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Women's 'Arli' shoulder bags, by Gucci, are charging out the doors of Chinese shops, filling the coffers of European conglomerate Kerang. Taylor Weidman

His boss, chairman and CEO Francois-Henri Pinault - does anyone have a single-barrelled first name at Kering? - said the trend was set to continue: "In terms of the momentum with Chinese clients, it's very strong."

Gucci is apparently not the brightest star in the Chinese handbag firmament these days, so Kering is looking to push on into perfume, beauty, jewellery and travel retail – you name it, really.

Finally, Swiss firm Richemont, purveyor of Jaeger-Lecoultre watches and Montblanc pens, said its Asia-Pacific sales growth excluding Japan rose 17.5 per cent in the fourth quarter to €1.39 billion, despite an apparent shift in Chinese consumer preference from watches to handbags.

An accepted data point is that Chinese shoppers account for more than a third of global demand for luxury goods. So the European deluxe sector has been watching the region with as much furrow of their collective brow as the Botox allows.

China's fourth-quarter GDP growth of 6.4 per cent was the slowest since the global financial crisis, and the annual rate of 6.6 per cent was the slowest in 28 years.

Retail sales, though, bucked the downtrend, rising 8.2 per cent for the year. Rural consumers got in on the act, outpacing their urban peers and perhaps investing in their first Philippe Patek.

But not all companies shared in the luxury goods makers' bonanza. Apple reported a 27 per cent drop in gadget sales in the fourth quarter.

"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude nor the economic deceleration, particularly in greater China," Apple CEO Tim Cook wrote to investors.

It's possible Chinese consumers are happy to buy a different phone or tablet, while seeing no possible substitute for a Birkin bag or a pair of Gucci glasses.

So while the European leaders fret about their lack of infrastructure titans to take on the US and Chinese conglomerates, there is still one industry where the old Continent bags the global top spot: when it comes to the fashionable and frivolous, the French still rule the roost.

HSBC has appointed a new head of retail banking and wealth management effective immediately to help build a bigger retail presence. 

Jessica Power will be part of the banks efforts to increase its presence in retail banking by assisting domestic and international customers with their mortgages, bank accounts, credit cards and other financial needs. 

Ms Power has over 23 years’ experience in the industry, most recently as state manager metro NSW for Westpac. Prior to that, she worked at Citigroup Australia for 19 years in various roles. 

Ms Power replaces Graham Heunis who has taken on a new role as head of Asia-Pacific sales management, retail banking and wealth management. 

HSBC Australia’s chief executive officer Martin Tricaud said that under Ms Power’s leadership the bank would see its growth efforts come to fruition. 

From facial recognition payments to super fast delivery and even in-store childcare services, there is a lot that Western countries could learn from the ‘new retail’ concept in China.

The term ‘new retail’, dubbed by Jack Ma in 2016, describes the future of retail in China, focused on merging online with offline and creating customer-friendly experiences.

But at Euroshop last weekend, Frank Quix, managing director at retail consultancy Ebeltoft Group, argued that in the Western world, we still think of offline and online as two different channels, whereas in China, they are just seen as commerce.

“We start by either doing experience or convenience and it’s hard to combine them. It’s also how we approach customers. What we try to do is fulfil their needs in the best possible way. It’s based on function or on hedonism and we try to create formats that perfectly fit those needs,” Quix said during his presentation at Euroshop.

“As soon as you start talking to a traditional retailer and they tell you they’re omnichannel, they want to prove it, so the first thing the CEO will tell you is their percentage of online sales. This would never happen in China because talking about online sales if you’re truly omnichannel doesn’t make sense.”

Here are some of the biggest lessons that Western retailers can learn from their Chinese counterparts:

1. Cards are dead and cash is out

At 98 per cent, China has the highest mobile penetration in the world, said Quix.

Only 9 per cent of all sales are done with cash and there are so many locations where you just can’t use cash. Most payments are done by WeChat Pay or AliPay, he explained.

Major retailer Suning has taken a step further, where customers can pay using facial recognition in their stores. 

2. Convenience is the name of the game

Major supermarket chain Hema promises ‘30 minutes within 3K’ – customers can have products delivered to them within 30 minutes if they’re located 3km from a store. Basically, physical store locations have turned into distribution hubs, said Quix. This is largely possible in China because the stores are located in dense cities and the average basket size is small, compared to the West, where most customers have a larger basket size.

3. Whatever, wherever, whenever

Like in Japan, vending machines are particularly popular in China, continued Quix. However, it’s not just soft drinks and packets of lollies being sold. Quix described one machine he saw which sold fresh pizzas that you could actually watch being baked in front of you. Havaianas is an example of one brand which uses vending machines in shopping centres to sell its thongs to customers on the go.

4. Seamless frictionless AI

Personalisation is a buzzword that’s been thrown around a lot, but in 2018, Guess collaborated with Alibaba in China to create a truly bespoke in-store experience for customers.

The smart mirrors within the stores offer customers personalised recommendations and combinations based on the RFID-enabled products that they pick up within the store, said Quix. The mirrors also direct customers to where other suggested items can be found within the store.

5. The evolution of ‘brandshipstores’

Brands are now taking control of sharing their stories by creating immersive stores to fully engage customers beyond just buying the product. 

There are six Starbucks Reserve stores around the world, which are a combination of a shop, production facility, bakery and coffee bar. According to Quix, almost half the total sales are actually merchandise like coffee beans, not cups of coffee. 

Another example is EV car manufacturer Nio House in China. Often located near shopping centres, the swanky spaces are not only showrooms, they also feature a living room and a coffee bar – they’re very similar to club houses for Nio car owners, who have free access and can gain points by simply visiting or even organising events at the house.

“You can even leave your kids at the daycare there so you can visit the shopping centre, come back for a coffee, then go home. At the same time, while you’re there, your car is being charged,” described Quix.

6. Extreme transparency

“Everywhere, people want to know the ingredients of products and where they’re made,” said Quix.

At Hema’s stores, you can not only scan QR codes on products, but also on the live fish swimming in tanks, where you can find out when and where the fish was caught and read tips on how to cook and prepare it. From there, customers can select which fish they’d like to eat and inform the salesperson, who will then send it to the kitchen to be cooked how the customer would like.

7. New levels of personal service

Live chat is something that retailers mostly use on their site, but at department store AS Watson, it’s also implemented in-store to help customers navigate their way around. As Quix explained, it’s a particularly helpful tool for retailers with many locations, as it can be difficult to offer staff with extensive knowledge on all store floors.

At AS Watson, customers may be chatting to an avatar through live chat, but they’re still speaking to a human, rather than a robot. Interestingly, knowing that they were speaking to a person on the other side, the brand found that customers were much more forgiving if mistakes were sometimes made.

Bras N Things has unveiled its first sustainable collection featuring garments that are all made from at least 20% recycled yarn. 

Building on its experience with singular sustainable pieces this is the first time Bras N Things has launched a full sustainable collection.

The campaign showcases Bras N Things sustainable designers Emily Dalamaras and Emma Stubbs, wearing the lingerie and sleepwear designs they created. 

Speaking on the collection Dalamaras said that she was thrilled to design the collection and feature in the campaign. 

"Every collection I work on is special to me, but to be able to combine my love of creating beautiful lingerie and also wear it in the campaign was incredible.

"I am really passionate about being part of the fashion industry’s movement towards working more sustainably and I’m excited to share this range with Bras N Things customers," she said. 

Stubbs added that she is excited to be a part of the sustainability movement that is taking place in the fashion industry. 

"I think the fashion industry is finally realising the power we have to make positive changes to the way we design and produce garments.

"Sustainable fabrics, like we have used in this collection, look and feel beautiful and they are a big part of the future for a fashion industry that cares for our customers and the planet.

"I am so excited to be part of this positive change with Bras N Things," she said. 

Bras N Things national marketing manager Natalie Chalmers said that the business was thrilled to feature the designers for the first time in the campaign images. 

"This campaign is about celebrating the future of fashion and embracing the small, but important, things we can all do to help make a positive change in our world.

"Bras N Things are committed to taking real steps towards creating sustainable fashion and this new collection is part of that.

"This is the first time we have ever featured our designers in a campaign, but we felt it was really important to showcase the two passionate and dedicated women behind this collection - Emily and Emma.

"They have created a beautiful, sustainable collection that we know women will love and we are excited to see their dream brought to life," she said. 

The collection features a camelia floral print across the sleepwear and lingerie styles.

The lingerie styles include a push-up bra with crisscross detailing up to a size 14DD, a longline bralette with neckline strapping detail up to a size 14, a bralette, a Brazilian knicker and v-string. 

The floral theme continues with the Valley range which features a contour bra up to a size 16DD and an underwire bra up to a 14E.

The sleepwear styles include a cami, short, playsuit and a 3/4 pant. 

The range is available now at Bras N Things stores Australia-wide and online at the Bras N Things website. 

It retails for between $26.99 to $69.99.

Former Australia Post boss Ahmed Fahour is turning his hand to hairdressing.

In a way it makes perfect sense for a man some have described as Melbourne’s answer to George Clooney.

Still, it’s a notable diversification of the personal investments of the man last year appointed as head of banking upstart Latitude Financial Services.

Clearly the reincarnated banking exec Fahour isn’t putting all his eggs in the financial services basket.

Towards the end of last year keen asset trader Fahour — once Australia’s highest-paid public servant back in his $5.6 million-a-year postie days — took a 15 per cent stake in retailer Hairhouse Warehouse.

The outfit, which sells hair care products and operates in-store salons, has more than 135 shops nationally. Fahour has also joined the private company’s board of directors.

To make room for Fahour’s aptly named investment vehicle Beachlane Beauty on the Hairhouse Warehouse register, co-founder brothers Tony and Joseph Lattouf each sold down their stakes in the group from 40 per cent to 32.5 per cent.

It is unclear how much Fahour — who also chairs billionaire Raphael Geminder’s ProPac — paid for his stake in the operation. The Lattoufs have plans to expand their store count to more than 200 in Oz and offshore in the next five years.

Latitude, ProPac and the burgeoning haircare enterprise will all keep Fahour busy in the year ahead.

Surely the one-time NAB exec has too much going on to be tempted back as Andrew Thorburn’s permanent replacement.

Although wouldn’t it be fun?

Back in town

Gaming billionaire James Packer is catching up with old friends on his week back in Australia.

Margin Call hears the Crown Resorts major shareholder — at last count valued at $5.25 billion on the Stensholt Index — spent much of Tuesday evening one-on-one with his friend and Crown Melbourne developer Lloyd Williams. The fellow richie — Williams is worth $787m at last count — is one of several father figures in Packer’s turbulent life.

Williams, along with ANZ’s famously discreet chairman David Gonski, was executor of Kerry Packer’s will.

Packer died at the end of 2005 but his will has only been settled between James and his older sister Gretel Packer in recent years after some, at times, acrimonious negotiations.

Packer flew into Melbourne on Sunday following the unexpected death of his former personal chef, Justin Bull.

On Monday, Packer was in Sydney, visiting friends and conducting business meetings.

Friends say the businessman’s surprise return to Australia and in particular Sydney — where his mother Ros and sister live but where Packer has struggled to feel comfortable — is a positive sign in his recovery after a difficult year.

The proof of Williams’s constructive approach was the audience along to hear him, most of whom rolled out for the after-party in the neighbouring parliamentary courtyard.

Among them were ASIC’s new enforcer Daniel Crennan and head of corporate affairs Matthew Abbott. The corporate cop ASIC was one of the other institutions Williams willed to be better over the years.

Also along: CBA whistleblower Jeff Morris (who listened three rows in front of Comyn, who sat next to his corporate affairs boss Andrew Hall and lobbyist Euan Robertson), a trio of Williams’s media friends Piers Akerman (also in bow tie), Adele Ferguson (whose first media job was thanks to Akerman) and Sky News’s Janine Perrett (on whose show Williams revealed he had Parkinson’s).

Others paying tribute to one of Australia’s most decent politicians: NSW Labor’s newish mouthpiece Cameron Sinclair (recently at Woolworths and before that one of Williams’s bank-baiting allies back in his days in Sam Dastyari’s office), singer Kamahl (for whom Williams once organised a dinner with Barack Obama) and NAB’s highly regarded government relations operative Aron Whillans, who in January learned (while on leave) that he had missed out on the bank’s chief government affairs job to Philippa King, a former staffer to Mike Baird.

That was a shock to many along at last night’s knees-up, not to mention members in Treasurer-most-likely Chris Bowen’s office.

Time for Whillans to leave the circus?

Billionaire Gerry Harvey says it’s impossible to find suitable land for the next rollout of Harvey Norman flagship stores in Australia and will settle on redeveloping one of the group’s pre-existing Melbourne stores.

Harvey and his wife Katie Page, chief executive of Harvey Norman, say it is too early to divulge traffic volumes at their first flagship store in Auburn, which at 16,000sq m is the group’s largest worldwide.

Built in the geographic heart of Sydney, it opened in October and followed the successful rollout of seven flagship stores in Singapore, Malaysia and Ireland.

The flagship stores cost about $50 million to develop plus an extra $10m-$20m in fit-outs.

“We want to roll out a flagship store in every state,” said Ms Page, adding that sales in its first flagship in Singapore spiked soon after its opening.

“In Singapore we had a budget for the first six months. We have exceeded our budget,” she said.

“But we will never get a site in Australia as big as Auburn.

‘‘The problem is finding sites … we want flagship stores in every state, particularly Brisbane and Melbourne.’’

On the retail front, Ms Page, who oversees more than 200 Harvey Norman stores in Australia, said one of the biggest recent sellers was the Dolce & Gabbana small appliance range. She said the $800 kettles, toasters and juicers had sold so well the Italian company was extending its range.

Ms Page said the heavily decorated Smeg appliances, popular in Italy and France, were also selling well in Australia despite the relatively small population.

“We started working with small appliances several years ago when they were black or stainless steel. Now it is a really strong category for us.’’

Ms Page said the Auburn store was tracking well and she would assess its performance at the end of June. “Gerry and I want to have a flagship store in every state,” Ms Page said. However, the difficulty was deciding what store in Melbourne they would redevelop into a flagship.

“We have a lot of real estate in Melbourne. It’s just a question of which store becomes the flagship,” Ms Page said. “The decision as to what part of Melbourne will be hard, but it does not have to be greenfield. This will not be an easy decision.”

In Brisbane Harvey Norman already has a site pegged out in the city’s southeastern suburbs.

On the property front, Mr Harvey said the residential market was the only weakness, with office, retail and industrial performing strongly. He has a team of 30 staff in his property division.

“Office is particularly good. We have a big portfolio of assets and they are still going up in price,’’ he said. “I have horse, cattle, residential properties and warehouses. I have a lot of investment in retail centres and entertainment.

“But it’s impossible to find sites for flagship stores. We can’t get anything that stacks up. If it’s not possible you can’t do it.

“We have the one site in Brisbane, but can’t find anything in Melbourne or Sydney.”

Meanwhile, Ms Page said the fastest growth for Harvey Norman is overseas, particularly in Southeast Asia, Ireland, Slovenia and Croatia.

“I am on planes a lot,” she said. “Five years ago 6 per cent of our profit was from offshore; last financial year it was 22 per cent,’ she said.

Compensation to underpaid retail managers has weighed on Super Retail Group’s first-half result, with the Rebel Sport owner reporting a slight dip in first- half profit to $71.7 million despite increasing revenue. 

Super Retail (SUL) revenue rose 6.0 per cent to $1.4 billion in the six months to December 29, but the Rays and Supercheap Auto owner saw its net profit slip by 0.7 per cent in the wake of impairments announced on Tuesday.

The company said a review of employment arrangements had showed $32 million in overtime hours had not been paid in accordance with the General Retail Industry Award over the past six years, with interest-related compensation adding another $11 million in pre-tax costs.

Super Retail will pay a fully franked interim dividend of 21.5 cents, unchanged from last year.

Shares in Breville shot up nearly 20 per cent after the appliance maker defied the recent retail slump and worries of a global economic slowdown, booking a bumper first-half profit and upping its interim dividend.

Following a lift in its half-year result on the back of growth in existing markets, as well as its expansion into Germany and Austria, Breville (BRG) said its earnings before interest and tax growth for the full year is expected to beat the market’s current consensus forecast of about 11 per cent.

For the first half, net profit after tax attributable to members lifted 19.7 per cent to $43.5 million.

That figure was positively impacted by a one off reduction in its US deferred tax asset in the previous corresponding period. Excluding the impact of the deferred tax asset, net profit after tax increased 14.8 per cent for the period.

“The first half of fiscal year 2019 was a solid half for the group,” said chief executive Jim Clayton.

“We continued to deliver double digit earnings before interest and tax growth while successfully executing on our acceleration program, increasing our investment in product development and marketing, and successfully entering the German and Austrian markets.”

The company upped its interim dividend payout to 18.5 cents a share partly franked, up from 16.5c last year.

Earnings before interest, tax, depreciation and amortisation up 14.6 per cent to $70.5m.

Shares in Breville closed yesterday up 18 per cent at $14.09.

In its first-half results announcement this morning, the company said it achieved double digit growth in its key North American and UK businesses.

The ANZ business saw double-digit growth in Australia, which the company said was a strong result against a challenging retail environment. Meanwhile the New Zealand market was softer, Breville said.

Entry into Germany and Austria had been successful so far, with revenue from Germany already 42 per cent higher than the first half the company entered the UK market in fiscal year 2014, the company said.

The positive result follows a wave of business failures in the discretionary retail sector have collapsed in recent years, with iconic Australian cosmetics brand Napoleon Perdis falling victim to the retail slump last month and entering voluntary administration.

Brands including Topshop, Marcs, David Lawrence, Rhodes & Beckett, Roger David and Oroton have entered into administration recently, some shutting their doors for good.

Earlier this week, electronics giant JB Hi-Fi booked a 5.5 per cent lift in first half profit, with chief executive Richard Murray speculating that consumers are putting electronic items higher up the shopping list than other discretionary items, such as fashion and clothing.

Plus-sized fashion brand City Chic has booked a solid first six months in FY19, its first half since it emerged as the only Specialty Fashion Group brand left standing after Millers, Katies, Crossroads, Autograph and Rivers, were sold to Boni B Limited for $31 million in June 2018.

The brand, now part of City Chic Collective, saw net profit after tax reach $10.1 million, translating to an earnings per share of 5.3 cents per share, driven by 7 per cent sales revenue growth of $75.4 million.

Comparable sales grew by 9.6 per cent over the period, with City Chic chief executive and managing director Phil Ryan stating stores are profitable and trading well, and that it has plans to expand the portfolio further across Australia and New Zealand.

“Trade was consistently strong throughout the half, including over the Christmas period,” City Chic chief executive and managing director Phil Ryan said.

“We have delivered excellent topline growth globally and at higher margins, due to a constant focus on our customer.”

City Chic grew its gross margin to 60.4 per cent, compared to the 59.4 per cent observed during 1H18.

Ryan noted that online is the brand’s most profitable channel, across both Australia and the United States. It now accounts for 40 per cent penetration with the platform.

In an interview with IR in December, Ryan said City Chic’s success online is due to the way the channel is viewed within the business.

“I don’t look at online as a different silo within our business… we don’t sit there and ask, ‘What’s our online channel doing?’ We ask, ‘How many people did we sell to this week?’, and then the second question is, ‘Where did they buy?’” Ryan said.

The brand offers a much broader range online than in bricks-and-mortar stores, which are restricted in size and restrictions inherent in a physical location, tailoring the in-store experience to the high-end of the product line, and keeping a more diverse range available on the website.

The brand’s comparable sales growth has continued to be positive into the beginning of the second half of FY19, and remains in line with expectations.

Deliveroo's submission compares the proposed legislation to the Fair Work Act saying an equivalent was needed for "modern" ways of working.

“To end the trade-off between flexibility and security, we believe law reform should be considered that allows workers to accrue benefits on the basis of work performed, for example, the number of deliveries completed or the value of fees earned, rather than their ordinary hours of work, and that the provision of benefits by a company to a self-employed contractor should not impact their employment status," it says.

“Riders frequently reject orders, for example, because they’re currently completing an order for another platform or restaurant and the offer isn’t convenient for them,” the submission said. “In the last six months, 93 per cent of riders rejected at least one order and on average each order was rejected once before it was accepted.”

The average amount of time a rider works with Deliveroo is only five months which Deliveroo attributes to “many riders see riding as a short term opportunity rather than a long term commitment”.

A spokesperson for Uber said the transport and food delivery platform would also make a submission to the inquiry before 20 February.

"We recognise this is a complex policy area and any reforms will require input from workers, the community and business," the spokesperson said.

Jim Stanford, economist and director of the Centre for Future Work, said the push for legislation from "a rear guard action by Deliveroo to head off what it fears."

"The business model of companies like Deliveroo, Uber and Lyft is completely dependent on their ability to assign workers as contractors not employees," he said. "If these companies had to pay minimum wage and other normal conditions of employment they would not be viable."

Mr Stanford said the offer by Deliveroo to provide benefits in exchange for workers not being employees is a "token promise".

"In general that is window dressing to try to make the current situation, which is very exploitative, more tolerable.  Real benefits would be minimum wage, overtime, paid holidays and sick leave," he said.

"I also note it would be tied to work performed rather than time spent and that is a huge distinction as these companies depend on the free time of gig workers waiting for the next job."

In general that is window dressing to try to make the current situation, which is very exploitative, more tolerable.

Jim Stanford

Tony Sheldon, co-ordinator on the on-demand economy for the Transport Workers Union said Deliveroo is "throwing workers a bone to try and shut them up" and "inventing new ways to keep underpaying its workers."

Mr Sheldon said last year workers woke up to a 30 to 40 per cent pay cut when Deliveroo increased delivery distances without warning.

"This is another public relations exercise to try to hide the exploitation that goes on every day,” he said.

"The offset to that is [fast-growing categories like] the connected home and connected technology and where technology fits in the household - when people have money they want to spend it." 

The better than expected guidance sent short-sellers scurrying. JB Hi-Fi, which is the third most-shorted stock on the ASX, jumped as much as 7 per cent before closing up 1.5 per cent at $22.92.

"They were able to cycle really tough comps [comparable store sales] and the guidance is strong ... given the volatility of trading we see this as a very credible result," said JP Morgan retail analyst Shaun Cousins.

"The JB Hi-Fi result was solid in a challenging domestic retail environment," said Tim Carleton, of long-short manager Auscap Asset Management. Mr Carleton named JB Hi-Fi as his preferred long at the Sohn Hearts and Minds investment leaders conference last year.

"It demonstrated again why they are a best-in-class operator. Sales, earnings and cash flow were all strong," he said.

Mr Murray said JB Hi-Fi and The Good Guys would have to "work hard as always" and leverage their strengths in stores and online to defend market share "in a sensible and measured way".

The retailer is increasing floor space in JB Hi-Fi stores for mobile phones, gaming and connected technology such as internet-connected doorbells and security cameras by between 50 and 100 per cent to counter weak demand for software such as music and DVDs.

It is testing a new e-commerce platform designed to make online shopping easier and enable the company to analyse spending so it can start making direct offers to customers based on past purchases.

Online sales rose 21 per cent at JB Hi-Fi but fell 2.4 per cent at The Good Guys due to weaker sales on eBay, where sellers have been discounting heavily to compete with Amazon.

JB Hi-Fi's interim financial results.  

To further differentiate itself from Amazon and online-only rivals, JB Hi-Fi has also started trialling services such as television installation.

At the same time the company is aiming to reduce costs by simplifying its supply chain - merging the JB Hi-Fi and Good Guys' support centres into a single site at Southbank in Melbourne - and benchmarking suppliers to identify underperformance and get better deals.

Revenue in the six months ended December 31 rose 4.2 per cent to $3.84 billion as six new stores augmented solid same-store sales growth in Australia and New Zealand.

Earnings at JB Hi-Fi Australia rose 4.5 per cent to $192 million as total sales rose 4.7 per cent to $2.6 billion and same-store sales by 3 per cent.

Same-store sales growth slowed to 2.8 per cent in the December quarter from 7.8 per cent in the year-ago period and slowed again in January, to 1.5 per cent, less than half the 4.8 per cent growth in January 2018.

JB Hi-Fi New Zealand returned to profit under new managing director Cherie Kerrison, earning $NZ1.1 million as total sales rose 5.8 per cent, same-store sales by 12.6 per cent and online sales by 65 per cent after the launch of a new platform in 2017.

At The Good Guys, which is run by former JB Hi-Fi CEO Terry Smart, EBIT rose 4 per cent as margins stabilised and sales rose almost 3 per cent, buoyed by two new stores and demand for French-door refrigerators, washing machines, large-screen televisions, stick vacuum cleaners and computers.

Same-store sales growth accelerated to 1.9 per cent in the second quarter from 1 per cent in the September quarter and were up 0.3 per cent in January after falling 4.7 per cent in January 2018.

JB Hi-Fi lifted its interim dividend by 5¢ to 91¢ a share, payable on March 8.

Models Victoria Lee, Gemma Ward and Jessica Gomes strut their stuff in front of the influencer crowd during David Jones' Autumn/Winter 2019 collections launch at The Void, MONA in Hobart this week. Sarah Rhodes

On Tuesday, guests nibbled on confit Tasmanian salmon, slow-cooked Robbins Island sirloin and a decadent whisky, chocolate and berry dessert over lunch at the Museum of Old and New Art before watching models Jessica Gomez and Victoria Lee strut their stuff at a fashion parade at MONA's sandstone Void bar.

The party continued on Wednesday, when guests were treated to vitamin smoothies, massages and meditation at MONA's Faro restaurant and checked out the retailer's new food appliances and homewares before returning to the mainland on Wednesday night.

David Jones CEO David Thomas resigned on Thursday, the fourth CEO to depart in less than five years. He was notably absent from the Hobart event. Janie Barrett

It is understood a small settlement was paid to the unidentified complainant, who is believed to be a member of David Jones' visual merchandising team. 

There was no admission of any liability or wrongdoing by Thomas. Settlement payments are often made for a variety of reasons, including to avoid the cost of litigation.

Thomas is not the only senior David Jones executive to be parting ways with the retailer.

Regional chief financial officer Ashley Gardner is leaving at the end of the month following a management restructure and won't be replaced, while chief people officer Karen Lonergan is leaving to join Stockland Group in March.

Guests of David Jones enjoyed lunch at the Museum of Old and New Art as part of the two-day 'Art of Living' promotion. Mark Nolan

Their departures follow tough Christmas-New Year trading, when David Jones' same-store sales growth tanked, and reports of a $50 million blow-out (which David Jones denies) in its $400 million refurbishment of the flagship Elizabeth Street store in Sydney's CBD.

The venerable 180-year-old department store arguably is faring better than its cash-strapped rival Myer, which has shed another 100 middle-management and store jobs last month in an attempt to cut costs and keep banks at bay.

However, David Jones has failed to deliver the profit boost Woolworths was hoping for when it outlaid $2.1 billion for the grande dame of Australian retailing in 2014.

After a promising start, David Jones profits have more than halved since the takeover, falling from $161 million in 2015 to $63 million last year, with further falls expected this financial year. Woolworths had originally forecast earnings growth from David Jones of between $130 million and $170 million by 2019.

Another year, another CEO

The retailer has now lost four CEOs in less than five years: Thomas, John Dixon, Iain Nairn and Paul Zahra. 

The next senior executive departure could be Woolworths chief executive Ian Moir, who has made big promises to shareholders about the value that would be created through the David Jones takeover and merger with the Country Road Group.

South African investors are unhappy with Woolworths' and David Jones' performance and have been calling for heads to roll after a 50 per cent fall in the Woolworths share price in two years.

Asief Mohamed, chef investment officer at Aeon Investment Management, doubts Woolworths will earn a satisfactory return on its investment.

"We are indeed disappointed with the David Jones acquisition, as management expectations and guidance has disappointed," Mohamed tells AFR Weekend.

"Woolworths management generally continues to surprise to the downside. The 7 billion rand ($712 million) impairment of David Jones is testimony that Woolworths overpaid for David Jones," he says.

"We are doubtful that satisfactory returns will be achieved on a sustainable basis on the original purchase price of David Jones."

Mohamed says Woolworths needs to deliver a few consecutive quarters of better-than-expected results before it can be trusted again and regains investor confidence.

"There are some green shoots in David Jones in the latest results with the revenue decrease now abated."

Merger rumours debunked

However, he is not counting on a merger of David Jones and Myer – proposed by an increasingly desperate Myer board in late 2013 but rejected by David Jones – to resolve the problems confronting the two department stores, which are losing market share to specialty and online retailers.

"A merger of Myer and David Jones is not our base case. We believe such a merger to be unlikely unless the price dynamics are significantly in favour of Woolworths," he says.

Cassie Treurnicht, portfolio manager at Gryphon asset management, says Woolworths bought David Jones at the top of the retail cycle and paid too much, pointing to the $712 million goodwill writedown last year, which dragged Woolworths into the red for the first time in more than decade.

"We believe they overpaid for it – not only overpaid, but you don't buy at the top of the cycle," Treurnicht says.

Woolworths has also made mistakes, he says, pointing to a failed private label and pricing strategies, and needed to get basics right before splashing more cash.

Treurnicht doubts Woolworths will make a decent return from the $400 million being spent refurbishing the Elizabeth Street store, which has been largely funded by the sale of DJs Market Street store nearby, but says Woolworths is in too deep to start pulling back on capital expenditure.

"There are signs [David Jones sales] are stabilising but they need to spend with their eyes wide open," he says. "It's unfortunate but they're so far down this path they don't have a choice but to make something of it."

US-based etailer Revolve has upgraded its service proposition to Australia, with a four-prong approach.

The etailer has now introduced a free return service to the market, with a host of local events planned to celebrate the launch.

The move will supplement other services such as ugraded free express shipping, a toll free customer service number and pricing shown and charged in local currency. 

The platform offers over 500 designer labels and counts Australia as its top international market by 2018 net sales.

Revolve international vice president Kai Li said it is always looking to exceed expectations.

"It is extremely challenging to deliver this promise on a global scale so we are thrilled to lead the way by offering free returns in our furthest market.”

Revolve will celebrate the launch by hosting over 10 industry influencers for a week-long celebration split between the Whitsundays and Sydney.

The influencers include Shanina Shaik, Natasha Oakley, Devin Brugman, Aimee Song and Elle Ferguson.

Private industry events include a welcome party on The Island, a takeover of Bondi Icebergs, an event with Australian brand Spell & The Gypsy Collective, a beach party at Watsons Bay Boutique Hotel and more.

Revolve was on track to clock $1 billion in sales last year.

The struggling Australian retail sector is emerging as a private equity hotspot and deal makers expect activity to remain strong, led by firms keen to turn around major brands.

Retail sales in Australia have remained sluggish in the past few months and the most recent figures for March showed zero growth for that month.

Spending on clothing and ac­cessories, household goods and department stores all slowed during the month and economists have warned that a sudden jump in sales is unlikely.

However, private equity funds have poured more than $1.5 billion into the retail sector in just a few months and are expected to remain active buyers.

Figures compiled by The Australian showed that in the past six months at least six major retail deals involved private equity funds buying out companies.

The largest transaction, involving skin and hair care manufacturer BWX, emerged last week when Bain Capital teamed with the company’s management to offer $860 million for the firm. The offer was made at a 50 per cent premium to the company’s last price on the ASX.

The deal came a fortnight after Noni B and its major shareholder Alceon paid $31m for a portfolio of five brands from the embattled Specialty Fashion Group.

The Australian Private Equity and Venture Capital Association (AVCAL) estimates that last year funds invested $720m in consumer good and retail businesses, which accounted for 19 per cent of total spending.

KPMG mergers and acquisition partner Luke Lawrentschuk said the demand from private funds for Australian retail was expected to remain strong, even though the sales forecast in the sector were weak.

He said funds would be keen to buy Australian business that could be easily expanded and in sectors favoured by consumers.

“There’s been a track record in Australia of successful retail deals being carried out. I think the business models of companies or brands which are being bought is very important,” he said.

“They need to be relatable, they need to be easy to understand, the business model should not be complex and they should be able to be scaled up.

“That’s the play book of private equity.”

Mr Lawrentschuk said he believed that most retail-focused private equity investment in the future would be in lifestyle, entertainment, and food and nutritional product firms.

In New Zealand, Comvita, which manufactures manuka honey, last week revealed it had received a takeover offer from a mystery bidder but it had fallen through after the parties could not agree on price.

Mr Lawrentschuk said the number of funds active in Australia was higher now, as the local private investment industry had matured.

“There is a lot of dry powder in Australia in private equity because there is a lot of money that has been raised,” he said.

“The private equity industry has gone through a number of stages. There were a large number of very big funds that had developed five to 10 years ago.

“Now there are a lot of smaller funds which have been set up by people who have left those bigger organisations.”

Allens partner Tom Story said Australian fashion labels were also increasingly likely to be on the radar of private buyers keen to expand the businesses overseas.

In the past two years, Collette, Tigerlily and swimwear designer Zimmermann stakes were sold to private equity buyers.

Mr Story said he thought it unlikely that private equity buyouts of “bricks and mortar” retailers like Myer or David Jones would be on the cards, primarily because of the high property leasing costs involved.

However, he said future investment would be targeted.

“I think a big buyout fund would find it very challenging buying into traditional retail,” he said.

“There’s a range of retailers that have found it very tough but there are aspects of retail that are very attractive to turnaround-type or distressed-asset investors.

“There has been success in buying high-end fashion brands ... the buyers have looked to expand into Asia and the US and that has worked where there’s been a very successful brand.”

Makeup company Napoleon Perdis has entered into voluntary administration after several months of trying to sell the cosmetics business fell flat.

All stores are continuing to trade, as administrators assess whether the business can be restructured or if a buyer is found.

Directors in the company today appointed administrators Simon Cathro, Chris Cook, and Ivan Glavas of Worrells Solvency Accountants today.

“We expect the appointment will generate significant interest in the sale of the business,” Mr Cathro said.

Accounts filed with ASIC reveal the company has been under pressure for a number of years, with the latest figures filed showing a $154,808 loss for the 2015 fiscal year and a $1.6 million loss the year prior.

The company’s founder of the same name said the brand is still in high demand and that a restructure would put it in a prime position to continue to evolve, either through continued trade or in a sale.

“My family and I are 100 per cent committed to achieving the best outcome for all stakeholders,” Mr Perdis said.

“We are fortunate that throughout our business, we have staff and teams who have not only underpinned the business success, but who are our extended family.

“Their unwavering contribution will undoubtedly pave the way for the successful and strategic trade on.

“As we work towards our goals, we ask customers, suppliers and other interested parties to continue with their valued support of the brand.”

Mr Perdis is an internationally renowned makeup artist who has appeared on a number of reality TV shows.

His makeup chain first opened its doors in 1995 and now has 56 stores nationally, as well as an exclusive agreement with pharmacy chain Priceline.

Mr Perdis opened the renowned Napoleon Perdis Makeup Academy in Sydney in 1993, which has educated over 25,000 students.

Priceline vouched its support of the business during the administration process.

Last year, Napoleon Perdis pulled out of David Jones after 14 years and stripped products from more than 250 independent chains and salons, as part of a new strategy.

The company decided to stick with Myer.

A report by IBISWorld released earlier this month concluded that conditions in the cosmetic and toiletry retailing industry had been challenging over the past five years, partly due to the mature and saturated nature of the market.

“Rival external retailers, including bricks-and-mortar stores and a growing number of pure-play e-tailers, have negatively affected industry retailers’ sales,” the report said.

“In particular, supermarkets and online discount cosmetics stores have taken advantage of variations in consumer sentiment and associated shifts in discretionary spending over the period.”

Worrells said that the company’s extensive structure, distribution network and stockist agreements would mean that establishing its financial position is a complex process.

The stores would be closed for stocktake today and reopen for business tomorrow, with an expected sale campaign occurring.

The administrators are expected to meet with the company’s creditors in the coming days.

The collapse of the beauty business follows the entry of foreign-owned cosmetics stores such as Sephora (owned by French giant LVMH) into the Australian market in recent years.

Among the broader retail market, recent entrants including Swedish department store H&M, Spanish fast fashion chain Zara and Japanese department store Uniqlo are thriving in the local market as other stores wither.

Brands including Topshop, Marcs, David Lawrence, Rhodes & Beckett, Roger David and Oroton have entered into administration recently, some shutting their doors for good.

Retail spending over Christmas was “fairly weak” according to the National Australia Bank as spending was dragged forward by the increasing popularity of Black Friday and Cyber Monday sales, as stagnant wages growth and sliding property prices have made shoppers more reluctant to spend money on discretionary items.

It reinforces fears that the nation’s $310 billion retail sector is in for a horror 2019 after a downturn in sales for the critical Christmas and New Year trading period will leave many retail balance sheets stretched, with men’s fashion chain Ed Harry already collapsing and others likely to follow.

The NAB Cashless Retail Sales Index, released yesterday, rose 0.9 per cent in December on a month-on-month basis, up from a 0.4 per cent (revised) increase in November. However, NAB data mapping suggests that the official ABS measure of retail sales will record a negative in December, forecast to be down 0.3 per cent.

“These results suggest that retail spending for Christmas 2018 was fairly weak,’’ the NAB said.

“While some Christmas spending was brought forward to November by way of the ever more popular Black Friday and Cyber Monday sales, the reality is that consumers were reluctant to spend over Christmas and that underlying spending is lacklustre, underlined by a number of retailers starting the Boxing Day sales before Christmas itself.”

There were a number of factors now pinching consumer spending, especially over Christmas when shoppers usually are more liberal with their spending patters.

“Low wage growth, high personal debt levels and a weakening housing market — particularly in Sydney and Melbourne — have made consumers reluctant to spend on non-essentials,’’ said NAB chief economist Alan Oster.

“The Australian economy is still growing, although we revised down our GDP growth forecasts somewhat last month, as wealth effects of lower house prices and slower housing construction bear more on the outlook. We now no longer expect any movement in the cash rate until the second half of 2020.”

Mr Oster said consumers were also changing the way in which they spent their money, directing spending to other sectors and away from traditional areas once favoured over the holiday season.

“Furthermore, consumer preferences continue to trend towards experiences at the expense of traditional consumer goods. Cafes, restaurants and takeaways remains the strongest performer on a year-on-year basis, followed by food, while department stores, clothing and footwear, household goods and other retailing are growing much more slowly.”

These forces now awash in the retail sector have been evident in the spate of profit warnings and downgrades from retailers since the start of the year with Kmart, Kathmandu, PAS Group and Gale Pacific all blaming a downturn in sales for weaker earnings outlooks. Upmarket department store David Jones last week revealed that its sales growth had slowed almost to a complete halt in the months leading into December.

The NAB Cashless Retail Sales Index was up 9.9 per cent year-on-year in December. Year-on-year growth is positive for all six NAB Cashless Retail Index major industry groupings. Cafes, restaurants and takeaways remains the fastest growing category (15.9 per cent year-on-year), followed by food (10.0 per cent), department stores (7.4 per cent), clothing and footwear (7.1 per cent), household goods (5.0 per cent), and finally other retailing (4.7 per cent).

Out-of-control rents and reduced sales volumes are placing pressure on the profit margins of the nation’s listed retailers, with a growing number of businesses planning to close loss making stores in the face of the crippling headwinds, says a new survey from Macquarie Wealth Management.

Indeed, underlining the concern over how sky-rocketing rents are crunching profits, almost one quarter of retailers surveyed said they planned to decrease shopping centre space over the next 12 months by shrinking floor space.

In a new report to its clients, the financial adviser also argues that a time when the consumer backdrop is challenged by a range of factors there is “a lot to worry about” as households remain cautious about the year ahead.

Macquarie Wealth Management said its retailer survey (taking in around 2300 stores) showed that Christmas was not jolly and things could get worse as 49 per cent of retailers indicated trading was negative for retail sales (versus 28 per cent a year ago), with apparel particularly weak, food mixed, and electronics a bright spot reporting stable conditions.

But it was then the survey dug deeper to see what forces were pinching profit margins for Australia’s retailers that the survey revealed excessive rents had risen to become one of the most painful areas for retail tenants.

“We asked each retailer to list the key factors currently contributing the greatest pressure on margins. Amongst all respondents, reduced sales volumes were cited in around 33 per cent of responses causing the greatest pressure on margins, compared to rent at 26 per cent and wages at 22 per cent,’’ Macquarie the report said.

But the issue of excessive rents has rocketed up the charts for retailers in terms of the greatest pressure on profits, with rent only featuring as a factor for 11 per cent of those surveyed in 2017. For large retailers the high cost of rent ranked equally with the sales downturn (25 per cent) for causing the most margin pressure at the moment.

The survey found that 8 per cent of retailers are looking to close down loss making stores, up from no respondents last year, as they scurry to slash their rent bills.

“Retailers are far less bullish on their space requirements today than they were five years ago, when we first conducted this survey. Only around 7 per cent of large retailers currently intended on increasing space on a one-year view.

“This compares to around 61 per cent back in 2014. In fact, 24 per cent expect to decrease space over the next 12 months.’’

Some shopping centre landlords were acting by offering rental incentives to some retail tenants.

“A key change from when we first completed this survey in 2014 is the level of incentives paid by landlords to tenants. In 2014, 12 per cent of respondents stated landlords were paying incentives of over 10 per cent of rent. This has now changed to 21 per cent of tenant’s receiving an incentive of over 10 per cent.’’

Shopping centres are feeling the hurt of reduced traffic at their sites which is encouraging many retailers to demand lower rents. Last week one of the nation’s leading corporate restructuring experts, Ferrier Hodgson partner James Stewart, warned that the collapse in shopping centre traffic in the two weeks before Christmas is the worst he has seen in more than 20 years.

Shoppertrak, an analytical tool widely used in the retail sector, particularly by shopping centre landlords, showed foot traffic in the last two weeks of 2018 was down 15 per cent and 23 per cent respectively.

In November retail billionaire Solomon Lew, whose Premier Investments has hundreds of stores under brands such as Just Jeans, Portmans and Peter Alexander, said his company would close down its Dotti, Smiggle and Just Jeans stores in Chapel Street, adding to the more than 40 empty shops along the prime Melbourne shopping destination.

Mr Lew said at the time of announcing the closures, “If landlords don’t understand that they need to reduce the rent in the competitive landscape, well then we will just vacate stores.’’

In March last year Mr Lew’s top fashion retail CEO Mark McInnes flagged Premier Investments would escalate closures if it did not get fair rent deals.

“In particular, we sought, and we continue to seek, rents in line with centre performance,” the Premier chief said.

Super Retail Group has appointed Anthony Heraghty as CEO, effective 31 March 2019. He will replace outgoing chief executive Peter Birtles.

Heraghty is currently the group’s managing director of outdoor retailing, and is responsible for the BCF, Rays, and Macpac businesses.

In a statement to investors, Heraghty said he aims to modernise Super Retail Group to compete in a changing retail.

“With changing consumer expectations, we are being challenged to innovate and modernise our business to ensure we are fit to compete in the even more competitive retail environment of tomorrow,” he said.

He added that he plans to build on the group’s culture of teamwork and team member pride to position the business to grow and deliver for shareholders.

“In an era where customers have greater demands and choice than ever before in what, where, when and how they want to buy, our customer-centric approach and engaged team can help differentiate Super Retail Group and drive the next phase of growth around our four core brands,” he said.

Super Retail Group chair Sally Pitkin called Anthony a trusted and respected leader with a track record of delivering improved business performance and a commitment to and understanding of customer needs.

“Fresh thinking, embracing innovation, and harnessing data and technology are trademarks of his leadership,” she said.

Birtles will work with Heraghty over the coming months to ensure a smooth transition, and will present the group’s first half results in February.

“I can assure you that Super Retail Group is in good hands,” Birtles said.

“I’ve worked closely with Anthony for four years, he’s a strong and experienced leader who has helped to modernise the business. Not only does he have a terrific grasp of the business but he knows what drives our customers and understands what we can offer them.”

Birtles said he was proud of the financial success of the business during his tenure, and attributed this success to the engagement of Super Retail Group’s team members.

“I remain very optimistic about the future for Super Retail Group, and will be working hard to ensure a seamless handover,” he said.

Super Retail Group earnings before interest and tax has seen a “near seven-fold” increase under Birtles leadership, which has spanned 18 years – 13 of which were spent as group managing director and chief executive.

Mr Birtles has been CEO at the group for the past 13 years, and announced his retirement in October.

With no successor in place, that announcement spooked investors and sent its shares plunging 21 per cent over five days, from $9.35 to $7.38.  The stock has slid further since then, and on Monday closed at $6.90.

Super Retail's chair Sally Pitkin said a global search had identified a number of candidates, but it was determined that Mr Heraghty was best placed to "lead the next era of growth for the Super Retail Group".

Mr Heraghty joined Super Retail in 2015. He previously held senior roles at Bonds' owner Pacific Brands, and oversaw the evolution of the iconic underwear brand from a wholesale operation to a direct-to-consumer retail business.

Prior to that he was the global marketing director at Foster's Group.

"With changing customer expectations, we are being challenged to innovate and modernise our business to ensure we are fit to compete in the even more competitive retail environment of tomorrow," Mr Heraghty said.

“I’m excited about the opportunity to navigate a great Australian company through the radical changes rapidly reshaping the retail sector."

Mr Heraghty drove the acquisition last year of New Zealand outdoors brand Macpac, which is now being merged with its existing camping supplies chain Rays.

Mr Heraghty will take a slight pay cut from his predecessor, with a base salary of $1 million a year compared to Mr Birtles'  $1.23 million, with annual short- and long-term bonuses of up to $1.6 million.

Mr Birtles will stay on to present the group's first-half results in February.

The brand has attracted a cult-like global following, selling in 31 countries. It started in Australia in 1996 by ski enthusiast Brad Duffy, with its headquarters now in Switzerland.

"My management team and I have left no stone unturned in an effort to avoid this,” Mr Fuller said in his statement.

“I am enormously regretful and sad that it has got to this point. Even as late as yesterday [ January 16] it looked like there was an option for avoiding this action but events conspired against us and left us with no option at all.”

Mr Fuller pointed to 2008, when the global financial crisis hit, that led to the company’s eventual downfall this year.

He said he sold a portion of SKINS in the midst of the GFC to a private equity firm and added he “made a lousy deal”.

And in a bid to get out of that arrangement once the crisis ended, the company borrowed heavily to buy out the private equity shareholder.

“To my enormous regret, those borrowings have become unsustainable and while we have been working for some time now to try to avoid what is happening today, in the end there was no choice,” Mr Fuller said.

Mr Fuller positioned himself as an activist, advocating for the stamping out of corruption within the sports industry and backing a range of causes, including the #RainbowLaces campaign that tackles homophobia in sports.

He claimed the company’s brand positioning was around “changing the world through sport”.

“It’s what we set out to do; to help level the playing field on and off the field through championing important issues and holding sport to account for being everything we love about it - competitive, fair, based on teamwork and good sportsmanship, dedication, commitment, integrity,” Mr Fuller said.

“They were all traits that were - and are - important to us. We worked to help bring sports back to its basic tenets, fuelled by the spirit of pure competition.”

The brand is expected to continue under new owners.

Mr Fuller thanked the staff who worked “diligently, astutely, loyally [and] tirelessly” and apologised for the insolvency.

“I am so, so sorry that this has happened and am simply devastated,” he said. “Please be assured that I have tried everything possible to avoid having to take this action today. Absolutely everything.

“In sporting terms, I left nothing out on the park.”