News

16 Sep, 2021
Super Retail Group names Priceline exec Cathy Seaholme as new Macpac CEO
SOURCE:
Ragtrader
Ragtrader

Super Retail Group has announced that Macpac CEO Alex Brandon will step down from the role in October. 

Brandon will be replaced by current Priceline Pharmacy GM of retail operations Cathy Seaholme on October 25. 

A seasoned retail operator, Seaholme will bring seven years of experience from The Body Shop Australia, as well as 13 years at Country Road Group, to her new position at Macpac. 

The leadership transition forms part of a planned strategy, following Super Retail Group's acquisition of Macpac in 2018 for NZ$144 million. 

Super Retail Group CEO Anthony Heraghty thanked Brandon for his work and leadership of the brand. 

"During nearly a decade leading Macpac, Alex has overseen its evolution from a small wholesale business to one of the most recognisable outdoor adventure brands in our region. 

"Following the successful integration of Macpac into Super Retail Group, now is the right time for a leadership transition," Heraghty said. 

Heraghty added that the Group is excited for what Seaholme will bring to the brand. 

"In wishing Alex all the very best for the future, we acknowledge his critical role in successfully integrating Macpac with Super Retail Group and thank him for his leadership and his commitment to maintaining the heritage, quality and integrity of the Macpac brand. 

"Cathy's appointment represents the culmination of a long-planned succession strategy for the Macpac business and I am confident her deep retail experience and commitment to the customer will help drive the next phase of growth for Macpac," Heraghty said. 

Speaking on his departure, Brandon praised Macpac and what it has achieved as part of Super Retail Group. 

"It has been a privilege to lead our passionate team of dedicated team members who have contributed to the success of Macpac and grown awareness of a truly authentic and sustainable brand. 

"I am particularly proud of our track record of leading innovation without in any way diminishing our proud heritage deep-rooted in adventure," he said. 

In its FY21 results, Macpac reported a 16.3% increase in sales to $153.4 million, as a result of a 14.2% increase in like for like sales. 

The brand's online sales lifted 38% to $30 million, accounting for 21% of sales. 

Seaholme will officially take up her position on October 25 and will relocate with her family to New Zealand to operate out of Macpac's headquarters in Christchurch. 

13 Sep, 2021
Factor Bikes goes global with Farquhar and Point King
The Sydney Morning Herald

Premium bike company Factor Bikes plans to use an injection of cash from billionaire Atlassian co-founder Scott Farquhar and Sydney-based private equity outfit Point King Capital to fast track its global ambitions.

The British bike company has had a strong Australian connection ever since it first launched its bikes at the Tour Down Under in Adelaide in 2016 and has now brought on the Australian investors alongside four time Tour de France winner Chris Froome to lead the next stage of its expansion.

Factor’s founder and chief executive, Rob Gitelis, told The Age and The Sydney Morning Herald the company was different to the majority of its competitors, which rely on third-party manufacturers, as it has its own manufacturing facilities in Taiwan.

“Essentially they are design and marketing companies while we control the entire process because we are a manufacturer,” he said.

The level of customisation available through controlling the manufacturing process is what enabled Factor to attract both Froome and keen cyclist Mr Farquhar, who participated in the $US10 million ($13.45 million) funding round through his investment vehicle Skip Capital which he runs with wife Kim Jackson.

“Scott visited our Melbourne showroom about six months ago and spent the better part of a week riding a Factor down in Melbourne,” Mr Gitelis said.

“[Froome] gave us some input about things that he would prefer and we were able to turn it around incredibly quickly to get him another bike to try, and he had never had that sort of experience before with his previous brand. It was always many months if not at all, being able to do any kind of changes or modifications.”

Factor plans to build out its direct-to-consumer brand for bikes which start at $15,000 with a focus on North America, the United States and Australia, where it is set to open a new flagship store in Melbourne and to launch a range of mountain bikes.

Sam McKay, founding partner at Point King, said consumer brands were based on product, people and distribution.

He said Factor had the product with bikes which were “best in class machines”, top people in Mr Gitelis and his team and so the focus would be on distribution and helping the brand grow globally.

Mr McKay will represent both Point King and Skip on Factor’s board and said the investment followed on from Point King and Skip investing together in sustainable packaging and home-cleaning startup Zero Co last year.

“We’ve looked at things together and we shared a passion about the brand, the sport, the importance of health and wellness and people getting outside and the business opportunity about being able to partner with Rob and his team on building a large global brand,” he said. “With Rob, Chris, Point King and Skip, it’s a pretty interesting composition of investors who can together come up with hopefully pretty good outcomes for the business.”

Mr Farquhar said he loved cycling and so it was “a dream” to play a small part in what he said was one of the most innovative companies in the space.

“Rob is a wizard when it comes to building bicycles, and the team behind Factor are truly building something special,” he said.

13 Sep, 2021
Quiksilver owner names new EMEA president
The Industry Fashion

Foulet has spent 20 years at Boardriders, which also owns clothing and lifestyle brands Roxy, Billabong, RVCA, DC Shoes, Element and Von Zipper.

He has been global chief information officer at the company since March 2015. Prior to this, he was global director of ecommerce and digital marketing between 2015 and 2016.

He has also been held numerous roles at Quiksilver, including as marketing director for Europe and managing director for Europe for the technical division, which included eyewear, watches and surf and mountain equipment.

He replaces Greg Healy, who was president for the EMEA and APAC regions. Healy will continue as APAC president.

Foulet said: "I am delighted to be taking over as head of the EMEA region at a key moment in Boardriders' history. Over the past few years, the group has built up a unique strength in the action sports and outdoor market by bringing together iconic brands without compromising their authenticity. Our mission today is to bring the full potential of our brands to life in the European market, in a dynamic environment in which our boardsports and outdoors activities are highly popular.

"Our objective is also to accelerate the evolution of our model in the light of current transitions: digital, operational and environmental,"

13 Sep, 2021
Little Birdie makes key leadership hires
Inside Retail

Online shopping startup Little Birdie has made a number of key hires, with ex-Uber product marketer David Jennings joining as chief marketing officer and ex-Kogan deputy CFO Joanne Smith appointed chief financial officer.

The business recently secured $30 million in funding from Commonwealth Bank to integrate its offer into the bank’s app, allowing it to dip its toe into the e-commerce landscape.

“I am thrilled to be part of the team that will help take Little Birdie to new heights, and I am looking forward to the challenge of guiding the business through rapid growth,” said Smith, who brings experience across e-commerce and technology businesses in Australia.

Smith was integral to Kogan’s IPO in 2016, and worked with KMPG’s advisory team to work on mergers, acquisitions and corporate transformations.

Jennings previously worked at Uber as head of global rider product marketing, where he oversaw the the UberX, Uber Pool, Uber Vaccine and Uber Rent brands.

“With online shopping becoming the norm, I’m incredibly excited to play a role in building a discovery platform that provides a birds-eye view of everything happening in shopping,” said Jennings.

Little Birdie was launched in August 2021, and aims to help consumers discover trending products, easily compare similar products from different brands and track prices to find the offer that best meets their needs before redirecting them to the retailer’s website to complete the transaction.

13 Sep, 2021
Myer reveals new sport-focused, "department store first" concept
SOURCE:
Ragtrader
Ragtrader

Myer has announced the launch of a new digital destination, The Movement at Myer, focused on giving customers comprehensive information and product selections in the sporting category. 

The Movement at Myer concept will cover all aspects of sport for men, women and kid’s lifestyle, fashion and footwear needs. 

The platform will also feature gym equipment and sports technology such as headphones, recovery tools and fitness trackers. 

As part of the launch, Myer will add more than 25 news brands to its portfolio including Raging Bull Sport, X+Y Active, Rockwear, DK Active, Gaiam, Mitchell & Ness, Majestic Athletic, Chloe and Lola Active, NCAA, SPT Football, Saucony, and Skechers.

Myer group merchandise manager Dean Austin said the new hub sets the business apart. 

"With an unparalleled range of sporting, lifestyle fashion, tech and equipment, The Movement at Myer launch is a department store first and truly sets us apart from the competitive sporting and activewear landscape.

"We are excited to launch more than 25 new brands and ranges including Tommy Sport, Superdry Sport, Asics, Brooks, Converse apparel and Lacoste Sport alongside our stable of powerhouse brands such as; Adidas, Puma, Champion and Reebok," he said. 

Additionally, the department store will welcome official AFL apparel and NBA apparel to The Movement at Myer brand portfolio exclusively in November.

Once restrictions lift in Victoria, Myer will also replicate the online destination in its Melbourne CBD store, with the whole basement floor set to be dedicated to fitness merchandise and interactive activations such as a football pitch and basketball court. 

"In November, we will launch The Fanzone – a sports fan’s paradise with dedicated apparel from AFL, American Sports and soccer," Austin explained. 

"This concept will include the first official AFL store in the Melbourne CBD, American sports fan apparel across NBA, NCAA, MLB and MFL plus SPT football that will cover football leagues across the globe.

"There will be personalisation stations for customers to get their name or favourite player on their jersey plus a football boot try on area.

"Backing this initiative is an enhanced online platform offering better customer experience and easier navigation. 

"We look forward to launching The Movement at Myer Melbourne as soon as retail restrictions lift," Austin said. 

In the meantime, the online destination will offer customers exclusive content pieces around fitness and lifestyle tips to showcase useability between the product and customer. 

The improved experience is set to offer easier navigation, broader visibility and greater choice.

The Movement at Myer is live online now. 

7 Sep, 2021
Woolly shoe company Allbirds sets sights on $2 billion Nasdaq listing
SOURCE:
The Age
The Age

Kiwi sustainable shoe company Allbirds is preparing to debut on Wall Street through an initial public offering which could value it at more than $US2 billion ($2.72 billion).

The direct-to-consumer woollen shoe brand has cult status in its native New Zealand where its sneakers are worn by Prime Minister Jacinda Arden and in Silicon Valley, where venture capitalists and startup founders team the sneakers with their Patagonia jackets. Devotees of Allbirds shoes range from Google co-founder Larry Page to actor and Allbirds investor Leonardo DiCaprio.

Allbirds has filed an S-1 to list on the tech-dominated Nasdaq exchange in an application which revealed high growth but also widening losses at the company.

Allbirds lost $US14.5 million in 2019, which widened to $US25.9 million in 2020, according to the S-1 filed with the Securities Exchange Commission (SEC). However, the company’s revenue continued to grow from $US193.7 million in 2019 to $US219.3 million in 2020.

Online sales made up 89 per cent of Allbirds total sales with more people shopping online due to the COVID-19 pandemic. The company has also benefitted from the shift towards casual dressing.

Last year Allbirds raised $US100 million in a funding round that valued the company at $US1.7 billion. While the startup has listed the size of its offering as $US100 million, that figure is just a placeholder and will change when the terms of the share sale are set, with reports Allbirds is seeking to be valued at $US2 billion or more.

The company was started in New Zealand by Joseph Zwillinger and Timothy Brown in 2015 with the pair launching a Kickstarter campaign a year later for “Wool runners: No socks. No smell” which raised $120,000.

Mr Brown came up with the idea of using wool to make shoes when he was a professional footballer for the Newcastle Jets in Australia and Wellington Phoenix in New Zealand and teamed up with former clean-tech entrepreneur Mr Zwillinger.

“Coming from New Zealand, the land of the sheep I saw an opportunity, in wool, this miracle fibre that had been either overlooked or, you know, maybe it was just a really bad idea,” he told The Age and The Sydney Morning Herald in a previous interview.

Allbirds wasn’t an instant success selling just one shoe in its first year of operations, but gradually it gained traction by using social media to build its brand and circumventing the traditional footwear sales model by selling direct to customers online.

It has now expanded beyond shoes into clothing, with the launch of a range of socks and activewear made from wool and eucalyptus fibres.

Nick Crocker, partner at venture capital firm Blackbird Ventures, said for Allbirds to have started out on Kickstarter and then five years later to have filed to go public on the Nasdaq was an amazing achievement.

“As a brand I think they have executed superbly, and they have built obsessive love among their customers which is never a fluke,” he said. “You don’t accidentally build that kind of customer love at scale, you build it with sustained effort, and quality over a long period of time.”

As a B-Corp certified business, which requires compliance with social and environmental standards, Allbirds’ S-1 sets out its plans for the listing to be a “sustainable public equity offering” or “SPO”.

“The more sustainable we are, the better we believe our products and business will be,” the document states. “We are proud of the alignment of financial and environmental benefits from our work, and that we are able to serve as a driving force in a new age of sustainable enterprise.”

A spokeswoman for Allbirds said she was unable to comment because of SEC restrictions.

7 Sep, 2021
Mosaic Brands looks at raising capital following return to profitability
Inside Retail

Mosaic Brands has returned to earnings growth despite faltering sales, clocking in a net profit figure of $2.7 million – 101 per cent up on last year – despite revenue falling 3.8 per cent during the year to 27 June.

Online sales also hit a new high of $111 million, up 19 per cent on the same period of last year.

Group chief executive Scott Evans said the business was incredibly pleased with the result, which came about after Mosaic Brands took actions to “reset the entire group for the future”.

“The benefits of these actions became evident in the fourth quarter, which delivered our second most profitable Q4 on record with comparable sales growth of 27.9 per cent and comparable margin growth of 33 per cent, against a backdrop of subdued sentiment amongst our core customer group due to Covid-19.”

And, while it said it had ended the financial year in a net positive cash position, the group has entered a trading halt in order to undertake a capital raising over the next few days in order to strengthen its balance sheet – given the uncertainty the current trading conditions create.

The first weeks of the new financial year have been difficult for Mosaic Brands, with the momentum gained in FY21 stalling due to widespread lockdowns.

“For the entire retail sector, it’s critical that by late October, stores nationally are able to open and be trading again,” said Mosaic Brands chairman Richard Facioni.

“From supply chain logistics to consumer and national sentiment, ongoing internal borders beyond this timeframe will leave lasting scars.”

6 Sep, 2021
Wesfarmers goes from good to great
Financial Review

Wesfarmers, the conglomerate that touches the lives of millions of Australians every day, has just delivered its best financial results for more than a decade.

Wesfarmers is one of the few Australian companies that deserves the “good to great” description first coined by American business analyst Jim Collins.

Collins focused on good companies that reached an inflection point in their history and stepped up to another level of sustained high performance.

The fiscal 2021 financial year looks to have been Wesfarmers’ inflection point, with a 16 per cent rise in net profit to $2.4 billion on the back of a 10 per cent rise in revenue to $33.9 billion.

 

Shareholders benefited from a 17 per cent increase in the full-year dividend to $1.78 and a $2.3 billion capital return of $2 a share. The capital return was a no-brainer given Wesfarmers had no net debt at June 30.

The company is showing the benefits of the important strategic moves made by chief executive Rob Scott since his appointment in 2017.

 

6 Sep, 2021
Wesfarmers results jump as Bunnings, Kmart and Officeworks boom
Inside Retail

Wesfarmers has joined in the parade of businesses reaping the rewards of a strong year of trade, despite ongoing movement restrictions, signaling a 40 per cent jump in net profit to $2.38 billion.

The conglomerate’s retail sector, made up of Bunnings, Kmart Group and Officeworks, delivered strong sales of $33.9 billion (up 10 per cent) over the last 12 months, according to managing director Rob Scott.

“While Covid-19 had a significant impact on operations during the year, the group’s businesses maintained their focus on building deep customer relations and trust,” Scott said.

“Customer demand remained resilient, [though] sales growth in Bunnings, Officeworks and Catch moderated from mid-March as the businesses began to cycle elevated demand following the onset of Covid-19 in the prior year.

“Pleasingly, sales growth from mid-March remained strong on a two-year basis across all of the Group’s retail businesses.”

According to Scott, digital engagement with the business’ brands increased throughout the year and, including sales on the Catch Marketplace, hit $3.3 billion.

Revenue at Bunnings increased 12.5 per cent over the course of FY21, reaching $16.8 billion, with Scott noting the business’ success was due to its resilient operating model and the ability to adapt to changing consumer needs.

Kmart Group, which operates Kmart, Target and Catch, saw revenue grow to $9.9 billion for the year.

“Kmart and Target earnings growth [of 69 per cent to $693 million] was driven by higher sales, lower clearance costs and an improvement in the cost of doing business as a result of planned network changes,” Scott said.

“This was partially offset by higher operational costs associated with online fulfilment and ongoing investment in technology in Kmart.”

Catch’s earnings were also impacted by investments in technology, marketing and fulfilment capabilities to support further growth. No such investments in Target were mentioned, though the planned changes in Target’s store network (that is, converting them to Kmart stores) saw trading results “exceed internal expectations”.

Likewise, Officeworks’ revenue jumped 8.7 per cent to $3 billion, while earnings increased to $212 million, supported by strong sales growth, but hampered by continued pressure on margins.

All businesses have seen sales tumble in the last seven weeks, however, as Sydney’s lockdown has spread across the country and caused retail restrictions to be reinstated.

“The impact of lockdowns and household and business confidence has become more acute as recent lockdowns have been extended and further widespread restrictions would negatively impact overall business activity and the group’s trading performance,” Wesfarmers said.

As such, the business said it would continue to support vaccination efforts, including among its own team members.

6 Sep, 2021
Top retail CEOs back pre-Christmas reopening
Financial Review

Top retail chief executives are strongly behind the goal of hitting vaccination targets and getting the economy open again well before Christmas to revive the economy and the health of the nation’s people.

But some CEOs are pessimistic and believe slow vaccination rates and sporadic lockdowns to deal with future COVID-19 variant outbreaks could push the reopening into the first half of next year and delay the resumption of significant international air travel until 2023.

Rob Scott, CEO of Wesfarmers, which owns the Bunnings hardware, Officeworks and Kmart retail chains and a clutch of industrial businesses, said a 70 per cent vaccination rate – the lower end of the 70 per cent to 80 per cent threshold given by the Doherty Institute’s modelling for ending lockdowns – should be safe for retail businesses to open up again well before Christmas.

“We’ve demonstrated they’re safe and as the community gets to that level of vaccination, there will be no reason for the businesses to be shut. I think well in advance of Christmas is a very reasonable target,” Mr Scott told The Australian Financial Review.

But he said it would not be like turning on a light switch and everything reopening on the same day, and even at 70 per cent to 80 per cent community vaccination, vulnerable people such as the elderly, Indigenous communities and others who were unvaccinated would need to be looked after.

6 Sep, 2021
6 Aussie brands come together to donate to Afghan refugees
SOURCE:
Ragtrader
Ragtrader

A cohort of Australian fashion brands have come together to donate new clothing and products to Afghan refugees who have been evacuated and are being brought to Australia. 

The initiative was launched by Tessa Carroll, founder of A_C Official and The Common Good Company, and has been brought to life in consultation with the Multicultural Services Centre of Western Australia and the Asylum Seeker Resource Centre. 

Alongside Carroll's brands, Sans Beast, Rocc Naturals, Team Timbuktu and Borne Clothing have come on board to donate unworn samples and excess stock to the cause. 

Speaking on the program, Carroll said while it's a challenging time for business right now, she wanted to focus on something positive. 

"It’s a hard time to be a small business but even harder to be in the fashion industry right now. 

"Instead of focusing on what is out of our control, we shifted focus to what we can do to contribute to those who are living through far harder circumstances than our own. 

"We put a call out to local brands for fresh, unworn samples and excess stock to share with the Afghan community who will hopefully be resettled here. 

"Many of whom have come with nothing but the clothes on their back which is a situation almost unfathomable to many of us. 

"The response was incredible and we are working closely with MSCWA to coordinate our efforts to supply these goods to those who have recently arrived and are going through their quarantine periods at the moment," she said. 

1 Sep, 2021
Rebel's in-store shoe recycling has collected more than 37,000 pairs of shoes
SOURCE:
Ragtrader
Ragtrader

Rebel's in-store shoe recycling program has recycled 37,158 pairs of shoes, parent company Super Retail Group has revealed in its 2021 Sustainability Report. 

This is a 54.8% increase year-on-year for the retailer, which recycled 24,000 pairs in FY20 (from November 2019 to May 2020).

The program, which was launched as part of the Australian Sporting Goods Association (ASGA) Save Our Soles initiative, allowed customers to drop off their old sneakers for recycling.

The old sneakers are then turned into gym mats, retail flooring and anti-fatigue mats. 

According to ASGA, the program aims to reduce the waste created from the 25 million pairs of sports shoes imported to Australia each year. 

So far, Save Our Soles program has collected 100,000 pairs (32 tonnes) of shoes from participating retailers. 

Other key sustainability highlights for Rebel during the year include the introduction of a new display box for surf/sea products.

In partnership with its trade partner, Rebel redesigned the traditional plywood display rack to be instead made from recyclable cardboard. 

The packaging resulted in a 64% cost reduction, a 35% display area reduction and created less waste, with the rack able to be recycled at the end of its use. 

Additionally, Rebel will be the first of the Super Retail Group (SRG) brands to offer customers a new degradable gift card. 

Rebel will receive the new cards in September 2021, with the other brands set to receive their stock by December 2021. 

"Our aim is to move all gift card stock to a more environmentally friendly option over the next 12 to 18 months," SRG said in its report. 

Rebel also increased its support of women in sport in FY21, deepening its relationship with women's sporting codes throughout the year. 

"We deepened out relationship with Football Australia and the national women's team, the Matildas," Rebel said in a statement. 

"We also extended support of female professional sporting leagues and young elite athletes, presenting the following awards: 

- NRL Women's: Rebel Rookie of the Year 
- Suncorp Super Netball: Rebel Rising Star 
- WBBL (Cricket): Rebel Young Gun 
- AFLW: Rebel Young Leader." 

The awards included a cash prize and access to the Rebel Women's Mentoring Program - an online leadership and education program. 

1 Sep, 2021
David Jones’ profit rebound may prove short-lived
Financial Review

David Jones’ profits rebounded strongly in 2021, but the turnaround may prove short lived, with lockdowns in NSW and Victoria crunching sales in the first half of 2022.

David Jones’ South African parent, Woolworths Holdings, said the department store’s adjusted operating profit soared 282 per cent to $A84 million in the 12 months ending June after it cut costs, closed its loss-making stand-alone food stores, introduced new brands, cut back on markdowns and made more targeted offers to customers.

Sales rebounded 17.1 per cent in the June half, after falling by 17 per cent in the same period last year, lifting sales for the year by 2.3 per cent. David Jones said it received $35 million in Jobkeeper subsidies in the first half.

Online sales rose 24.4 per cent to 17.3 per cent of total sales and sales in David Jones’ Elizabeth Street flagship store grew 16.6 per cent, notwithstanding the drop in foot traffic in the Sydney CBD, after major renovations were completed last year.

However, Woolworths chief executive Roy Bagattini said the retailer had been hit hard by lockdowns in NSW and Victoria after being forced to temporarily close 70 per cent of its stores.

1 Sep, 2021
Blundy follows Five V out of Universal Store
Financial Review

Brett Blundy’s BBRC International has sold its 16 per cent stake in youth focused retailer Universal Store in a block trade via Morgans.

The stock was sold at $7.20 a share in an $84 million trade on Thursday morning.

Blundy’s stock was released from escrow on Wednesday, when Universal Store presented its FY21 results.

The trade piggybacked on fellow Universal Store investor Five V Capital’s sale, which happened on Wednesday night.

Morgans also did that trade at $7.20 a share, which was a premium to the last close of $7.15.

The stock is understood to have been snapped up by fund managers.

It’s big news for Universal Store, which listed in November last year and was previously owned by a syndicate of private investors including Five V and BBRC.

Between BBRC and Five V, 23 per cent of the company changed hands overnight.

 

1 Sep, 2021
Newly-listed Best & Less delivers record profit
Inside Retail

Best & Less’ first financial year as a public company exceeded its own expectations, with strong earnings and like-for-like sales growth driving a net profit result 191 per cent up on the prior year.

The department store business saw total sales hit $663.2 million, up 6.1 per cent, and its online division made up 9.2 per cent of total sales while like for like sales grew 10.8 per cent.

Earnings before interest, tax, depreciation and amortisation jumped 165.2 per cent to $71.6 million, leading net profit to hit $47 million for the year.

Best & Less Group chief executive Rodney Orrock said he was very pleased to deliver a record result in the business’ first year as a listed company.

“Our record profit and high margin outcomes, despite continued disruption from Covid-19, were the result of disciplined execution of our strategy, centered around conveniently delivering a growing family’s clothing essentials, and a focus on effectively managing the things we can control, including our inventory and costs,” Orrock said.

“In this challenging environment the deep retail sector experience of our management team pays off, enabling us to respond effectively to rapidly changing conditions.”

During the year the business made progress on a number of key initiatives, such as improving the experience of its online platform and investing in expanding click-and-collect and ship-from-store capabilities amid the increasingly online trading environment.

However, with bricks-and-mortar trade is currently being impacted by lockdown restrictions across Australia, Best & Less’ main goal for the year ahead is to remain as flexible and productive as possible to prepare it for the inevitable relaxation of restrictions.

“FY21 was a fantastic year for BLG, demonstrating the strength of our customer proposition, growth strategy and ability to execute and be agile in challenging times,” Orrock said.

“While FY22 is off to a challenging start … our strong team and results focus will hold us in good stead through the next few months until vaccinate rates and conditions normalise.”

1 Sep, 2021
City Chic’s online focus pays off in FY21
Inside Retail

Plus-size fashion firm City Chic has enjoyed the consumer-led switch to online retail, with 73 per cent of its FY21 total sales of $258.5 million coming through its online.

The business’ global active customer base, now spread across Australia, New Zealand, the US, UK, and European markets, hit one million for the first time this year, driving an underlying net profit growth of 80.6 per cent to $24.9 million.

“Our strategic vision to lead a world of curves has taken a huge step in the last twelve months, despite the impacts of the pandemic,” said City Chic chief executive officer Phil Ryan.

“Our razor-sharp focus on the three pillars of plus-size, digital and global customer acquisition have again delivered strong results.”

In Australia and New Zealand, the business saw topline sales growth of 27.1 per cent to $144.5 million, and is currently working on transitioning a number of its stores to new fit-outs, while 14 holdover sites are currently permanently closed with no rent deals reached with landlords.

The business’ US e-commerce sites, Avenue, City Chic and Hips and Curves, contributed $94 million of sales to the business this year, though the business had to pay higher logistics costs due to temporary freight surcharges in the first half.

City Chic also made a number of acquisitions throughout the year, namely the Evans brand in the UK and the Navabi brand in Europe. Both businesses are now trading above pre-acquisition levels, as the regions continue to move toward a ‘normal’ trading environment.

And, in an effort to further penetrate the US market, City Chic’s products will soon be available on a number of online marketplaces: eBay and The Iconic in Australia, Walmart, Amazon and Target in the US, Debenhams, Amazon and Very in the UK, and Zalando in Germany.

“Heading into FY22 City Chic is focused on the strategy of delivering its significant product range to the global plus-sized market through its global digital and physical storefronts,” the business said.

Part of this strategy will see the Evans and Avenue brands brought to Australia to cater to a more ‘conservative value’ product opportunity, as well as further expand into marketplaces across the regions as the year goes on.

1 Sep, 2021
Lovisa recovers from rough start to deliver strong FY21
Inside Retail

ewellery retailer Lovisa has delivered strong growth over FY21, with revenue up 18.9 per cent to $288 million and earnings before interest and tax 39 per cent up to $42.7 million.

While the business’ first quarter was heavily impacted by store closures in Victoria, the remainder of the year saw improved performance and positive comparable store sales, with a gross margin of 77 per cent delivering a net profit of $27.7 million – 43 per cent up on last year.

“We’re pleased with the performance of the business for the year, in particular with the sales performance we saw across most markets since the end of [the first quarter] with solid trading despite the continued global challenges we face,” said Lovisa managing director Shane Fallscheer.

Cost of doing business was tightened as well, at 56 per cent of sales, despite higher logistics costs due to increased freight costs.

And while the business’ international store rollout has slowed due to the onset of the pandemic, Lovisa hit 544 stores worldwide at the end of FY21 and is now refocusing on finding new opportunities for store openings in its markets.

Online continued to deliver growth while new stores were put off, however, with total digital sales up 178 per cent on the year prior. And online will continue to be an important channel for the business for as long as its stores run the risk of being closed.

Lovisa currently has 106 stores currently shuttered due to lockdowns: 82 in Australia, and 24 in New Zealand.

1 Sep, 2021
Retail sales take biggest hit since first COVID-19 wave
Financial Review

July retail sales recorded the largest monthly fall since the early days of the pandemic as prolonged lockdowns in Sydney and Melbourne and other stay- at-home orders constrained spending.

Sales nationally fell 5.6 per cent month-on-month and were down 6.3 per cent compared with July last year, according to Mastercard SpendingPulse data, though trading remained elevated on 2019 levels.

Paul Zahra, chief executive of the Australian Retailers Association, said the data showed the extent of damage to business and livelihoods being caused by the highly contagious COVID-19 delta variant.

“‘For lease’ signs are becoming a more common feature on CBD shopfronts in Sydney and Melbourne where the delta devastation has been more severe,” Mr Zahra said.

Clothing retailers took the biggest hit, falling 20 per cent over the month, while department stores fell 5.4 per cent and food retailing eased by 1.2 per cent. Only household goods increased, at 0.8 per cent.

1 Sep, 2021
Stockland back in black with $1.1b profit
SOURCE:
The Age
The Age

Booming demand for warehouses and logistic hubs together with a spike in housing settlements has propelled property giant Stockland back into the black with a $1.1 billion statutory profit for the pandemic-hit 2021 financial year.

That profit compared to a $21 million loss in the prior year and was bumped up by solid valuation gains across the industrial sector, and stabilisation in market conditions for the office and retail assets.

The $10.8 billion ASX-listed Stockland is a diversified company that develops, owns, manages and invests in residential - it is the country’s largest home and land developer - retirement living, office and commercial sites and malls and large retail town centres.

The funds from operation (FFO), being the metric used to measure revenue that excludes lumpy property valuation movements, fell 4 per cent to $788 million. It was in line with market expectations, but brokers warned of a mixed year ahead due to ongoing uncertainty from the global pandemic and lockdowns.

A distribution of 24.6¢ per security was declared, 2.1 per cent above 2020, representing a payout ratio of 75 per cent of FFO. It will be paid on August 31.

Underpinning the result was demand for house and land sales with net volumes up 54.2 per cent versus the 2020 year to 7,700 lots and settlement volumes up 19.8 per cent to 6,374 lots. This was boosted by low-interest rates and a move by people from inner urban to suburban communities.

Stockland’s newly appointed chief executive Tarun Gupta, who was the former chief finance director at Lendlease and replaced the retiring Mark Steinert in June, will undertake a review of the business which will see a pivot away from the traditional retail and retirement business with cash raised from asset sales to fund the development pipeline and the new land lease, manufactured homes business.

He said FFO guidance for 2022, is between 34.6-35.6¢, implying a wide range of between 4.5 per cent to 7.6 per cent growth.

“While varying levels of uncertainty with COVID-19 remain, Stockland is in a strong position to respond and adapt. Continuing residential sales momentum, a significant development pipeline and a strong balance sheet, position us well for future growth,” Mr Gupta said.

“Current market conditions remain challenging with ongoing lockdowns and community transmission of COVID-19. All forward-looking statements including 2022 financial year earnings guidance are provided on the basis that the vaccination roll out continues and COVID-19 restrictions ease towards the end of calendar 2021.”

The booming logistics business it will be boosted by the new $1.4 billion Melbourne Business Park in Truganina in the western corridor and expansion of the M_Park in Sydney’s Macquarie Park tech hub.

Stockland’s retail appears to be on a less negative trajectory, with rent collections at 97 per cent and occupancy at 99 per cent. The repositioning of the Retail Town Centre assets over the last three years has seen 75 per cent of sales now generated by essential everyday goods and services.

Mr Gupta said the recent Halcyon acquisition will drive the land lease business in the coming year. Stockland acquired Halcyon in July, and are targeting 250 settlements this year, growing to 350 settlements each year over the medium term.

Under the land lease scheme, a resident buys the house but rents the land on which it sits from Stockland, creating a more affordable entry to the booming market.

JP Morgan’s Richard Jones said it was a solid result with residential sales remaining strong in the fourth quarter with Stockland taking a large carry forward of settlements into the coming year.

“The trust performance is broadly in line and Stockland has a growing commercial development pipeline,” Mr Jones said.

1 Sep, 2021
Plans for NSW retail to somersault into action with hairdressers, nail salons likely to open first
The Australian

The Berejiklian government is poised to announce a reopening of some retail businesses in low-risk areas of Greater Sydney during September, under plans to ease restrictions and begin a tentative economic revival, even as cases remain high across some ­parts of the city.

The plan, likely to be finalised on Wednesday afternoon and ­announced on Thursday, would see a limited reopening of businesses in less-affected LGAs, with services available to those who are vaccinated.

It is understood nail salons and hairdressers, which were among the first retailers to reopen following a state-wide lockdown in NSW last year, will be the likely beneficiaries.

Gladys Berejiklian announced NSW had reached its six millionth jab on Tuesday morning.

“Because we have hit that milestone, I look forward to making the announcement on Thursday or Friday this week as to what fully vaccinated people will be able to do from the month of September because of the target we have set,” the NSW Premier said.

Ms Berejiklian said 30 per cent of the eligible population has now received two doses.

“I am proud that during our darkest time everybody has come forward and is doing the right thing (with vaccinations).”

The target of six million inoculations had been planned for the end of ­August but has been hit a week early.

One of the nation’s peak hospitality associations meanwhile is urging the NSW government to consider plans for a revival of outdoor dining in September as part of its roadmap to recovery.

Restaurant and Catering Australia chief Wes Lambert said lockdowns had proven catastrophic for his industry and the resumption of outdoor dining, in areas where there had been few or no cases of Covid-19, would assist with a much-needed recovery.

“We are pleading with the ­government to ensure that there is some level of hospitality ­included in the roadmap for the lowest-risk LGAs,” Mr Lambert said. “We’re losing $228m a week. It’s a multi-billion problem in NSW. Without JobKeeper, and without the stimulus and the ­insolvency protections of 2020, it is important the hospitality industry is not left in the dust.”

On Monday, health officials announced 818 locally acquired cases of Covid-19, with at least 42 of these cases known to be infectious in the community.

Three deaths were also reported – two men and one woman, all of whom were aged in their 80s, all of whom had underlying health conditions.

The Premier appeared to once again sharpen messaging on the growing redundancy of case numbers, saying it was her hope that by October the state would hit a vaccination target of 70 per cent, which would allow officials to focus on hospitalisations and “treat Covid as you would the flu”.

“If we keep working the way we are, we’ll get to that target ahead of the end of October,” she said.

“It all depends on us continuing to keep that up. Some countries … have noticed a slight pause when the population gets to 60 per cent double doses … but I don’t have those concerns in NSW.”

Health and education officials are continuing to deliberate over plans to allow a return of face-to-face schooling, although gov­ernment officials have told The Australian this is more likely to occur in term 4, which begins in October.

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