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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The company will release its audited financial results in September.

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

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

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

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

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

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

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

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

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

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

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

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

The Australian luxury fragrance brand Goldfield & Banks has opened its first pop-up store, at Westfield Bondi Junction.

The store is located on Level 3, near Sephora and Myer, and is open until December 24.

At the store, customers can shop for Goldfield & Banks Native and Botanical collections and avail of a complimentary engraving on selected days.

Goldfield & Banks was launched in 2016 by French-Belgian Dimitri Weber who migrated to Australia after being captivated by its natural beauty. The brand is now available in 50 countries, including luxury department stores including Selfridges and Harrod’s in the UK and Bergdorf Goodman in the US.

Shares in Temple & Webster soared more than 14 per cent on Wednesday after the online-only furniture retailer said it was bucking a difficult environment and posted a massive increase in sales for the last five months.

The company said sales between July 1 and November 27 had risen 27 per cent compared to the same period last year, with revenues increasing even more strongly from October 1 – up 42 per cent. That sent shares to $7.41, up some 40 per cent in 12 months to give the company a $900 million valuation.

Temple & Webster chief executive Mark Coulter said the retailer had been cutting prices as shipping costs returned to the levels they had been before the COVID-19 pandemic. That, and better deals with offshore suppliers, had meant lower costs overall. “We’ve decreased our prices,” he said. 

Mr Coulter said Millennial shoppers were still spending at Temple & Webster despite more caution among consumers after the Reserve Bank increased interest rates for the 13th time since last May. The latest Australian Bureau of Statistics figures, released this week, showed a fall in retail spending in October compared to the previous month.

Those challenges, Morningstar equity research director Johannes Faul said earlier this week, would last into the first half of 2024 as consumers continued to limit spending. Some retailers, including Temple & Webster, offered Black Friday-themed discounts much earlier in 2023 compared to previous years, sometimes weeks before the official event on November 24.

Australian apparel retailer Lowes has processed and recycled seven tonnes of old schoolwear through textile recovery organisation BlockTexx.

According to the brand’s Modern Slavery Statement 2023, Lowes committed nine tonnes of obsolete product to BlockTexx this year. Lowes confirmed 85% of its schoolwear items contain polyester cotton, which were deemed fit for resource, recycling and re-raw material handling.

Lowes head of product development and procurement manager Debra Vo has also reviewed the design and development process to prioritise highly recyclable materials. The first iteration looked at substituting nylon buttons for polyester buttons, with negotiations underway for sublimated polos to use recycled ranges moving forward.

BlockTexx owns proprietary technology that separates polyester and cotton materials such as clothes, sheets and towels of any colour of condition back into high-value raw materials of PET and Cellulose for reuse as new products across all industries.

According to Lowes’ statement, the brand is aiming to reduce resource waste associated with its schoolwear.

“Through this sustainable approach, Lowes is not only minimizing the environmental impact of discarded school uniforms but also promoting a circular economy by ensuring the resources are given a second life.”

Lowes is a family-owned apparel brand that operates 180 stores across Australia and has apparel contracts with 727 schools in the country. The company's annual turnover ranges between $230 million to $260 million with on average six million transactions per year.

Australian fashion spending surpassed other retail categories to grow 17.4% during the 'Click Frenzy' sales period, according to the latest research. 

Australia Post's latest quarterly Inside Australian Online Shopping Report showed online spend in May grew 9.7% month-on-month (MoM) and 0.6% year-on-year (YoY), with basket sizes for fashion hitting $151 on average.

This was despite an overall drop in average basket size in 2023 by 6% YoY to just $105.

During the end-of-financial-year (EOFY) sales event, fashion hit second place in overall popularity at 10.2%, behind home and garden at 12.4%. Overall, EOFY sales were up 4.3% on last year.

In the fourth quarter of FY23 online purchases in fashion were down 3% on the YoY, but up 9.5% QoQ, with an overall market share of 26%. Fashion is the second-highest category in market share behind variety stores at 36%, with that category up 18% YoY in Q4 FY23, and up 13% QoQ.

Despite the gains in fashion, the report found there is an overall softening overall in online purchases, with 9.4 million households (or 82% of the Australian population) making an online purchase during the 2023 financial year.

An average 5.5 million households made an online purchase each month in Q4 FY23 - an increase of 3.9% compared to the equivalent quarter last year. However, online spend is down 3.1% compared to last year.

With consumer buying confidence at low levels, Australia Post claimed consumers across the country, particularly younger generations, are becoming ‘strategic shoppers’ — looking for ways to maximise the value of their dollar and increasingly take advantage of key sales events.

Australia Post executive general manager of parcel, post and eCommerce services Gary Starr said that while an increasing number of households made an online purchase in the fourth quarter (compared to the last year), it’s clear that cost-of-living pressures are taking effect.

“Aussies are now more cautious and selective with where and when they spend their money, which is why online shopping carts are averaging smaller than last year,” Starr said. “Our love affair with online shopping hasn’t waned, however cost-of-living pressures are creating short-term headwinds.

“This is an opportunity for retailers to entice customers via sales events, subscriptions or other forms of rewards that create loyalty and repeat purchases.”

An Australia Post consumer survey conducted this year revealed that 85% of Australians aged 18-34 plan to shop (or have shopped) during dedicated sales events.

Meanwhile, customer loyalty programs and bundling services are proving popular with online shoppers, with 1 in 4 consumers turning to online retail subscriptions as part of their cost-saving practices.

Regional Australia saw a year-on-year (YoY) growth of 4.2% in the last quarter, compared to just 0.7% YoY in metro areas. The Northern Territory led in this last quarter, with an increase of 9.3 % YoY in online sales compared to last year.

You can’t apply for the role of muse in the fashion industry. It is never advertised and calling yourself one is tackier than a fake handbag. You simply know one when you see them.

Along with Jackie Kennedy, the Duchess of Windsor, socialite Babe Paley, performer Josephine Baker and actor Audrey Hepburn, Jane Birkin, who died on Sunday aged 76, was immediately recognisable as a muse.

She wore the title so well that even lending her name to the ultimate luxury handbag, the Hermès Birkin, failed to eclipse her style spirit.

“Having a Hermès bag named after you says it all,” says celebrity stylist Jess Pecoraro, who has worked with Jesinta Franklin and Pip Edwards. “My first thought when she died was that the bag is going to go up in price again. I have my eye on a vintage one and now I’ll never get it.”

The coveted handbag was created in the mid-eighties, after Birkin found herself upgraded on an Air France flight to a seat beside Jean-Louis Dumas, chief executive and artistic director of his family’s brand Hermès. After hearing how Birkin’s husband filmmaker Jacques Doillon had deliberately run over her signature wicker basket in his car, Dumas designed a practical, streamlined bag for the working mother.

Today, customers can pay thousands and wait years for a Birkin handbag in their preferred style to arrive at a Hermès boutique. A crocodile Birkin bag is currently available on luxury auction site 1stDibs for $US575,000 ($857,581).

In a statement on Sunday, Hermès paid tribute to Birkin’s influence. “We discovered and appreciated the extent to which Jane Birkin’s soft elegance revealed an artist in her own right, committed, open-minded, with a natural curiosity of the world and others.”

“She looked just as good carrying the bag as a basket,” says Naomi Smith, fashion director at Marie Claire.

For Smith, Birkin’s appeal stems from a commitment to simple pieces worn with a casual disregard for trends, labels and price tags.

“It helps that she was incredibly beautiful, but there are plenty of pretty women out there,” Smith says. “She had incredible style, and it was all her own.”

“When she was younger she wore provocative, sheer pieces with complete confidence that made them appealing rather than shocking. Girls today are still copying that look in sheer dresses, but she made it look so effortless.”

Muse was just one of Birkin’s titles. She first found fame as an actor in London and then Paris, where she became the epitome of French chic, after being paired professionally and romantically with controversial cultural figure Serge Gainsbourg.

“I think it’s fabulous that a British woman came to define French style,” says designer Bianca Spender. “She brought that British street style to Paris, which had been stuffy and done-up.”

“With her outfits, there was always a block heel that you could run in or a look that could go to a picnic or a nightclub.”

Birkin was also a singer, first recording the scandalous breathy duet Je T’Aime . . . Moi Non Plus with Gainsbourg in 1969. Despite (or because of) reported condemnation from the Pope, the song was an international hit with Abigail, from the groundbreaking television series Number 96, recording an Australian cover version in 1973.

Birkin’s daughters Charlotte Gainsbourg and Lou Doillon (her eldest daughter, photographer Kate Barry, died in 2013) continue her creative legacy, acting and singing.

“I saw Jane Birkin perform twice in concert,” says Rachel Wayman, fashion director at In Style. “She had the same magic on the stage and on the street.”

“I was at a café in Paris when I saw her walk past years ago. I had to get up from my seat just to watch her walk away. It was a moment,”

Of course, Wayman remembers the outfit: a T-shirt, military jacket, jeans and scuffed sneakers.

“Anyone could wear that outfit but no one could wear it like her. That’s what makes someone a fashion icon.”

Outdoor apparel retailer KMD Brands says all three brands contributed “strong sales growth” in the first three quarters of the financial year.

In a trading update, the company said group sales are expected to exceed $1 billion for the first time for the year to July 31. Underlying EBITDA is expected to be in the range of $105 million to $110 million.

A warmer-than-usual start to winter in Australia and dampening consumer sentiment have seen sales and retail footfall fall.

Despite slower winter trading, Kathmandu cycled its “best-ever” winter season performance last year.

Group CEO & MD, Michael Daly, said: “With three weeks of trade still to come, we remain focused on delivering our key Kathmandu winter and Rip Curl Northern Hemisphere summer results while continuing to moderate our cost base for the year ahead.”

For the fourth quarter, the business flagged trading continues will be more “challenging” as cost-of-living pressures and softening consumer sentiment persist.

Local investment firm Glow Capital Partners will acquire 51% of Australian uniform business Cargo Crew in a bid to grow the apparel brand globally.

Under the agreement, the Cargo Crew executive team will retain full management control and three members of Glow Capital Partners will join the board.

Launched in Melbourne in 2002, Cargo Crew is a major tailor predominately in the hospitality space. Founder Felicity Rodgers said the family-owned business is preparing for further global expansion.

“Our obsession with making the best product has led to strong international demand,” Rodgers said. “Already 25% of our online sales are from international customers who have sought us out and continued to buy.

“Last week we had a sale from South America with a note saying they couldn’t find another brand that brings together fashion and function like Cargo Crew.”

Rodgers said the partnership with Glow Capital was the natural next step for the business.

“We have an incredible growth opportunity ahead of us, so we welcome the expertise in scaling up and building a global brand that the Glow team brings,” Rodgers said. “Including Kate Morris, Justin Ryan and Alex Downie on to our board to guide us as we expand into other markets will be a huge asset and help us grow Cargo Crew to its full potential.

“Cargo Crew’s uniforms cater to hospitality, retail, transport, banking, health and government industries, and as our customers' businesses grow, their relationship with us deepens because we work with them to tailor a uniform fit for their changing needs.”

According to Glow co-founder Justin Ryan, it was a strategic decision to invest in Cargo Crew.

“Cargo Crew is a great Australian business with the opportunity to be a global brand,” Ryan said. “They have a proven track record with 21 years in business already and with an excellent founder and executive team, they are primed for growth that Glow can help accelerate.

“Having worked with the team for the last few months, we know we are values-aligned and have the same vision for the business's next phase of growth.”

Glow Capital Partners associate director Alex Downie said Cargo Crew plays a role for small and medium businesses across the country.

“In any service industry, the way your team presents themselves and moves about the space is a huge brand element,” Downie said.

Cargo Crew operates a 4,500 sqm headquarters in Bundoora, Melbourne, and ships uniforms to over 80 countries. It holds contracts with major local and international businesses includes Levi's, Stocklands, IGA and Birkenstock.

Household spending may be under serious pressure, but the boss of online retailer Pet Circle says consumers aren’t trading down when it comes to meeting the needs of their four-legged friends.

“With most of our customers, it looks like they try very hard not to downgrade the quality of food for their animals,” said Mike Frizell, the company’s co-founder and chief executive.

Pets are hot property in Australian retail, with giants like Bunnings and Woolworths making significant investments into pet supplies over the past year despite fears of a broader discretionary spending slowdown.

Woolworths made a $586 million investment to take a majority stake in Ballarat-founded pet supplies business PETStock last December, while Bunnings executed a major expansion of its pet goods category in March.

Frizell says it’s no surprise that the retail conglomerates want exposure to the sector, which was growing strongly even before the pandemic prompted a puppy boom.

“It’s a great sector. They are seeing the same macro dynamics that I do – it’s still early in its evolution,” he said.

Pet Circle, which was founded in Sydney in 2011, has started the new financial year with a fresh $75 million funding boost from existing investor, Prysm Capital, helping Pet Circle maintain its billion-dollar valuation.

Prysm’s co-founder and partner Matt Roberts says the Australian market is still in the early stages of the “humanisation of pets” trend.

“The investment and entry by other players are evidence of this trend and a signal of the health and growth potential of the pet vertical,” he said.

Frizell says two thirds of Pet Circle’s consumer base use its subscription model and have set up regular automatic deliveries of supplies for their animals. “They rely on us month in, month out,” he says.

Other pet services businesses have also been bullish over the past month. ASX-listed pet services firm Mad Paws has seen its shares jump by 11 per cent over the past five days after telling investors the company is edging towards profitability.

Mad Paws is expecting revenue growth of up to 147 per cent for the 2023 financial year. Chief executive Justus Hammer said the company was adding thousands of new customers every quarter, despite tough economic conditions.

Retail analysts are forecasting a further slowdown in spending over the next six months, but everyday household spending like groceries and pet goods are not predicted to be at the front of the firing line.

Instead, electronics, home goods and fashion are predicted to bear the brunt of the slowdown.

Frizell said Pet Circle has been able to perform strongly during periods of strong economic growth as well as during turbulent conditions.

“That is what makes the pet industry so attractive and why you’re seeing a lot of interest,” he said.

Pureplay books retailer Booktopia has raised $8.1 million in capital raising to fund the completion of its Next Gen customer fulfilment centre and enhance its capital position.

The raise comprises a $6.5 million two-tranche placement – which is subject to the board’s discretion – and a $1.6 million debt-to-equity conversion, subject to shareholder approval. The loan facility ($5 million) was secured from AFSG Asset Management.

Booktopia chairman Peter George said: “After two years of losses, completing the Next Gen CFC and with the other business improvement initiatives already announced will reset the cost base of the business.

“The raise will enable BKG to complete the Next Gen CFC by late August this year. With the benefits of these initiatives, we expect a return to EBITDA growth from the next financial year.”

In a trading update, the retailer said “challenging” trading conditions were observed throughout the second half of the financial year compounded by increased labour costs and other disruptions associated with the transition to the CFC.

“Looking ahead to FY24, with the annualising benefits of the initiatives previously announced, and the realisation of the operating efficiencies and increased capacities of the Next Gen CFC, BKG forecasts an underlying EBITDA profit of $13.5 million,” the business said in a statement.

For this financial year, the business expects an unaudited underlying loss of about $5 million.

Meanwhile, the company has advised that the short-term consultancy agreement between BKG and Tachyon Ventures, an entity associated with founder and former CEO Tony Nash, will end on August 31.

Nash will reman a non-executive director of Booktopia.

Sky News host Caleb Bond says that luxury retail sales in Australia, which have nearly doubled to $5.3 billion in the past ten years, could offer alternative strategies to curb inflation besides raising interest rates.

Bond highlighted that the contribution of the luxury retail sector to Australia’s GDP is growing at a faster pace than the overall economy, with the luxury market forecast to reach $6.1 billion by 2027/28.

In 2021, French Connection United Kingdom underwent an ownership change. Following that, Brandbank Group’s Australian distribution license with French Connection went up for renewal.

But Brandbank decided - after careful consideration - that it was going to end the agreement with the UK-based brand and reimagine the existing assets into a new vertical brand called ‘Unison’ - owned and operated in Australia.

As part of the rebrand, Brandbank will transition the same core team of 25 people who looked after French Connection Australia - across design, human resources and operations - and will refit its 11 standalone stores, 48 David Jones concessions and 57 Myer concessions into Unison. The website will also be updated to suit the new brand name.

Brandbank CEO Peter Halkett, who just joined the company two weeks ago, told Ragtrader that this large-scale brand launch was both timely and desired.

“[Brandbank] wanted to have something much more specific for the Australian market,” Halkett says. “Much more flexibility… So an Australian-focused brand with attributes that appeal to the Australian customer, and to really design a range that has all the products that we had in French Connection, but also has some more fashion products and slightly more premium.

“By reviewing and deciding to relaunch a new brand basically allowed the business to position it precisely and exactly how it wanted to rather than necessarily operate within the restrictions under a license agreement.”

French Connection first launched in Australia in 1998 through Brandbank, with Halkett saying the agreement originally involved shipping over all the product from the UK. Over time, Brandbank began overseeing and controlling the manufacturing and designing process in Australia

“In simple terms, controlling all facets of the brand from the manufacturer through to how it's presented at point of sale, flexibility is what it's all about now,” he says. “Distributing and licensing is quite different from being vertical. Brandbank made a very good decision by establishing its own brand now.

“It's been a successful business, but there are times when you've got to make a decision whether you want to continue. Because remember, when you have a license, a lot of the value of that business can be in the brand itself. We don't own brands. So when we have our own brand, we're creating more value by having that as our own brand name.”

As part of the transition, Unison will utilise the same sourcing channels that Brandbank uses for its other fashion brands, including Seed and Commonry. It will also continue producing many of the core product lines that were successful with French Connection Australia, while adding on new product styles.

“This is not like establishing a brand new business where we're starting with a blank piece of paper; we know what our customers like,” Halkett says. “When they go to the stores, and when they go to David Jones and Myer to our pads, our job is to set out exactly what Unison does compared to French Connection.

“We're hoping a lot of French Connection customers will like what we're doing with Unison, and, in many ways, we'll be designing many of exactly the same products with the same fabrics in the same fit and same style.”

Halkett says there will be no immediate changes to price points, with current lines averaging between $50 to $350, nor any major changes to its production output. French Connection Australia sold a core range with seasonal core and monthly drops. All of its styles will be designed in Australia, with manufacturing centred in Asia.

“What we're starting with is what we have today,” Halkett says. “There is definitely a lot of space for a lot more concept stores, because we only have a limited amount - compared to over 100 Seed stores, for example.

“In the future, once we transition customers, and we're satisfied that that's going well, we believe we can probably expand the size of the pads in time as we grow the range and as the brand gets more and more traction. Beyond that, I'm a New Zealander, so we'll have New Zealand in our sights at some point in time as well.”

Halket says when the brand does venture into New Zealand, it will likely open more owned stores than department store concessions.

Speaking on the entire Unison venture, Halkett says it will be the first large-scale launch of a new brand in Australia.

“It's a very unique situation,” Halkett says. “It's not for the faint-hearted. But one thing I appreciate about this business is they take a long-term view in their decision-making. This is definitely the right long-term decision.

“For me to join a new company and to immediately have such a significant brand launch is very exciting.”

BB Retail Capital (BBRC) has issued a compulsory acquisition notice in relation to its takeover bid for discount fashion retail brand Best & Less Group (BLG).

In an ASX announcement, BBRC advised BLG shareholders to accept the takeover offer at $1.89 per share and has extended the offer acceptance period until July 14.

“The bidder has advised that the compulsory acquisition will be on the same terms as the offer, including the offer price of $1.89 per BLG Share.”

In an effort to encourage a fast uptake, BBRC has told BLG shareholders that if they accept the offer now, they will be paid within seven days of their acceptance, but if they wait for the compulsory acquisition process, payment will be in at least six weeks’ time.

Meanwhile, BLG’s independent directors – Stephen Heath, Melinda Snowden and Colleen Callander – have all resigned.

BLG’s board has appointed Tim Dodd as a non-executive director of BLG with immediate effect. He is the global CFO of BBRC business across investments and operations.

Borrowers are gloomier than they have been since the global financial crisis and economists warn the pain will get even worse for households and retailers if interest rates keep rising as expected.

The Reserve Bank of Australia’s decision last week to keep the cash rate on hold at 4.1 per cent appears not to have improved the mood, with consumer sentiment falling 0.8 points over the past week, according to the latest ANZ-Roy Morgan survey, released on Tuesday.

The decline was driven by a deterioration in sentiment among people paying off their homes, which fell to its lowest level since the survey began in 2008.

The figures are the latest sign that households are feeling the heat from the most rapid interest rate tightening cycle in a generation as the RBA battles the most acute inflation outbreak in decades. The RBA has lifted its benchmark cash rate at 12 of its past 14 meetings.

Market pricing implies a 54 per cent chance the RBA will increase the cash rate to 4.35 per cent at its August 1 meeting, and puts the probability of an increase by September at 86 per cent.

The proportion of consumers who said now was a good time to buy a major household item was mired around the record low levels witnessed at the start of the COVID-19 pandemic, according to the survey.

The collapse in sentiment has translated to lower discretionary spending. Retail trade volumes declined in both the December and March quarters – the first back-to-back fall since 2011 – as consumers cut back on non-essential purchases such as appliances, clothes and electronics.

Spending on discretionary items fell by 0.6 per cent over the past 12 months, driven by a 4.8 per cent fall for furnishings and a 3.4 per cent drop for clothing, data released on Tuesday by the Australian Bureau of Statistics shows.

Non-discretionary spending, by contrast, increased by 6.9 per cent over the past year.

Commonwealth Bank economist Harry Ottley said consumers were trimming spending on items such as travel and entertainment, but spending more on childcare.

“We expect these trends to continue and for the consumer to further curtail spending over coming months as the fixed rate mortgage reset hits its peak,” Mr Ottley said.

Australians are spending on average almost $600 less online than they were a year ago, Airwallex’s digital economy index shows.

The data, released on Tuesday, is based on a representative sample of 1000 of the Australian fintech’s customers.

Airwallex director of strategy Amelia Hamer said Australians were easing up on non-essential spending.

“As interest rates have climbed and cost-of-living pressures have increased, it’s no surprise Australians are being more selective about where they spend online,” Ms Hamer said.

Retailers feel the heat

Sentiment among retailers has fallen sharply as a result of fewer sales, with the NAB business survey for June revealing conditions weakened further in the sector last month.

Confidence among retail businesses was weaker than any other industry, declining nine index points, according to data released on Tuesday.

Other consumer-exposed industries including wholesale trade and personal services also experienced falling confidence, meaning there were more pessimists than optimists.

JP Morgan economist Jack Stinson said the NAB survey indicated a near-term increase in the jobless rate was likely, after surveyed capacity utilisation fell to 83.5 per cent, its lowest level since April 2022.

“Capacity utilisation is a fairly good leading indicator of the unemployment rate, and the current level is consistent with a three-month ahead unemployment rate above 4 per cent,” Mr Stinson said.

“The metric has now declined in each month since January and like other leading indicators ... points to an increase in the jobless rate over the second half of the year.”

Consumers are also pessimistic about the outlook for jobs. The Westpac-Melbourne Institute sentiment survey, also released on Tuesday, showed household unemployment expectations up 32 per cent since the RBA started lifting interest rates in May 2022.

NAB head of market economics Tapas Strickland said the unemployment expectations index had correlated highly with the unemployment rate.

“Overall, that suggests a rising probability the unemployment rate could rise, though other signals such as job vacancies still suggest a tight labour market,” Mr Strickland said.

Australian consumer electronics giant JB Hi-Fi announced a major expansion of its New Zealand operations last week, unveiling plans to double its store count in the next three to five years. 

Managing director of JB Hi-Fi New Zealand Tim Edwards told Inside Retail that he plans to grow the business from 14 stores to 38 in the next few years, and has identified a total of 60 locations that could work as bricks-and-mortar sites. 

Whether JB Hi-Fi expands into all of these locations will depend on the success of Edwards’ five-year strategy for the business, which he has been honing since joining JB Hi-Fi New Zealand 12 months ago.

Based on his 14 years’ experience in New Zealand retail, including at Noel Leeming and The Warehouse Group, Edwards sees a massive opportunity for JB Hi-Fi to expand physically and digitally in the coming years. He revealed that JB Hi-Fi also plans to move its e-commerce site to the Shopify platform in the future.

“I’ve seen a lot of the nooks and crannies of the New Zealand market, and one of the things I always noticed [from the outside] was that JB Hi-Fi was underperforming on its potential,” Edwards told Inside Retail. 

“That always worried me as a competitor, but I joined the business just over a year ago and [now get to] help to realise that potential.”

That underperformance isn’t a reflection on the team, Edwards said, but rather, the lack of a clear strategy on how to take JB Hi-Fi New Zealand to the next level. This is something the business now has, and the team has rallied behind it.

Gut and experience

According to Edwards, the New Zealand business had been in a state of “hibernation” for the last five to seven years, as its Australian owner, JB Hi-Fi Group, tried to work out what to do with it.

The group eventually decided to “double down” on the New Zealand market, and invest in building it up as the broader retail market recovered. Edwards was brought on in 2022 after the former New Zealand MD Cherie Kerrison exited the business, and he immediately started working on the next phase of JB’s local growth.

According to Edwards, the New Zealand market could potentially handle double or triple the size of JB Hi-Fi’s current store network, but he is working hard to make sure that each store location is right. For reference, JB Hi-Fi currently has 14 stores across New Zealand, whereas Noel Leeming has closer to 90.

“We use multiple triangulations [to make those decisions], such as population density, and income per household, etcetera, but we also use a lot of gut and experience,” Edwards explained.

“We see a clear line to 38 stores, but the key is to make sure that we resist the temptation to just put stores wherever, whenever the sites become available. We want them in the right size, in the right location, and to complement what we’ve already got.”

Part of the expansion involves relocating at least two stores to more desirable locations. JB’s Hamilton store on New Zealand’s North Island, for example, has been relocated from the CBD to a shopping centre. It drew 15,000 customers through its doors on opening weekend. 

“This calendar year we’ll be launching on Moorhouse Avenue in Christchurch. It’s New Zealand’s second largest city, and we’ve only got one store there — that catchment can handle three, four, or five stores over time,” Edwards explained.

“Next after that will be Invercargill, at the very bottom of the South Island, which is a very high socio-economic growth area. And then the other two stores we’ll be launching before Christmas [2023] are in Christchurch and Auckland International Airport.”

As it stands, JB isn’t the biggest consumer electronics business in New Zealand, but one of its advantages is that it caters to multiple types of customers. 

Edwards noted that while JB’s consumer electronics customers – those coming in for televisions, monitors, laptops, and phones – shop on average 3.5 times a year, the retailer also caters to media customers, who shop for music, movies and video games around once a month.

Having a higher volume of customers – around 100,000 people a week – enables JB Hi-Fi to capture more spend than its competitors.

Retail at the end of the world

There are inherent difficulties in trading in New Zealand, however. The country is split across two major islands (although the country is technically made up of more than six hundred islands), and has just a few large cities, surrounded by smaller towns and rural areas. 

This can make getting stock into stores difficult. Getting it to customers can be even harder. 

“We’re at the end of the world here, so we’ve got to get stock here, and then get it to the right island, and then get it to the customer,” Edwards explained. 

“On the surface you think, ‘how the hell are you going to do it’, and it’s not without its challenges, but there’s a pretty tight infrastructure behind it, and our customers know that if they’re in a remote South or North Island town, they’re going to have to wait another day.”

Bigger sales and better discounts are on the way between now and Christmas, as retail experts predict brands will have to work harder to court shoppers as spending continues to slow.

National retail turnover jumped by 0.7 per cent in May, according to Australian Bureau of Statistics figures released last week, though much of that spending growth came from consumers taking advantage of larger-than-usual sales before the end of the financial year.

Spending on household goods peaked last November and has been in decline since, dropping by 4.4 per cent over the past year.

Industry experts say there are plenty more sales and promotional campaigns to come over the next few months as retailers fight for a shrinking pool of discretionary income.

Retailers say there is evidence consumers are “trading down” to more budget-friendly options in the face of surging inflation in essential categories such as food, while the 12 interest rate rises since May last year have left families grappling with rising mortgage repayments.

Australian Retailers Association chief executive Paul Zahra said he expected more promotional activity across the sector given the current conditions.

“You can expect, when sales are in decline, retailers will have to sharpen their pencils,” he said.

“It’s a good story for consumers ... It’s a great time for shoppers, if you’ve got the money.”

Pessimism about the outlook for non-essential spending grew further last week after consumer electronics giant Harvey Norman flagged a profit slump of as much as 25 per cent for the 2023 financial year.

Mid-market retailers including Best & Less, Baby Bunting and Michael Hill International have also updated the market over the past month to reveal that they are facing a softening spending environment.

The director of retail strategy consultancy Retail Oasis, Trent Rigby, said many retailers appeared to be preparing to ramp up discounting towards the latter half of this year.

“Smaller wallets mean that retailers have to work harder to take an increased share of this spend, which often results in a lot of short-term sales promotion activity,” he said.

This means shoppers can expect big sales well before the Christmas trading season, which these days kicks off as early as October.

Customer experience expert and founder of data consultancy Fifth Dimension, Lyndall Spooner, said the rising costs for business would also play a role in the frequency of sales for the rest of the 2023 calendar year.

“The cost of warehousing is increasing, so businesses are moving to try and reduce their stock volumes to cut expenses. As a result of ongoing and more regular sales, consumers know they can wait for a sale before they need to buy.”

Analysts believe that consumers’ increasing focus on price in these conditions could deliver further advantages to the company many believe is the biggest threat to legacy retailers: Amazon Australia.

In a note to clients on Harvey Norman’s sales update last week, Morningstar retail analyst Johannes Faul noted that electronics retailers were facing increasing competition on price from overseas competitors.

“Consumers show little distributor loyalty as they seek the lowest price. Over time, we think a few major online distributor channels, such as Amazon Australia, could take the largest share of the Australian online retail market,” he said.

Amazon is upbeat about the role of sales in the current environment and will kick off its Prime Day event for members later this month.

“Aussies are a bargain-oriented bunch,” Amazon Australia country manager Janet Menzies said in June. “That adrenaline feeling that you get from treating yourself to something at a price that you perhaps didn’t imagine is definitely part of making sure that people receive our offer as valuable.”