15 Jun, 2021
Catch launching first Sydney warehouse in fulfilment expansion
Inside Retail

Catch is growing its logistics network with a new fulfilment centre to be built in Moorebank in south-west Sydney.

A 36,000 square metre plot will hold the business’ first DC outside of Victoria, which aims to help Catch keep pace with the impressive growth in e-commerce seen since the pandemic begun, with Australia Post having seen online purchases jump 57 per cent year-on-year.

The site is scheduled to open in the first quarter of 2022, and will be Catch’s most technologically sophisticated distribution centre to date.

“We are thrilled to be opening our first fulfilment centre in New South Wales, expanding our national footprint and helping our customers get the products they need when they need them, right across Australia,” Catch managing director Pete Sauerborn said.

“The Sydney fulfilment centre will allows us to serve customers more quickly and efficiently, particularly in New South Wales and Queensland.”

The Sydney facility will further Catch’s automation efforts in its fulfilment centres, and will create advanced manufacturing, robotics and intelligent systems jobs in New South Wales.

Last year the business said it was adding over 100 autonomous robots to its Victorian distribution centre – the largest rollout of autonomous robots across Australia and New Zealand, and a decision which unlocked the ability for Catch to manage an additional 80,000 product lines.

9 Jun, 2021
Stockland gets green light to develop first data centre
The Australian

Stockland is set to build its first data centre as part of the listed property company’s ambitious M_Park  development in Sydney’s tech hub of Macquarie Park.

M_Park also includes a new headquarters for pharmaceutical giant Johnson & Johnson and two other office buildings spread over the 30,000sq m site.

The NSW Government rushed through approval for the data centre, which it said has an end value of $264 million, as a State Significant Development (SSD).

“Fast-tracking data centre assessments are a key part of the NSW government’s planning reforms,” said Planning Minister Rob Stokes.

It’s understood the five-storey data centre will be a hyper-scale facility leased to a major cloud computing provider, believed to be Amazon Web Services.

Stockland declined the opportunity to comment yesterday beyond confirming it has “obtained SSDA approval for the construction and operation of a data centre at our M_Park site.”

It added: “Stockland has entered into a heads of agreement executed with a data centre operator for a building at M_Park.”

According to a scoping study commissioned by Stockland, the facility includes 6300sq m of data halls, 3215sq m office space with more than 13,000sq m set aside for ‘electrical and mechanical services’.

There will be 10 diesel generators, two on each level, and capacity to store 360,000 litres of fuel in a series of underground tanks.

Construction is expected to start September and be finished by March, 2023.

Planning Minister Rob Stokes has prioritised approvals for data centres, allocating extra resources and lowering the threshold for them to become State Significant Developments from $50 million to $30 million.

The data centre will occupy almost 50 per cent of the three hectare M_Park site at the junction of Khartoum Road and Talavera Road in Macquarie Park, which is attracting a lot of development interest.

Demolition has already started elsewhere on the M_Park site to make way for the three new buildings comprising the commercial precinct.

Apart from the new Johnson & Johnson headquarters, Stockland is building a 10-level office tower at 11 Khartoum Road with 16,000sq m of lettable space, plus a third structure, the details of which are not available.

Stockland also acquired four hectares next door at 1-5 Khartoum Road last year in a put and call option with Johnson & Johnson Medical Pty Ltd, which has an office on the site.

The new head office for Johnson & Johnson at M_Park will bring together 820 employees from around Sydney.

Louise Mason, Stockland’s chief executive commercial property, said at the time that Macquarie Park is a key strategic focus for the business.

“The transaction aligns with our broader strategy to up-weight our workplace and logistics portfolio,” she said.

“Macquarie Park is a powerhouse underpinned by pharmaceuticals, health, technology, government and education and is predicted to become NSW’s second largest economy in the coming years.”

She said the combined sites offer a “potential” consolidated development opportunity worth excess of $1.5 billion.

9 Jun, 2021
Amazon launches resale platform in Australia
Inside Retail

Amazon Australia is getting into resale with the local launch of Amazon Warehouse – the online giant’s storefront for pre-owned and open-box items across a range of products.

The items on Amazon Warehouse will be checked over and fulfilled by Amazon staff, can be eligible for free delivery for Prime members, and will be discounted.

“Items are returned to Amazon for many reasons – sometimes a product is just not what a customer is looking for, or perhaps there’s a cosmetic defect or the packaging is damaged,” said Amazon Australia country manager Matt Furlong.

“These items can’t then be sold as new, but are still great quality and are in good working condition. Amazon Warehouse gives these products a new lease on life and offers customers an even wider selection to choose from.”

Items will be graded on a spectrum from “Like New”, “Very Good”, “Good” and “Acceptable”, which determines discounting, and will be available across 30 categories, such as smartphones, laptops, books, apparel and toys, among others.

According a 2020 resale report from ThredUp, the online second-hand market is expected to grow from $7 billion in 2019 to $35 billion in 2024.

7 Jun, 2021
Global Fashion Group worldwide operations hit carbon neutrality
Inside Retail

Global Fashion Group has achieved carbon neutrality across its operations in Australia, New Zealand, Southeast Asia, Latin America and the CIS.

The group now uses 100 per cent renewable energy across its nine fulfilment centres across the globe, used by subsidiary businesses such as The Iconic and Zalora, while offsetting any carbon generated by purchasing high quality carbon credits from renewable energy projects across China, India and Brazil.

Australia’s The Iconic led the way in getting the business off the grid, shifting its own operations to a renewable energy provider in 2020, while fulfilment centres in other parts of the world purchased Renewable Energy Certificates to offset their own operations.

“We’re incredible proud to have achieved this sustainability milestone as a global group and consequently be the first major ANZ multi-brand fashion, sports and lifestyle retailer to claim carbon neutrality in our own operations,” said The Iconic chief executive Erica Berchtold.

“Being a responsible corporate citizen is integral to who we are and to be part of a group equally committed to pioneering environment progress adds significant impact to achieving a more sustainable future for not only The Iconic, but our broader ANZ retail ecosystem.”

GFG’s chief sustainability officer Jaana Quaintance-James said the announcement is the business’ way of celebrating World Environment Day, which takes place tomorrow, Saturday 5 June.

“We have reached an inflection point as a global community whereby the impetus for the transition to a low carbon economy is undeniable,” Quaintance-James said.

“We recognise there is much work ahead of us to reduce our footprint and therefore formalising our carbon mitigation strategy is an important step to support our transition. While the purchase of offsets and renewable energy certificates will not distract us from true reduction efforts, they mark an important milestone in GFG’s journey.”

Zalora chief executive Gunjan Soni said the business is proud to be a sustainable leader in Southeast Asia, and that this announcement sets a precedent to what is possible and responsible for businesses.

“We are so proud to be a part of a group that recognises the importance of our role in helping to fight the climate crisis together,” Soni said.

“As the leading fashion and lifestyle e-commerce player that serves millions of shoppers across Southeast Asia, we recognise the importance of shaping a sustainable fashion ecosystem in the region.”

7 Jun, 2021
Some Australian tech workers are demanding massive payrises as closed borders kneecap the local economy
Business Insider
  • Australian developers are negotiating as much as six-figure raises as the battle for tech talent goes up a gear.
  • Closed international borders are seeing companies resort to all manner of incentives to try to fill vacancies, with some engineering roles remaining unfilled almost four months on since they were posted.
  • Without a fully vaccinated population and the movement of migrants into the country, many in the industry expect the skill shortages will get worse and fear Australia will become less competitive as its digital economy falls behind.

Australia’s closed borders might have saved the country from the worst of the pandemic, but the hardline measure hasn’t come cheap, with the true cost – to individuals, businesses, and entire industries – yet to be counted.

While most Australians might be upset their European summers are still at least another year away, it is the free movement of skilled workers into the country that is already beginning to hurt the economic recovery, with businesses unable to find the people they need to grow.

“The border closures are preventing top talent from entering our markets so everyone is fighting for a minute amount of local talent, resulting in huge salary increases,” businessman and rich lister Nick Bell told Business Insider Australia.

With Australia having long-suffered skill shortages when it comes to tech, Bell says job candidates are now demanding salaries 50% higher than before the pandemic.

As a result, developers are securing raises overnight worth $50,000 a year and heaping budgetary pressure on businesses as they emerge from 2020.

Other industry sources told Business Insider Australia that in some extreme cases six-figure raises are being thrown around.

That is of course if businesses can even find workers in the first place. Bell, who owns 12 different digital agencies, says he is advertising widely and across social media, engaging multiple recruiters and even offering $5,000 referral fees in a bid to find people to continue expanding.

Baraja is an Australian startup developing systems for autonomous vehicles. While it managed to raise $40 million in March, it says employees are proving difficult to find.

“We’re essentially doing things that haven’t been done before which does mean we have a very small and select pool of talent to draw from worldwide,” co-founder and CEO Federico Collarte said.

“In addition, we’re a fast growing business and our growth is reliant on finding the right people.”

It is struggling to fill 21 different roles in Australia right now, with systems, software, and optical engineers in such short supply that some roles have been sitting vacant for almost four months.

With everything now digitised, huge industries from hospitality to banking are now feeling the pinch. Take online marketplace FoodByUs, which connects restaurants with wholesalers, and has been growing as fast as they can hire.

“We’ve doubled our team in the past twelve months across our Sydney, Melbourne and Brisbane offices, and trying to get talent in Australia to support our growth has been really hard,” co-founder Ben Lipschitz said.

“We have a thorough process for hiring to ensure we keep getting the best talent but while the borders are closed the ‘best talent’ pool is way more limited than it ever had been.”

Australia could lose its global standing

It is clearly presenting a coup for tech workers who are now in positions to extract more than ever from prospective employers.

It is a distortion that could spread to other sectors as well, according to the Reserve Bank of Australia (RBA). The central bank anticipates that wages for most Australians aren’t likely to grow until overall unemployment is slashed to all-time lows, but that closed borders will produce pay rises not seen in years for a lucky few.

Money aside though, it does present another challenge even for those who can secure new workers.

“The outliers that would never really get pushed forward for jobs are now getting work in roles that they shouldn’t be,” financial services digital consultant Chris Tilling said.

The risk then becomes that businesses end up addled with expensive workers who can’t deliver anyway, eventually producing inferior digital products.

But beyond that, Tilling sees closed borders, as a result of a bungled vaccine rollout, as creating a “missed opportunity” for Australia.

“Australia innovates really well but we don’t commercialise it as well as other countries. But the ones we compete with directly are those like Israel that are pretty well inoculated now,” he said.

“The challenge we have is that if we don’t open up then we could end up lower down the white collar food chain.”

A lack of talent is going to be felt in Australia for years to come

The longer the borders remain closed, and the longer it takes to vaccinate Australia more broadly, the more encumbered Australia is going to become.

According to a Google study conducted earlier this year, 42% of Australian businesses reported that local innovation was mainly being held back by a lack of human capital, with the figure expected to surge higher this year.

“Digital transformation and Cloud adoption is more important than ever before as the economy and markets shifted in the wake of COVID-19, but one of the biggest challenges that Australian enterprises are facing is a shortfall of skilled talent,” Google Cloud ANZ director of customer engineering Matt Zwolenski said.

The shortages predate any public health scare, with the local industry struggling to keep up with the demands of business, with security worryingly being one of areas most let down. To combat it, Google has launched a Skills Challenge to offer no-cost training to those looking to upskill.

“One major reason they cite is the rate of technological change is outpacing skills development,” Zwolenski said.

“While many organisations have training programs in place, they aren’t robust enough to keep up with the rate of change in technology. And a lack of skilled talent is not only a barrier to innovation, many organisations will take a financial hit as a result of skills gaps.”

The failure to properly train Australian workers was likely a challenge that would have been better addressed years ago, but it’s not too late to start making amends.

Several industry figures told Business Insider Australia that more needs to be done to improve education opportunities in the country, as universities continue to lag behind.

It’s a challenge at least publicly recognised by the Morrison government which pledged $1.2 billion to the industry as part of its May Budget, including a $100 million digital skills package.

“We must keep our foot on the digital accelerator to secure our economic recovery from COVID-19,” the Prime Minister said at the time.

The handbrake for now appears firmly on though, with impact of those policies some way off. As businesses take who they can get, there may at least be a silver lining for some.

Boutique tech consultancy firm State of Matter says workplaces are not only having to do better in order to keep and attract the right people, but there are greater internal opportunities for those that stay.

“We’re doubling down on motivating, training and supporting our existing team members and giving them stretch opportunities, where as previously we might have looked to hire externally,” consultancy director Alex Lal said.

Others have something even more meaningful to gain.

“Right now, we’re actually looking to sponsor people that are already here and whose student visa status is about to change,” Tilling said.

“So we’re going through that process now to retain them because we don’t actually lose them altogether.”

4 Jun, 2021
Amazon CEO Jeff Bezos will officially step down on July 5. Here are the top 5 things to know about his replacement, Andy Jassy.
Business Insider

Amazon founder Jeff Bezos announced earlier this year that he was stepping down as the tech giant’s chief executive officer. 

And on Wednesday, Bezos told shareholders that he will officially leave the position on July 5, a “sentimental” date – the same day that Amazon was incorporated in 1994.

In a letter to employees, Bezos said he will transition to executive chairman and will focus on “new products and early initiatives” in the third quarter.

He will be replaced by Andy Jassy, the current CEO of Amazon Web Services, the company’s cloud platform.

Here are 5 things to know about the new CEO, based on what over a dozen current and former employees told Insider in interviews published in January.

Jassy has been at Amazon for about as long as Bezos has, 24 years to be exact.

Jassy joined Amazon in 1997, the same year the company went public. The 53-year-old built AWS from the ground up within the past two decades and became CEO of the cloud platform in 2016. Analyst Dan Ives described him to Insider in a previous interview as “one of the most powerful leaders not just within the cloud and tech sector but in the world of business.”

Jassy is a close confidant of Bezos.

Jassy served as a so-called “shadow” advisor to Bezos at one point, joining the chief executive in high-level meetings. In his letter to staff announcing his exit as CEO, Bezos said Jassy will be an “outstanding leader.”

Jassy is one of the highest-paid executives at Amazon.

He has raked in a total of more than $20 million within the past three years. In 2016 alone, Jassy earned over $36 million while Bezos made about $1.7 million in total, according to CNBC.

Jassy was reportedly considered for the role of CEO at Microsoft and Uber.

Ex-Microsoft CEO Steve Ballmer approached Jassy at one point about replacing him as chief executive of the company, a person familiar with the discussion told Insider’s Ashley Stewart and Eugene Kim. There was also a rumor that Jassy was considered to take over as Uber CEO after Travis Kalanick stepped down in 2017.

He’s outspoken in regard to political and social issues.

Jassy has spoken out against the police killings of Black Americans and in favor of court decisions to make it illegal to discriminate against members of the LGBTQ community, among other calls to action. Jassy has also spoken out against former President Donald Trump’s contempt for Amazon and helmed AWS amid the company’s decision to ban Parler, a social-media app popular among the far-right.

4 Jun, 2021
Amazon’s Australian growth beating expectations thanks to COVID
The Age
The Age

International retail behemoth Amazon’s expansion into the Australian market is running ahead of schedule, with the company expecting demand to continue at a pace even after months of COVID-boosted sales.

Craig Fuller, Amazon Australia’s head of operations, told The Age and The Sydney Morning Herald the business’ growth in the local market was beating expectations, with sales almost doubling over 2020 to top $1 billion for the first time.

“Our expansion plans, in terms of putting down a footprint ... has probably just been brought forward a little bit, but in terms of where we thought we’d be ... we’re a little bit ahead,” he said.

Amazon, which is a $US1.6 trillion ($2 trillion) business globally, has taken a slow approach to the Australian market, opting to grow its users gradually rather than blitz shoppers with massive marketing campaigns.

However, the COVID-19 pandemic and the associated boom in online shopping appears to have turned this approach on its head. Along with its soaring sales, the company has vastly expanded its fulfilment network in Australia, opening 11 new sites in the past 12 months.

“Those 11 buildings have really doubled our footprint,” Mr Fuller said. “We’re in all major capital cities...and we’re continuing to expand our delivery service across the regional cities of Australia.”

Amazon will also open its new 200,000 square foot robotic warehouse in Sydney later this year, which will house more than 11 million items and will be largely automated, though it will still rely on people to pick and pack orders.

COVID-19 has been a boon to almost every major online retailer over the past year, as locked-down shoppers shifted their spend online. However, as the country has begun to open up, some companies such as Adore Beauty and Kogan have reported a slowing in growth.

Mr Fuller said he didn’t see demand beginning to taper off yet, noting Australia’s overall penetration of online shopping, which hit around 16 per cent during 2020, still paled in comparison to other developed countries, with the executive believing there were many shoppers who have not yet embraced online shopping.

“The breadth of shopper base, that’s going to be sustained and that’s what’s going to help grow the business,” he said. “We think there’s a lot of opportunity left for online shopping in Australia to be a good complementary service to traditional brick and mortar type stores.”

Amazon will kick off its annual ‘Prime Day’ sales event on June 21 which offers a range of discounts on various products over a 65-hour period. Prime subscriptions have been another major driver of growth for Amazon locally, with revenue from the service almost tripling to $90 million across 2020.

31 May, 2021
Kogan shares slump 14pc after downgrade
Financial Review

Ruslan Kogan, the founder and CEO of online retailer, has urged shoppers to stock up on Christmas gifts now to avoid higher prices later in the year on new stocks of LED TVs and other products made with computer chips.

Mr Kogan told AFR Weekend he has warehouses full of stock waiting to be sold at discounted prices. Earlier on Friday the group slashed its earnings outlook, blaming miscalculations on inventory and higher warehousing costs.

“There’s never been a better time to be a customer. We have 31 warehouses chock-a-block full of inventory of high-quality product,” he said.

“From what we’re seeing in supply chains, LED TVs, are going to be more expensive at the end of the year than they are now. Panel prices are going up, and there’s a very widely talked about chip shortage as well – so [prices will be higher for] anything that contains computer chips.

“All of the market indicators are pointing to the fact that you should be doing your Christmas shopping right now, and buying products for Christmas today because they will get more expensive at the end of the year.“

Heavy discounting is a win for consumers but it puts retailers’ margins under more pressure and represents a loss for investors, who wiped $148 million off’s market capitalisation after the company warned its underlying operating performance would be worse than previously expected.

Adjusted earnings before interest tax, depreciation and amortisation for the year ending June 30 are likely to total $58 million - $63 million, an 11 per cent to 18 per cent miss against market expectations, the company said.

Hindsight is a wonderful thing. We can play it over and over and we would probably make the exact same decisions again.

— Ruslan Kogan, founder

The shares hit their lowest point this year, plunging 14.3 per cent to $8.70 on Friday. Mr Kogan felt the squeeze in his wallet with the value of his 15 per cent stake falling by more than $22 million to $138.9 million. bet heavily that the “once-in-a-century” demand created by the pandemic lockdowns would last.

Over the first half of fiscal 2021, doubled in size as consumers shopped online, and significantly expanded its inventory holdings. It also boosted its logistics footprint to 31 facilities from, many of them established in the last five months.

In late April, the online retailer that sells everything from electronics to running shoes to toys and pet products, said gross revenue climbed more than 32 per cent in the March quarter. This rate of growth was well-down on the boom half-year to December, in which revenue jumped 97 per cent to $638 million because of record pandemic spending.

After nine months of elevated consumption, the company had to make a call to be sure it had enough product, Mr Kogan said.

“Hindsight is a wonderful thing,” Mr Kogan said. “We can play it over and over, and we as a management team were looking at the situation, and we would probably make the exact same decisions again.”

Profitability has also been hit by the cost of options awarded after last November’s annual meeting, by $5.8 million in additional shipping charges as products sat in port longer, and higher warehousing costs.

There is also a provision of $5.1 million for the final payment tranches of Mighty Ape, which it acquired last December for $122 million.

The news implies the business is break-even on an underlying EBITDA basis in the fourth quarter, said RBC analyst Tim Piper.

“Some of the issues impacting margins and costs are transitory and will be resolved, however, we remain of the view FY22 earnings expectations are too high and expect material consensus downgrades,” he wrote in an analyst note.

A big concern was the current level of consumer demand that has moderated in recent months despite the heavy price discounting, promotional activity and elevated marketing costs, Mr Piper said.

The shipping issue was resolved in April, and does not expect any material issues to arise in future. Customer demand in the month carried over from the third quarter – but below the surging levels seen in the nine months ended December 31.

The price inflation and higher international shipping costs, combined with more promotions will crunch gross margins and has led to higher marketing costs.

“We’ve made the business better along the way, but when you’re dealing in an environment where consumer demand can swing in such quantum, it made it a difficult environment,” Mr Kogan said.

He added that the longer term fundamentals for the company remain attractive given Kogan’s position in the Australian and New Zealand online markets, and with online retail sales currently only accounting for a small percentage of total retail sales in both nations.

Mr Piper said the coming months look “challenging”, but working through the inventory backlog will help improve margins, and the end of demurrage costs implies the business is heading in the right direction.

31 May, 2021
Four tips on what women can do to enter (and stay in) the tech sector
Financial Review

Affinity, halo, maternal, likeability. These are four key biases standing between women and their ability to enter the technology sector.

Sarah Liu, managing director of leadership consultancy The Dream Collective, says women occupy just 17 per cent of all roles in the tech industry, suggesting the biases create significant barriers. Those barriers are so significant that to raise the number of women in the sector, employers and female job candidates must take heed.

“The company has the most responsibility because it’s systemic,” Liu says. “It’s structural. But the reality is that [women] need to navigate those biases. Women need to actually understand that when we come to that daily reality, we need to think: ‘How do I create opportunities?’ The scale of the problem needs to be met with the scale of the solution, which means we need to come at both ends.”

Liu starts by elaborating on the four biases.

Affinity bias refers to the tendency for employers to gravitate towards candidates with similar experiences and qualifications to them. Candidates might have completed the same trainee program or similar course. If a female candidate has followed a different career path, perhaps outside the tech sector, she is likely to be discriminated against.

The halo bias occurs when candidates are given credit for having graduated from a particular high-profile course or institution, or worked with a well respected company.

“Someone who has held a job at Google is immediately perceived as more qualified than someone coming from a software company that barely anyone knows,” Liu says. The halo effect can similarly be applied to companies such as Salesforce, Apple, Facebook and Amazon.

“The GAFAS [Google, Amazon, Facebook and Apple] have the halo effect,” Liu says.

The maternal bias refers to the assumption that when women have children, they will be less committed to their work. The same assumption is not applied to men.

Indeed, for men having a family can be considered to be a positive step because the perception is that it will encourage them to work harder. As a result, women tend not to be offered the same promotional opportunities, or more challenging projects.

The fourth bias, likeability, refers to the phenomenon that for women, success and likeability tend to be negatively correlated, but for men they are positively correlated. Successful women are too often viewed as intimidating or too much of a “go-getter”.

Speaking as The Dream Collective launches a program called SheDares to boost the number of females in the tech sector (by tackling both sides of the problem), Liu has four tips for women.

1. Experience

Remember that technology is evolving so quickly that entering the field late is not necessarily a barrier. People’s skills can quickly become out of date. Further, many roles in the tech sector are non-technical. “A lot of tech is actually about problem solving. A lot of our technology clients are looking for non-technical salespeople, because they can actually explain the technology in a way that’s understandable by the user,” Liu says.

2. Networks

Activate your networks, says the consultant. Having a referral or recommendation from a contact will help to overcome affinity bias and also help women to find out about the roles on offer. Some 70 per cent of roles in the sector are not publicly advertised.

“A CV in general is not what will make the biggest difference in women’s chance of getting hired or not, but rather, network and referral,” Liu says.

“Instead of creating the best CV, our recommendation is to improve your LinkedIn profile and activate your network contacts and proactively ask for referral opportunities as a priority.”

White women are 12 per cent less likely to receive a job referral than white men, while women of colour are 35 per cent less likely to receive a job referral than white men, Liu adds.

3. Story telling

Highlight the way in which your experiences and skills, say in problem solving, will help you to succeed in a given role.

Take a “top down” approach. Start with your reputation. This includes what you are known for because of the impact or results you have achieved. Next, talk about the skills that made these results possible and lastly, use the work experience and responsibilities you’ve had to validate your skills.

4. Be proactive

If you have taken a career break, talk openly about how you approached it and what happened when you re-entered the workforce.

Catriona Wallace, executive chairman of investment firm Boab AI, recommends that women challenge the reason behind questions such as what school or university you went to and who you know. Women should use the opportunity to promote their skills and experience, Wallace says.

Female candidates could also ask if a woman will be present at an interview.

Wallace is more concerned by the proportion of women who leave the tech sector and never return. She says 50 per cent of women in tech end up having a career change. The reasons range from tech companies having a lack of social purpose, to the lack of other women in the industry, the 17 per cent gender pay gap and the masculine environment.

Wallace argues that women faced with the first challenge should find ways to create a social purpose for their employer, if it is non-existent.

“Create a purpose around sustainability,” she suggests.

Other tips include forming a women’s network in the company so that women can support each other and demand to know the salaries of male counterparts.

12 May, 2021
Adore Beauty shares fall 19pc as guidance, customers fall short
Financial Review

Shares in Adore Beauty, one of the most-hyped floats of 2020, plunged 19 per cent after the online retailer’s full-year sales guidance fell short of market forecasts and the number of active customers appeared to fall.

In a trading update on Thursday, Adore Beauty, which floated last October, said revenue rose 47 per cent to $39.4 million in the March quarter, after surging 85 per cent to $96.2 million in the December-half.

Active customers – those who have made an order in the last 12 months –rose 69 per cent to 687,000 in the nine months ending March, compared with active customers of 777,000 in the 12 months ending December.

At first glance, the number of active customers appeared to fall as shoppers started returning to bricks and mortar stores. However, after queries from analysts and investors, Adore said the latest numbers did not reflect a full year of trade and the 12-month figure for active customers – which are key to top-line sales growth – would be released at the annual results in August.

New chief executive Tennealle O’Shannessy, who took the helm from founder Kate Morris shortly before the initial public offering, said revenue for the 12 months ending June was expected to rise between 43 per cent and 47 per cent.

The guidance implied full year revenue between $173 million and $178 million, falling slightly short of consensus forecasts around $188 million.

The e-tailer’s previous guidance was for full-year revenue to rise at a higher rate than the rate of growth achieved pre-COVID-19. Sales rose 39 per cent in 2019 and by 65 per cent to $121 million in 2020.

Ms O’Shannessy gave no profit guidance but said full-year earnings would reflect increased investment in marketing to drive revenue growth and gain market share, as well as the full-year effect of investments in new staff in the December half.

“The business is making strong progress on our strategy to leverage our online market leadership to further capture market share in a large and growing market,” Ms O’Shannessy said.

“We continue to make disciplined investments in our mobile app, loyalty program, content capabilities, range and adjacency expansion opportunities and private label development.”

The Adore Beauty initial public offering was one of the most hyped floats of 2020 but now appears to have been overpriced.

The shares, issued at $6.75, fell 19 per cent to $3.70. The shares have fallen 46 per cent since the first day of trading in October, when the stock closed at $6.94 after reaching $7.42.

“The result was not as bad as it looked and was probably more a function of elevated COVID-levels now normalising,” said Shaw & Partners analyst Danny Younis. “But [it was] still pretty good growth versus last year.”

Adore Beauty launched a loyalty program in March to encourage customers to spend and increase average order value and purchase frequency. Ms O’Shannessy said sign-ups to the three-tiered scheme were ahead of expectations and customer engagement remained strong.

Adore’s major shareholder, private equity firm Quadrant, took advantage of the COVID-19-inspired beauty binge to sell down almost half its 60 per cent stake a year after buying in.

Co-founders Kate Morris and James Height had a $92 million payday from the float, selling down 40 per cent of their shares and retaining 10.8 per cent each.

12 May, 2021
E-commerce growth puts Goodman Group on track to $60bn
The Australian Business Review

Industrial property powerhouse Goodman Group is stepping up its development work as companies around the world shake up their supply chains, putting it on track to command a $60bn empire.

The group has steered clear of high price industrial portfolios and put its efforts into creating new stock, allowing it to take its active developments to about $10bn by mid-year.

Chief executive Greg Goodman says the strategy is based around getting the best out of existing properties and growth had been accelerated by the pandemic as customers demand ever greater convenience and retailers shifted into e-commerce.

The company has kept its gearing low while also using global pension funds to back its developments and it will keep the bulk of the new stock it is building locally and in global cities.

“We have concentrated our portfolio in high barrier to entry markets where land is scarce and use is intensifying. With a focus on long-term customer requirements, we are developing to meet demand in these consumer markets,” Mr Goodman said.

While the industrial property market has been abuzz with talk of high prices paid for assets, Mr Goodman said the company was focused on having a resilient model that created unique products for global tenants and pointed to the growth in cashflows underpinning this approach.

“The convergence of structural change, strong fundamentals and quality investments should continue to deliver positive performance and profitability for Goodman.”

He expected the group‘s $53bn network of managed assets to go through the $60bn barrier in fiscal 2022 and noted the strong fundamentals like 98 per cent occupancy and 3.3 per cent like-for-like rental growth.

The focus was on Goodman being able to grow “pretty extensively organically, over the next five years”. He said there was more money than there is product around the world and it was better to build top quality assets in big cities.

“We could generate, organically, world class assets that we want to retain to the tune of $10bn every 18 months,” Mr Goodman said.

This could see Goodman‘s local $20bn portfolio go to around $30bn over the next five years depending on customer demand and Goodman’s ability to launch a new wave of multistorey warehouses. Mr Goodman said new facilities were in planning for south Sydney.

Jefferies analysts Sholto Maconochie and Andrew Dodds said the Goodman update was upbeat and ahead of expectations with work in progress smashing through $9bn and expected to exceed $10bn by June.

“Increased demand, scale and duration of developments provide increased medium to long term earnings visibility and assets under management growth, which is expected to exceed $60bn in fiscal 2022, aided by strong cash flow and lower cap rates,” they said.

Work in progress jumped by $1.2bn to $9.6bn and returns bumped up so gross development margins were running at about 45 per cent.

Goodman reaffirmed its forecast for this financial year of an operating profit of $1.2bn, earnings per share growth of 12 per cent, and a full year distribution of 30c per share.

6 May, 2021
Amazon shares jump as quarterly profit triples to $US8.1b
The Sydney Morning Herald reported its biggest profit ever as consumers turned to the online retailer for their shopping needs and businesses paid it more to warehouse and advertise their products.

Shares rose 4 per cent in after-hours trade as its quarterly profit more than tripled to $US8.1 billion ($10.4 billion).

Since the start of the US coronavirus outbreak, shoppers have relied increasingly on Amazon for delivery of home staples and supplies. While brick-and-mortar stores closed, Amazon has now posted four consecutive record quarterly profits, attracted more than 200 million Prime loyalty subscribers, and recruited over 500,000 workers to keep up with surging consumer demand.

That has kept the world’s largest online retailer at the centre of workplace tumult. Its warehouse in Bessemer, Alabama, this winter became a rallying point for organised labor, hoping staff would form Amazon’s first US union and inspire similar efforts nationwide. Workers ultimately rejected the union bid by a more than 2-to-1 margin, but chief executive Jeff Bezos said the saga showed how the company had to do better for employees.

The company meanwhile has been facing litigation in New York over whether it put profit ahead of worker safety in the COVID-19 pandemic.

Amazon’s operation has been unfazed by these developments. Net sales rose to $US108.52 billion in the first quarter ended March 31 from $US75.45 billion, beating analysts’ average estimate of $US104.47 billion, according to IBES data from Refinitiv.

Bezos touted the results of the company’s cloud computing unit Amazon Web Services (AWS) in a press release, saying, “In just 15 years, AWS has become a $US54 billion annual sales run rate business competing against the world’s largest technology companies, and its growth is accelerating.”

Andy Jassy, who had been AWS’s CEO, is scheduled to succeed Bezos as Amazon’s chief this summer, said the unit continues to be a bright spot. Just last week, for instance, Dish Network Corp announced a deal to build its 5G network on AWS. The unit increased revenue 32 per cent to $US13.5 billion, ahead of estimates of $US13.2 billion.

Adding to Amazon’s revenue was its growing chain of physical stores, including Whole Foods Market and its first overseas cashier-less convenience shop, opening last month in the London Borough of Ealing. Amazon delved further into healthcare as well with an online doctors-visit service for employers, representing another area it is aiming to disrupt after retail, enterprise technology and Hollywood.

Amazon, which saw its stock price nearly double in the first part of 2020 as it benefited from the pandemic, has this year underperformed the S&P 500 market index. Its shares were up about 8.5 per cent year to date versus the index’s 13 per cent gain.

At the same time, spending on COVID-19 and logistics has chipped away at Amazon’s bottom line. The company has poured money into buying cargo planes and securing new warehouses, aiming to place items closer to customers to speed up delivery. It said it planned to hike pay for over half a million employees, costing more than $US1 billion - and it is still hiring for tens of thousands more positions.

Amazon said it expects operating income for the current quarter to be between $US4.5 billion and $US8 billion, which assumes about $US1.5 billion of costs related to COVID-19.

4 May, 2021
Apple reported $89.5 billion in revenue for the second quarter, smashing estimates as it continues its iPhone 12 high and stores return to normal operations
Business Insider Australia
  • Apple kicked off 2021 with $47.9 billion in iPhone sales as the iPhone 12 lineup remains a hit.
  • iPhone production wasn’t impacted by the chip shortage, but MacBooks and iPads reportedly are.
  • All of Apple’s US stores were also open in March for the first time since last year.
  • See more stories on Insider’s business page.

Apple reported $89.5 billion in revenue during its 2021 fiscal second-quarter, which ran from January to March for the phone maker.

The company’s Q2 saw all of its stores open for the first time since the start of the pandemic. And while its iPhone production was unaffected by the sweeping global chip shortage, its MacBooks and iPad are reportedly postponed due to the semiconductor crisis.

Here’s a look at the key numbers. Analyst estimates are based on Yahoo Finance data.

Here are the key numbers to watch from Apple’s Q2 earnings:

  • Q2 2021 revenue: $89.5 billion. Analysts were expecting $77.3 billion.
  • Q2 2021 earnings per share (EPS): $1.40, versus Wall Street estimates of $0.56.
  • iPhone revenue: $47.94 billion. Analysts were expecting $41.49 billion.
  • Services Revenue: $16.9 billion, versus analyst estimates of $15.65 billion.
  • Wearables Revenue: $7.8 billion versus analysts’ estimates of $7.52 billion.

Apple’s fiscal second-quarter revenue is a dip from what was a record-breaking Q1 for the company when it reported more than $100 billion in sales, a first for the tech giant. The boom was in part driven by the holiday season and the company’s iPhone 12 line release in October. Some analysts called the lineup one of the most important launches that Apple has made in years.

Wall Street expects the company to deliver about 220 million iPhone units throughout 2021. iPhone production isn’t expected to be impacted by a global chip shortage that is slamming every industry. However, the production of some of Apple’s MacBooks and iPad has been delayed since the company pushed back some component orders for the devices to the back half of this year due to the shortage.

All of Apple’s 270 US stores were opened in March, marking the first time that the company’s retail presence in its entirety was open to customers since the start of the pandemic. However, stores will continue to observe limited capacity and other safety protocols.

Read more: 
The battle between Facebook and Apple over privacy is about more than just ads – it’s about the future of how we interact with tech

Apple faced mounting pressure in its fiscal second-quarter over a privacy crackdown that has begun rolling out. The iOS 14.5 software update, which became available Monday, requires app developers to ask for permission before they collect and track users’ data.

Facebook specifically has taken issue with the new feature since it directly impacts the company’s lucrative ad business, which is built upon data tracking.

Analysts estimate that Apple will pull in $68.67 billion in revenue for Q3. Apple’s fiscal third quarter, which runs from April to June, has already included a virtual event in which the company unveiled a new colorful line of iMac computers as well as a new purple-colored iPhone 12.

23 Apr, 2021
Solomon Lew’s Just Group sued over unpaid rent
Financial Review

Billionaire retailer Solomon Lew’s Just Group has been taken to court by a major landlord after it refused to pay rents in full while stores were closed and trading was disrupted during the national pandemic shutdown.

In a move that may trigger more legal action between landlords and retail tenants, Fortius Funds Management is suing Mr Lew’s Just Group, which owns the Just Jeans, Jay Jays, Peter Alexander, Smiggle, Portmans and Dotti chains, for almost $3.6 million in allegedly unpaid rent on stores in a Sydney CBD shopping complex.

Just Group, which is part of Premier Investments, has responded to the lawsuit by making a cross-claim against Fortius, a Sydney-based real estate investment management group, alleging unconscionable conduct as well as a potential breach of good faith terms amid the coronavirus shutdown.

The case highlights the conflicts between retailers – which say they should not have to pay full rent while stores are closed or foot traffic in shopping centres and CBD areas is down – and landlords, which say retailers have a legal obligation to pay rent according to their lease agreements and who are resisting a push for sales-based rents.

Mr Lew’s Just Group, which has been leading the campaign for sales-based rents, won major concessions from landlords in 2020 and the first half 2021 and received tens of millions of dollars in JobKeeper subsidies, which helped it report record sales and profits.

Fortius is now seeking court orders forcing Just Group to pay unpaid rent, expenses, costs and levies for four stores in the Mid City Centre, a shopping complex on Sydney’s Pitt Street Mall, from April 2020 onwards until the legal dispute is ruled on.

Fortius alleges Just Group’s Just Jeans, Peter Alexander, Portmans and Smiggle stores in the centre owe a combined $3,559,897.49 in unpaid rent, various fees and interest to January 11, 2021, a statement of claim says.

Just Group did pay $2.8 million in rent on the four stores during the period.

But Fortius alleges the Smiggle store owes $390,386.65 in unpaid invoices and has calculated a further $12,823.16 in interest to January 11, 2021.

Leases ‘frustrated’ by pandemic

Fortius alleges Portmans owes $2,047,910.49 in unpaid invoices and $70,633.77 in interest, Peter Alexander owes $392,778.40 in invoices and $18,770.07 in interest and that Just Jeans owes $603,479.76 in unpaid invoices and $23,115.19 in interest.

Fortius’ statement of claim says that last July 7, a Just Group general manager sent emails proposing to limit the rent payable under the leases to 8 per cent of each of the respective outlet’s monthly sales.

In December, Just Group agreed to pay rent for March-November 2020 in line with the drop in average sales at each brand, but Fortius rejected the offer in December.

Just Group, in its cross-claim against Fortius, says the leases are “frustrated” by the COVID-19 pandemic and the retailers are discharged from their obligations under each lease.

Just Group, which is seeking damages and costs, says Fortius knew the stores were vulnerable during COVID-19 and that their ability to trade viably was based on decent levels of foot traffic in the Mid City Centre and the CBD more generally.

According to its cross-claim, foot traffic in the Mid City Centre fell 62 per cent in March 2020, 92 per cent in April, 72 per cent in May and was down between 34 per cent and 52 per cent between June and September.

Between March and December, sales at the Smiggle store in the centre fell 70 per cent; Portmans sales fell 64 per cent; Peter Alexander sales decline 24 per cent; and Just Jeans sales dropped 46 per cent.

“The COVID-19 pandemic events removed any prospect of each tenant operating profitably at the relevant premises in the near term,” the cross-claim said.

Just Group agrees it sent an email in July proposing temporary leasing arrangements, but said these were in line with the commercial leasing principles agreed by the national cabinet in April. Just Group was not covered by the code, which covered retailers with annual turnover of less than $50 million.

Just Group alleges Fortius, despite the COVID-19 pandemic and the principles of the code of practice, “refused to negotiate in good faith with Just Jeans Group and the tenants for appropriate temporary leasing arrangements during the COVID-19 pandemic and subsequent recovery period”.

“The tenants did not receive in the appropriate proportion the benefit of any reduction in operating expense for the Mid City Centre during the COVID-19 pandemic or any reduction in Fortius’ statutory charges (including but not limited to land tax and insurance),” the claim said.

Just Group also took issue with Fortius’ demand that it provide information about online sales for the four brands.

Major landlords have been trying to secure leases that include a proportion of retailers’ online sales, but retailers have resisted the push, with Just Group retail chief Mark McInnes describing it last month as “simply ridiculous”.

“Fortius has purported to demand that Just Jeans Group and the tenants provide Fortius with information concerning the turnover of the business of the tenant that is turnover from online transactions, which the tenants cannot be required to provide,” it said.

Fortius, which filed the claim in the NSW Supreme Court on January 13, is acting as the trustee for the City Retail Trust, which owns the complex. The centre is managed by Jones Lang LaSalle.

Fortius and Premier Investments declined to comment on the case, which returns to court this week.

23 Apr, 2021
Woolworths doubles down on data, takes control of Quantium
Financial Review

Woolworths is doubling down on data analytics, outlaying $223 million to take control of data science firm Quantium and creating a new business unit to bring together advanced analytics and retail capabilities across the group.

Woolworths said on Tuesday it had lifted its stake in Quantium, Australia’s oldest and largest data business, to 75 per cent from 47 per cent for $223 million.

Woolworths originally acquired a 50 per cent stake in Quantium in 2013 for about $20 million from co-founders Adam Driussi, Greg Schneider and Tony Davis. It entered into a long term partnership, using Quantium’s data science capabilities to make better decisions on pricing, ranging, store layouts and promotions to attract and retain customers.

The latest transaction, which is expected to be completed before the end of June, implies a valuation of almost $800 million for Quantium, 20 times the value when the retailer acquired its initial stake eight years ago.

Since Woolworths acquired its initial stake, Quantium’s revenue had grown seven-fold, Mr Driussi told The Australian Financial Review.

Before the deal, Quantium had been considering an initial public offering or a sale to private equity or trade buyers. The Woolworths deal enabled the retailer to consolidate Quantium in its accounts and would enable Quantium to maintain its independence while working with Australia’s largest retailer to grow locally and overseas.

“This is an exciting way to turbocharge the growth of the company,” Mr Driussi said, who plans to remain with the business.

“The idea is we’ll solve big problems for Woolworths and take that to other organisations ... we think there’s a great opportunity to turn them into products we can take to retailers globally.”

It is understood that Woolworths has a call option to buy out the remaining 25 per cent of shares in Quantium in three years.

Following completion of the transaction, Quantium will form part of Woolworths and a new business unit called Q-Retail will be established, bringing together advanced analytics and retail capabilities across the two businesses.

Q-Retail will focus on delivering Woolworths’ advanced analytics plan and commercialising retail products globally.

Woolworths was a major beneficiary of the pandemic, when stay-at-home consumers stocked up on pantry staples, liquor and homewares, but chief executive Brad Banduccci has warned that sales will fall in the June quarter as it cycles the surge in demand a year-ago.

“Advanced analytics is key to improving the experiences, ranges and services we provide to our customers and the support we provide to our teams and suppliers,” Mr Banducci said.

“The way we gather data, interpret it and protect it is becoming ever more important. Through this transaction, we aspire to bring together Quantium’s advanced analytics capability and Woolworths Group’s retail capabilities to unlock value across our entire retail ecosystem,” he said.

Woolworths is developing a retail ecosystem and opening up areas of its operations – including its store network, IT, supply chain, data, media capabilities and rewards programs – to third parties to accelerate growth.

Q-Retail will be led by Amitabh Mall, who joins Woolworths as chief analytics officer after 20 years at Boston Consulting Group, where he led the consumer and retail practice in the Asia-Pacific.

Quantium will continue to be run by the existing management team led by Mr Driussi and will continue to maintain agreements with clients in fast-moving consumer goods, banking, insurance, consumer services, property, health and government.

23 Apr, 2021
Redbubble CEO’s $1.25b revenue vision comes at a short-term cost
Financial Review

The new boss of e-commerce player Redbubble, Michael Ilczynski, sought to assuage investor concerns about a planned step-up in spending, after a 23 per cent share price tumble caught him by surprise on Thursday.

After announcing his three-year vision for the company, which involves temporarily sacrificing profit margins to hit $1.25 billion in revenue by 2024, Redbubble investors pushed its share price into a steep descent, plunging more than 23 per cent at the close to $4.24 – its lowest price since November last year.

Speaking to The Australian Financial Review, Mr Ilczynski said he was surprised by the negative share price reaction and assured investors the increased spending would be disciplined.

“We think the business is in a fantastic position. Compared to where it was a year ago, there was a dramatic step change in the scale and profitability,” he said.

“When we’re in a profit-maximising phase we can generate strong margins. But now ... we’re well capitalised, we have a new CEO and a committed management team, so the timing is right to enter a new investment phase for the next few years.”

To achieve the $1.25 billion in revenue milestone, Mr Ilczynski said Redbubble’s earnings before interest, tax, depreciation and amortisation margin would suffer, falling to the mid-single-digit range from its current 9.5 per cent margin for the next few years.

Beyond calendar year 2024, it is expected to bounce back to a 10 to 15 per cent range.

The company also hopes to pay out $250 million annually to artists by 2024 and achieve a gross transaction value of $1.5 billion.

“Achieving these aspirations will be a challenge requiring a combination of disciplined investment, creative and thoughtful experimentation, and focused execution. As we make targeted investments at the gross margin, marketing and opex [operating expenditure] lines, the combination of these may lead to some short-term reduction in EBITDA margins,” Mr Ilczynski said.

Despite the sell-off, Mr Ilczynski said his interactions with investors on Thursday had been positive.

“Investors [who bought in early] feel good about the plan,” he said. “I’ve seen the benefits of management being willing and having the confidence to lay out the long-term plan and making short-term targeted investments.

“But they will be disciplined investments coupled with focused execution.”

RBC Capital Markets analyst Tim Piper said the profit margin reduction was substantially lower than consensus earnings expectations over the next couple of years.

“What will be important to the direction of the share price now will be whether the market believes the longer-term aspirational targets can be met,” he said. “We do think the implied margins included in the aspirational targets do look a little on the conservative side of what we thought the business could achieve at greater scale, and this looks largely driven by the marketing requirements.”

For most of last year Redbubble founder Martin Hosking led the business,re-joining as interim CEO during one of the biggest growth periods the business has experienced, while the board searched for a replacement for ousted former leader Barry Newstead.

Mr Ilczynski joined the business from Seek, where he’d led the job search business in Asia-Pacific and the Americas.

The business – which enables independent artists to sell their designs on everything from T-shirts to stickers to homewares – grew marketplace revenue by 85 per cent in the year-to-date (99 per cent at constant currency) to $456 million, missing analyst estimates. Marketplace revenue is total revenue excluding money paid to artists.

Investors were also disappointed by the company’s earnings before interest and tax sliding into the negative in the quarter. At the half-year result, the business had achieved EBIT of $41.8 million, but in the third quarter it banked a $900,000 loss.

About 94 per cent of the company’s revenue is generated offshore in US dollars, euros or pounds, and consequently the company has suffered a substantial currency headwind in the year-to-date, which worsened in the third quarter.

The company is also seasonal in nature, with more of its revenue generated in the first half thanks to the Christmas period and sales like Black Friday.

For the rest of 2021, Mr Ilczynski said he would focus on four key areas to drive the growth of the business in the next few years – artist activation and retention; customer understanding, loyalty and brand development; user acquisition and transaction optimisation; and expanding its product range and scaling its third-party fulfilment network.

Between 2022 and 2024, he said, the business would accelerate its investment in these areas, growing its headcount and spending more on marketing, as well as investing in Redbubble’s marketplace technology and making it a better digital experience.

“There is a lot of hard work in front of us, progress may not occur in a linear fashion, and there are likely to be challenges along the way,” Mr Ilczynski said.

“None of this, however, will change the opportunity we have and the potential for the business.”

23 Apr, 2021
Woolworths set to launch online marketplace after multimillion-dollar investment
The Age
The Age

Supermarket giant Woolworths has made a multimillion-dollar investment in Melbourne startup Marketplacer as part of its plans to compete with the likes of Amazon through the launch of its own marketplace offering.

Woolworths’ venture capital arm, W23, announced the investment on Thursday which will see the supermarket take a minority stake in Marketplacer alongside a number of high-profile investors, including tech giant Salesforce and prominent investment firms Endeavour and Acorn Capital.

Marketplacer was founded in 2016 by Jason Wyatt and Sam Salter. The startup helps retailers create their own online marketplaces, similar to those offered by eBay or Amazon, and sell both their own and third-party products. This allows companies to effectively offer a larger range of products without having to stock the items themselves.

Woolworths will leverage its investment into Marketplacer to launch its own online marketplace offering later this year, which will begin with an initial pilot of an expanded range of everyday Big W products.

The supermarket’s head of new business, Faye Ilhan, said the new offering was intended to help the company keep up with shopper expectations, who have become increasingly accustomed to shopping online post-COVID.

“As more of our customers start their shopping journey digitally and buy groceries online, we know their expectations will only continue to rise,” she said.

“This will be a highly curated marketplace focused on range extension in our core everyday needs categories and we look forward to exploring opportunities with supply partners.”

Woolworths’ foray into this space may see the business butt heads with other marketplace heavyweights such as eBay, Amazon or Kogan. However, the marketplace model is becoming increasingly commonplace among other retailers, with Bunnings, Myer and Metcash all opting for the service.

Mr Wyatt said he was excited to have Woolworths on board as an investor, saying the business decided to invest after undertaking a global tender to find a new marketplace partner.

“It’s been a very humbling experience that provides a huge amount of credibility for any other organisation around the world that wants to use our platform,” he said.

The retailer’s shareholding in the business is a “very small minority stake”, Mr Wyatt said and doesn’t provide Woolworths with any exclusivity over the company’s platform, meaning Marketplacer can continue to work with other existing clients such as SurfStitch, Nokia and Providoor.

W23 managing director Ingrid Maes said: “W23 invests in innovative startups that accelerate our ecosystem strategy, and where long-term win-win partnerships are an inherent advantage for both parties.”

“Marketplacer is a leading platform for an increasing number of global retailers exploring third-party marketplace strategies, and will play a key role powering our own digital improvements.”

Woolworths’ investment in Marketplacer is one of many made by the company’s W23 venture capital arm since its launch in 2019. The company has acquired stakes in a diverse range of businesses, including Sherpa, Eucalyptus, Spoon Guru and Longtail UX.

14 Apr, 2021
Spell launches GlamCorner-backed rental service

Spell has today taken another step in its sustainability journey, announcing a new partnership with fashion rental platform GlamCorner. 

The partnership will see Spell become one of Australia’s first designers to launch its own rental offering on the GlamCorner platform, and follows a similar partnership between GlamCorner and David Jones. 

The partnership will offer an online destination for customers to rent from a collection of 48 Spell garments, including archived pieces from previous collections.

Speaking on the partnership, Spell co-founder Elizabeth Abegg said that the partnership adds another layer to the brand's sustainability mission. 

"What started as an emboldened mission to trace our supply chain and introduce more ecologically responsible fibres into our collections, has become a business-wide quest to always operate with people and planet at the forefront of our minds.

"In a world where our resources are finite, we have long known that it is circular or bust.

"Spell is very excited to play our part when it comes to moving towards a circular economy with our Sister to Sister rental platform, powered by GlamCorner.

"Inspired by our community, who have always led us with their passion to buy, swap and sell our pieces, we are now offering a new solution to accessing our collections whilst decreasing the size of your wardrobe and your environmental impact on the planet," she said. 

Orders will be fulfilled by GlamCorner’s 'click to rent' process which allows pieces to be rented out for a short term, returned and cleaned.

The partnership will help Spell support the circular economy, helping to reduce the 6000kg of clothes that end up in Australian landfills every 10 minutes.* 

GlamCorner co-founder and COO Audrey Khaing Jones welcomed the partnership with Spell. 

"It’s always been our mission from when we first started in a wardrobe of 30 garments to reshape the fashion industry towards a more circular economy and make rental the norm.

"Now, almost 10 years on we are working with Spell, one of Australia’s leading designers that are taking their impact and sustainability journey seriously.

"We’re proud to partner with a brand that is aligned with our vision to drive this generational change in fast fashion consumption and waste.

"Last year we worked with leading retailer David Jones and now we are working directly with leading Australian designers, this is a huge milestone for us.

"This partnership is setting an industry benchmark on the commitment that we should be making to sustainability," she said. 

The Spell x GlamCorner rental platform is available online now. 

14 Apr, 2021
Quadrant pulls float
Financial Review

Quadrant Private Equity has postponed plans to float its online auctions business Ltd.

A spokesperson said on Thursday morning that Quadrant and Grays management made the decision following a quick round of marketing conducted over the past fortnight.

“Having a deep understanding of the business, management and Quadrant have decided to delay an IPO having every confidence in its ability to continue to deliver expected GTV and earnings growth,” she said.

“While we have had strong local and offshore investor engagement throughout the PDIE process, we understand and respect that investors are keen to see more track record post the business transformation under Management/Quadrant ownership.”

Quadrant is expected to reconsider a float later in the year, once the business has another set of results under its belt.

Quadrant took control of Grays in 2019 and owns about a 90 per cent stake in the business. The company was formerly owned by listed leasing company Eclipx and had a short stint as a separately listed entity on the ASX-boards that ended in 2017.

Quadrant had brokers Jarden, Shaw and Partners and UBS pitch the business to Australian fund managers in the past fortnight.

A big part of the “investor education” was trying to get fund managers to take a fresh look at the business and consider changes that had occured under Quadrant’s watch.

The brokers told clients that the new Grays had been reshaped into a capital-light marketplace, that matched buyers and sellers in the same way as a or online real estate listings business, rather than an auction house with large inventory levels.

Investors were told Grays expected to report $132.9 million net revenue in the 2021 calendar year on a proforma basis, up from $124 million last year, and $28.8 million EBITDA.

The brokers had valued Grays at more than $300 million. Quadrant Growth Fund paid $60 million for Grays in July 2019.

7 Apr, 2021
US investor a.k.a Brands acquires stake in Culture King streetwear retailer in $600m deal
The Australian

A young Australian couple who started their streetwear brand from a single store on the Gold Coast have sold a majority stake in their business in a deal valuing the retailer at $600m.

Simon Beard, 36, and his 32-year-old wife Tah-nee will sell part of their Culture Kings brand to US-based online retailer a.k.a Brands, which has plans to expand the business to the huge North American market.

Brisbane-based Culture Kings, which operates an online business and eight physical stores around Australia, last month hosed down suggestions it was in talks with US investors about being acquired.

The company, founded by the Beards in 2008 on the Gold Coast, now employs 500 people with a focus on online sales.

Mr Beard, who began his retailing career selling products on Alibaba, claims to have pioneered ‘schoolies’ merchandise on the Gold Coast.

Culture Kings, which boasts Justin Bieber, Drake and Ronaldo as clients, sells a modern clothing range targeted to millennials and teenagers. Its stores feature in-house DJs and a basketball shooting competitions designed to attract the young.

Mr Beard said he would stay on as chief executive and retain a stake in the company that would remain based in Brisbane.

A.k.a, which is backed by Boston private equity firm Summit Partners, has a portfolio of online retailers that includes youth-focused brands Gold Coast-based Princess Polly, Brisbane-based Petal & Pup, and Rebdolls. Australian-born NBA star Ben Simmons is investing in a.k.a. in conjunction with the Culture Kings transaction.

A.k.a Brands chief executive Jill Ramsey said Culture Kings was one of the most sought-after streetwear retailers in the world with significant growth opportunities.

“We will work with Tah-nee and Simon to introduce and expand the Culture Kings experience in existing and new geographies,” said Ms Ramsey. ”We are thrilled to have them join our portfolio of high-growth brands.”

A.k.a did not disclose the financial terms of the deal. The company had initial talks in 2020 with potential partners about expanding in the US, but the outbreak of the COVID-19 pandemic had delayed any deal. It is understood the latest deal values Culture Kings at around $600m.

Mr Beard said the deal would allow Culture Kings to expand and become the “number one destination for streetwear across the globe” with a focus on expansion in the US with new physical stores.

“Our vision has always been to create the next global retail phenomenon,” said Mr Beard. “We couldn’t have found a better partner than a.k.a. The US market is very large.”

He said he always envisaged Culture Kings would become a global brand and credited his wife being a linchpin of the business’ success.

The couple live on the Gold Coast and last year unveiled plans to dramatically expand their mega mansion to create a giant Bali-style “pool zone”. They bought the resort-style property in May for $11.75m.

Culture Kings has successfully pivoted during the COVID-19 lockdowns with 75 per cent of its sales now transacted online.

According to the company’s latest financial statement lodged with the Australian Securities and Investments Commission (ASIC), Culture Kings reported a profit after tax of $19.4m last financial year on revenue of $183.7m.

Culture Kings is not the first Australian retail brand to be acquired by Hollywood-based a.k.a. Brands, which has been on the hunt for new digital businesses since it was founded in 2018.

Over the past two years, it has bought Princess Polly, which claims to be one of fastest growing brands in the US for women between 16 and 25, and Petal and Pup, founded in 2015 by Tiffany Henry.

Queensland Treasurer and Investment Minister Cameron Dick welcomed the investment by a.k.a. Brands which was expected to create new jobs in Queensland as Culture Kings expanded in the US market. Mr Dick said the growth would include expanding warehouse and ordering operations at its Archerfield base.

“I understand Culture Kings is likely to employ dozens more Queenslanders over the next 12 months as a result of this deal,” Mr Dick said.


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