyone is lifted up,” Mr Albanese said.

“We know, we’ve had to deal with a global pandemic, a recession, damaged supply chains, conflict in Europe and the Middle East, rapid increases in the price of food and energy and ongoing worldwide economic uncertainty.

“And if we were to simply proceed with the old plan – promoted before any of these challenges even existed it would mean middle Australia missing out on the help they need and they deserve. And it would mean leaving out millions of women, part-time workers, young people and renters, who more than ever, deserve a government that’s on their side.

“For me, our responsibility is clear. This is the right decision, not the easy decision.”

Labor’s plan

Under Labor’s stage three plan, Australians earning $150,000 or more will receive less of a tax cut than they would have under the Coalition’s legislated package.

The top tax bracket of 45 per cent will start at $190,000, down from $200,000 under the Coalition’s package, and the 37 per cent tax rate – which was due to be scrapped from July 1 – will be retained for Australians earning between $135,001 and $190,000.

A flat 30 per cent tax rate will apply to incomes of $45,001 and $135,000, while a tax rate of 16 per cent would apply to the earnings of workers on incomes of $18,201 and $45,000.

“We are choosing a better way forward, given the changed circumstances. We are doing the right thing, for the right reasons. With a plan that delivers a tax cut for every taxpayer,” Mr Albanese said.

“More help for middle Australia. More help for families under pressure with their cost of living. And a better deal for 5.8 million working women. Every woman taxpayer will get a tax cut. And 90 per cent will receive a bigger tax cut, under our plan.”

Antler recorded a 43% increase in international sales for the months of November and December 2023 compared to the previous year, backed by a global rebrand. 

Antler luggage is owned by ATR Holdings, an associated company of Strand in Australia.

Antler’s peak period growth compliments a double-digit growth trajectory over the last two years, ending FY22/FY23 up 427% to £27 million (AU$52.2 million). 

The brand now expects its FY23 to FY24 forecast to hit close to £40 million (AU$77.37 million) with growth of 41% year on year.

It follows a global rebranding by Antler in May 2023, including aesthetics, new logo, alongside partnerships with Soho House and British Fashion Council.

It also comes following the introduction of Strand’s Nere brand into Antler’s United Kingdom market last year.

May 2023 also saw Antler’s first expansion into the US, where demand has steadily grown throughout the year and captured 10% of global ecommerce sales over Christmas.

Antler managing director Kirsty Glenne said the brand is poised to accelerate further growth this year. 

“It’s exciting to see our rebrand strategy coming to life and proving successful with our customers,” Glenne said. “Phase two of our rebrand is the launch of our new collection in April 24, a new retail concept and the continuation of our US growth strategy.”

PLBY Group CEO Ben Kohn has confirmed the company is preparing to sell off Honey Birdette - the Australian lingerie retailer it acquired for USD$333 million in 2021. 

Kohn shared the news at a business conference earlier this month.

“Long-term, Honey Birdette doesn’t belong as part of this company, and at the right time, we will sell it,” Kohn confirmed. “But right now, the business is performing very well. 

“We talked about that in our Q3 results - the month of October - we’ve seen those trends continue, and we’ve also made other operational improvements. But we’re focused on Playboy and really returning that to the experiential lifestyle brand that it was.”

The news comes as Honey Birdette recorded revenue losses throughout 2023. In the third quarter of 2023, the lingerie brand recorded a US$4.1 million loss in sales - or AU$6.23 million. 

It also comes as PLBY Group began consolidating its assets by selling off two of its other subsidiaries - sexual wellness brand Lovers and another lingerie brand Yandy.

Until the commencement of a sale, Kohn said he and the team are re-evaluating opening new stores in 2024 given Honey Birdette’s performance.

“Honey Birdette had a tough first half of the year, but the improvements we’ve made are there,” he said. “We’re seeing the results from it. And at the right time, we will sell a part or all of that asset.”

According to Kohn, when it bought the business back in August of 2021, Honey Birdette had a ton of inventory on order by the previous owner, driving long lead times on inventory. The other key challenge was that, once the deal was signed, many Australian states went back into lockdown.

“And so, in ‘22, we had to discount, because we had to move that inventory out,” Kohn said. “Looking at ‘23, and then moving into 24, we have considerably cut down the number of days that we're on sale, really focusing on improving margin. 

“In Q3 [2023], we announced that we had increased gross margin by 300bps, which is a lot when you look at the overall revenue for the business.”

Kohn said that since then, PLBY Group made other changes to the Honey Birdette business. This includes changing its shipping policies to now charge customers for faster shipping - what Americans call ‘expedited’ shipping.

“Basically, everyone was qualifying - based on the average order size, which in the US is like $280 - for expedited free shipping,” Kohn said. “We've now discontinued that and charge for expedited shipping.”

The company also changed its return policy and put a 10% increase on all prices. 

“As labour has gone up over the past few years, we have not raised prices. And so we just instituted a 10% price increase. Because our tagging is done to the factory, that takes a while to roll in. And so you'll start to see that rolling in now through June of this year.”

According to Kohn, 42% of the brand’s trade comes from Australia, where the bulk of its retail stores are. The United States is the brand’s key market by a small margin, at 45%. Other international trade makes up the rest.

Kohn also revealed that 60% of Honey Birdette’s overall revenue comes from online sales. 

“What is really interesting when you look at the retail footprint - every time we opened a retail store, we actually saw an uplift in e-commerce in that geography,” Kohn said. 

Honey Birdette also sees 30% earnings before interest, tax, depreciation and amortisation (EBITDA) margins for stores, and each new store carries a rough cost of $700,000 to build, according to Kohn.

PLBY Group is a global pleasure and leisure company across media, products and experiences. Its key brand is Playboy, with a large portion of its revenue coming from licensing.

Luxury fashion group Richemont has reported sales growth of 8 per cent to US$6 billion for its third quarter ended December 31, on the back of China’s retail recovery. 

Sales for the nine months ended December 31 surged 11 per cent, primarily driven by Japan, Asia Pacific and the Americas.

Performance in Asia Pacific – where sales jumped 13 per cent – was fuelled by the 25 per cent sales growth of the Mainland China, Hong Kong and Macau businesses, more than offsetting softer performance in other Asian markets. The group posted the sharpest sales growth in Japan with 18 per cent increase in sales during the quarter as domestic and tourist spending, especially from Chinese clients, surged. 

Sales in Europe were 3 per cent lower as higher sales to Chinese and domestic clientele did not compensate for an overall reduction in tourist spending, the company said in a statement. Sales in the Americas were up by 8 per cent during the period. 

All product categories reported increased sales, with the jewellery maisons and specialist watchmakers performing the best, raising their contribution to 71 per cent of group sales. Group online sales fell by 5 per cent. 

Last month, the luxury group said it had scrapped the deal to sell a 47.5 per cent stake in Yoox-Net-a-Poter (YNAP) to Farfetch following the announcement of New York-listed South Korean e-commerce giant Coupang to rescue Farfetch Holdings from the brink of bankruptcy.

Jewellery company Michael Hill has closed six stores, five of those in Australia, and axed senior management roles amid a “challenging period for the business”.

On Friday, the company released its trading update for the 26-week period ending December 31, revealing its sales were negative compared to the first half of 2023.

It said it permanently closed five underperforming Michael Hill stores in Australia and one in Canada between July and October last year.

Of the store closures, one was in regional WA, one in Queensland, one in Victoria and two in NSW.

The update also revealed the company axed “a number of senior management roles”.

The first-half profit in the 26 weeks ending December 1 was expected to be between $30 million to $33 million — down from the $54.5 million reported in the previous corresponding period.

“While the first half was definitely a challenging period for our business with sales for the core Michael Hill brand down, we are encouraged by our performance against the broader jewellery sector,” managing director and CEO of Michael Hill Daniel Bracken said.

“Clearly, margin was under pressure from both input costs and promotional activity, and inflationary forces saw elevated costs across many aspects of the business, which together impacted EBIT (earnings before interest and taxes) for the half.

“Even though consumers continue to monitor their discretionary spend, our multi-brand strategy puts us in a strong position to continue taking market share from our competitors as we expand the Bevilles network and elevate the Michael Hill brand.”

Michael Hill now has 272 stores across Australia, Canada and New Zealand.

Godfreys, one of the country’s largest vacuum cleaner retailers and supplier of specialist floor cleaning products, has collapsed, with more than 50 stores across Australia and New Zealand shuttered and hundreds of jobs on the line.

The specialty retailer’s first store opened in 1931, and the business operated 141 stores with 600 staff before its collapse, with another 28 outlets run by franchisees. But good years have become rare. Adelaide’s Johnston family, the company’s key shareholder, has been funding losses for several years, and finances have worsened considerably since 2022, when the retailer breached its covenant on an overdrawn $31.3 million loan.

The collapse of Godfreys came on the same day official retail figures showed last month there was the largest decline in sales since the start of the COVID-19 pandemic. Sales fell 2.7 per cent in December, more than corrected the 1.6 per cent jump in November retail turnover, when Black Friday sales helped bring forward spending.

Godfreys’ administrators, PwC, will attempt to sell the company. But the restructure, ahead of any sale, will leave an estimated 193 staff out of work, 171 in Australia.

Godfreys was listed on the ASX for four years, floating at $2.75 per share. The company was taken private by one of its original owners, John Johnston, at 33.5¢ per share in 2018. Mr Johnston, who died at 100 only months after the purchase, joined the company in 1936, five years after it opened its first store in Melbourne.

The retailer has faced significant competition from Harvey Norman, JB Hi-Fi’s The Good Guys and online retailers like Kogan.com and Amazon. Meanwhile, Godfreys has continued to sell many old-school vacuum brands, with surging popularity in the Dyson brand, which is not sold by the retailer, hurting the company.

PwC’s Craig Crosbie said that like many retailers, Godfreys has faced a challenging operating environment.

“Lower customer demand amid cost-of-living pressures, higher operating costs, and increased competition have all taken a toll on profitability, with some stores more impacted than others,” he said.

“Our aim is to move quickly to restructure Godfreys to preserve as much of the business and as many jobs as possible. We intend to trade the restructured store network and sell the business and assets as a going concern, with strong interest expected from prospective buyers.”

The Johnston family had already cut the number of Godfreys’ network by around 40 stores since taking the company private in 2018. Mr Johnston and other shareholders had previously sold the business to Pacific Equity Partners and Unitas Capital, which paid $300 million for the company in 2006.

But those private equity firms injected too much debt into the business and, when the global financial crisis hit in 2008, found it difficult to make a return. Mr Johnston and investment bank Nomura bought it back for just $100 million in 2011.

Investec bought a stake a year later, and it floated in 2014.

Jane Allen, Mr Johnston’s daughter, said the collapse of the retailer was disappointing for the family after more than 90 years of operation.

“Sadly, like many retailers, we have been heavily impacted by consumer confidence and spending due to the economic era of high inflation, rising interest rates, and intense cost-of-living pressures. We are also still suffering from the unprecedented business disruptions of the COVID-19 pandemic,” she said.

“Despite our best efforts to improve profitability through various platforms, unfortunately, Godfreys has been hit by conditions beyond our control, including the weakness in discretionary spending by consumers, which has had an ongoing and significant impact on sales.”

Godfreys does not regularly file accounts with the regulator. Its latest financial report, for the 12 months to July 1, 2022, showed a net loss of $4.24 million, from a profit of $1.48 million one year earlier. Sales reached $179 million, slightly up on the year prior. But net debts jumped from $6.55 million to $18.78 million in those 12 months.

The retailer breached covenants on its overdrawn facility, but still found support from lender 1918 Finance, an entity associated with the Johnston family.

Godfreys chief executive John Morris and the company’s chief financial officer, Steven Mavro, only joined about 12 months ago in an attempt to turn the business around.

The first meeting of creditors will be held on February 9