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Major retailers have called on the Morrison government to order a total shutdown of all non-essential stores and services including shopping centres or risk causing more damage to a sector already struggling to stay afloat.

Premier Investments, footwear retailer Accent Group, jewellery chain Lovisa, menswear retailer Retail Apparel Group and APG & Co, which owns Saba, Sportscraft and Jag, have joined Michael Hill and Mosaic Brands in closing all their Australian stores.

The federal government has been reluctant to date to order the closure of all non-essential services in an attempt to protect parts of the economy.

But a growing number of discretionary retailers are taking the matter into their own hands to protect staff and customers and after seeing a sharp slump in foot traffic. Traffic in shopping centres fell 46 per cent year-on-year last week, according to ShopperTrak data, as consumers heeded the government's advice to practice social distancing.

Some retailers, including Premier, Accent, Lovisa and Mosaic Brands, which owns Noni B, Katies and Millers, say they won't pay rent on shuttered stores, adding to pressure on landlords to provide rent relief.

"How can we have people walking around shopping centres that have potentially got the virus – it's just irresponsible," said Daniel Agostinelli, the chief executive of Accent Group, which is shuttering all 522 Platypus, Hype and Athletes Foot stores and standing down about 4500 staff.

"To me it's absolutely irresponsible the shopping centres are still open," Mr Agostinelli said. "I'm absolutely amazed that is not being done, given the advice to the public."

"We would support a full lockdown of shopping centres," said Lovisa chief executive Shane Fallscheer, who is closing Lovisa's 155 Australian stores and standing down about 800 full and part-time staff.

Lovisa stores are now temporarily closed in eight countries – Australia, New Zealand, South Africa, France, Spain, Malaysia, the US and the United Kingdom.

The retailer has stood down all store staff in markets that have closed and is cutting jobs at support centres around the world through a combination of temporary stand-downs and redundancies. The retailer suspended its 15¢ a share interim dividend to save $16 million in cash and increased and extended its financing facilities for a further three-year term.

"I would have preferred a total lockdown,'"said Alceon Retail director Richard Facioni, the chairman of Mosaic Brands, which has closed almost 1400 stores and stood down almost 7000 employees.

"My sense is the government is doing everything they can to avoid total lockdown and doing everything they can to preserve parts of the economy – they'll only want to go to the next step if they absolutely have to," Mr Facioni said.

"What is happening is the retailers are making the decision for the government – as each retailer shuts there is less of a reason for customers to go to these centres – it's a self fulfilling prophecy," he said.

No choice

Premier Investments chief executive Mark McInnes said the retailer had no choice but to temporarily close all of its 900-odd retail stores in Australia for four weeks until April 22 and stand down about 7000 staff. Premier's entire executive team has also been stood down and will work from home with either no pay or reduced leave entitlements.

Premier, which owns Smiggle, Dotti, Peter Alexander, Just Jeans, Jay Jays and Jacqui E, has also been forced to close all stores in New Zealand, the United Kingdom, and Republic of Ireland. Globally, the store closures will impact over 9000 employees.

"This is the hardest decision ever made by Premier – our team are our family and we want to do everything we can to keep them employed," Mr McInnes said, "but we believe that it is necessary and the right decision for them, their families, our customers, and the country."

In an escalation of its long-running fight with landlords, Premier said it would not pay any rent globally for the duration of the shutdown. In Australia and New Zealand, almost 70 per cent of its stores are already in holdover or with leases expiring in 2020, strengthening the retailer's negotiating position.

"Everyone in the value chain is having to endure some pain," said one retail analyst, who declined to be named.

"The banks seem to understand they have a social licence (to operate), the landlords don't seem to recognise they have a social licence," he said.

Citigroup analyst Bryan Raymond said in a sales environment where foot traffic is down 20 to 30 per cent, closing stores would reduce cash burn, compared to staying open and paying staff and rent.

"[Premier's] staff and rents costs accounted for $527 million in 2019 (42 per cent of overall group sales), and should provide Premier enough headroom to withstand weaker trading conditions in the coming months, particularly given their strong balance sheet," Mr Raymond said.

Super Retail suspends dividend

Super Retail Group's Supercheap Auto, Rebel, BCF and Macpac stores in Australia continue to trade but it has been forced to close 81 Supercheap and Macpac stores in New Zealand, which accounts for about 7 per cent of annual revenues.

As reported earlier this week, the retailer considers itself an essential services retailer because it sells products such as hand sanitisers and wipes, batteries, water filters and water-purifying products, portable gas and fuels, and supplies local governments and emergency services.

The outdoor leisure and sporting goods retailer was hit hard by the bushfires but has enjoyed strong sales growth in the last five weeks, with same-store sales at Supercheap Auto up 7.5 per cent, Rebel up 1.6 per cent and Macpac up 5 per cent, offsetting a 3 per cent decline in sales at BCF stores. This lifted total sales growth for the year to date to 2.7 per cent. Gross margins had also held up.

But the company has cancelled its interim dividend to save $43 million cash and has secured a new $100 million banking facility with ANZ Bank to provide more financial flexibility.

"While the business has performed solidly over the year to date period, the outlook for sales for the balance of the year is now highly uncertain," said chief executive Anthony Heraghty.

The COVID-19 crisis may also be the final nail in the coffin for accessories retailer Colette by Colette Hayman, which fell into voluntary administration last month. The administrators closed 33 underperforming stores last month in an attempt to lure buyers and have now been forced to close the remaining 105 stores.

Recent retail commentary over the past two months has been dominated by doom-and-gloom headlines, and there’s no question the sector is suffering significantly from the coronavirus outbreak.

But that may be all the more reason to take a closer look at the most successful retailers in Australia, and try to determine what they’re doing right.

When JB Hi-Fi’s results were revealed last month, we all sat up and took notice. While various businesses are closing up shop or being significantly restructured in the hands of administrators or receivers – think Harris Scarfe, H&M and Bardot – JB Hi-Fi delivered sales results that eclipsed even the good performers. Again.

So, what do they continue to do that the others do not?

They say retail is detail and in the case of JB Hi-Fi, these guys are the master of every little detail – ruthlessly focussed on excellent execution and staying true to the brand’s roots. The value proposition holds firm: great brands at great prices with great in-store advice in great locations.

There really is no rocket science here, just excellently executed retailing.

As a brand, JB continues to excel in everything that is ‘personal and family entertainment’, leveraging that expertise and well-earned trust to broaden into adjacent categories. This has played out through tech-based categories and also white goods which has been further strengthened with the successful acquisition and assimilation of the Good Guys a few years ago.

Being masters in tech allows JB to surf the endless wave of our ever-growing reliance on connectivity at home, at work, at school and everywhere in between. This category also contributes enormously to one of their key success metrics which is sales per square metre while lending itself brilliantly to a growing online sales channel.

Add their ruthless focus on the cost of doing business and it’s no wonder JB continues to go from strength to strength.

It would be easy to underestimate JB’s seemingly ‘homemade’ approach to digital advertising, catalogues (yes, they still use these) and instore communications and signage, but make no mistake, it takes an astute eye to maintain this ‘local expert’ tone across such a burgeoning network of stores and a flotilla of webpages.

Paradoxically, the commitment to high-quality store sites in high traffic, high visibility locations must come with above-average cost but doing the maths equation means that their other costs are kept incredibly low.

As I said, no rocket science here, just a ruthless commitment to great brands in valued categories, in the right locations, at great prices, supported by knowledgeable staff.

It begs the question of what other brands can do to be more like JB. It’s almost a case of going back to first principles. Break down your business to the bare basics and ask yourself, are your stores in the right locations? For JB, this has meant closing several locations and opening others in the past six months. It’s not an easy decision to make but the impact to your bottom line could be dramatic.

It also pays to invest in providing class-leading customer experience. Are your staff informed about your products and do they deliver a level of service that keeps people coming back?

Also ask yourself what are you famous for? If it’s nothing, find something quickly and own it.

Otherwise you’re in a load of trouble. And if you are famous for something, ask yourself how you can leverage that strength into adjacent categories that ‘make sense’ for your customers.

Growing market share is paramount when the market is not growing and this is one tried and true way to do that.

Getting back to these brilliant retail basics can make all the difference, especially in times where consumers feel under siege to the point of being highly discerning with their discretionary dollar.

JB Hi-Fi makes it look easy but given the state of Australian retailing at present, it’s obviously hard done.

Craig Flanders is the CEO of full-service agency Spinach. The agency’s clients include Baby Bunting, Drummond Golf, Liquorland, Sportsco and The Reject Shop.

In these crazy times, we are all concerned about the health of our families and staff, especially those at high risk, such as frail parents and grandparents.

I have a friend with Type 1 diabetes, who has an estimated 7 per cent mortality rate if infected. We need to keep ourselves healthy for people like that.

Of course, we are also worried about the future of our businesses, our own jobs and the jobs of the people we employ.

Retail in general almost certainly has a difficult few months ahead (toilet paper sellers aside), but how about online retail?

In the days of quarantine and self isolation, is this an opportunity for online retailers? And if so, how do we forecast in such an unprecedented period?

I spoke to 15 Australian online retailers across a range of industries – including fashion, beauty, exercise equipment, baby, toys and more – and sizes. The smallest turns over $5 million a year; the largest well over $100 million. All data was provided on condition of anonymity. 

The question I asked each of them was this:

What was the change in revenue in the week from Tuesday, March 10 to Monday, March 16, compared to a month ago, Tuesday, February 11 to Monday, February 17.

The average is -1 per cent revenue month on month, but as always, there’s a lot of detail lost in averages.

All this data was provided with strict anonymity, and the range of categories was too wide to be able to provide any category-level analysis. But still, here are some insights:

• A few of the winners are beneficiaries of stockpiling. My informal survey didn’t include any toilet paper suppliers, but I did speak to a few retailers offering essential/desirable supplies that would be handy in the event of a quarantine. 
• Some of the biggest losers are companies that sell highly social products, or products that are generally used in public. 
• There are a few anomalies, which I don’t have a good explanation for. For example, my survey included a few fashion companies, and some reported quite negative results, and others quite positive. 

Here are some things to consider when forecasting:

• At the moment, many people are spending money to stockpile essential items, which may temporarily divert funds from more discretionary purchases. 
• Even if you can predict sales, you need to be working closely with your suppliers and logistics providers. They are facing their own set of challenges and may not be able to meet their normal order volumes or delivery deadlines. 
• Warehouse staff can’t work from home, so you need to consider how you will respond if there’s an infection at your warehouse. I’m hearing rumours that warehouse staff are calling in sick already, and warehouses are understaffed. 
• Will Australia’s internet infrastructure be able to cope with the massive influx of workers – and possibly soon students – working from home? This remains to be seen. 
• Discounting seems to be all but inevitable. Even if you are one of the winners, it’s likely your bricks-and-mortar counterparts aren’t so lucky, and you may need to follow their lead. 

The biggest question to ask yourself is what is the opportunity for your business? Any change – even a bad one – presents an opportunity. 

Stay safe!

LVMH announced today that it is converting three of its perfume manufacturing facilities where it normally makes fragrances for its Christian Dior, Givenchy and Guerlain brands to make hand sanitizer instead. The first deliveries will be tomorrow and by the end of the first week, LVMH expects to have made 12 tons of the hydroalcoholic gel. The product will be given at no charge to French authorities and the largest hospital system in Europe.

LVMH is accomplishing several things with this move. It is, of course, responding to a shortage of hand sanitizer. But more than that, it is positioning itself to its consumers and its employees as doing what’s in the public interest. It is also justifying having its factories remain open and keeping its employees coming to work. All of those things make the company more purposeful and less commercial.

What’s so interesting about LVMH’s move is how quickly they are doing it and their understanding of what luxury means right now. Luxury used to be providing the highest quality products—now it means that and more. A true luxury business has to fill consumers’ needs at the highest level and by converting to hand sanitizer manufacturing, LVMH is doing just that. This moment is unique; at any other time, hand sanitizer for a luxury company would make no sense. But in this moment, perhaps even only this week or month, it’s appropriate and commendable to make what would normally be the most un-luxurious product and LVMH gets that. It is a great example of why they continue to be a leader in luxury.

It’s also interesting that LVMH did not present its switchover as producing its own branded hand sanitizer. There’s no indication that the hand sanitizer it is producing will be for one of its brands; it appears to be no-named. It’s counter to the idea that everything produced at the company is a luxurious product for high-end consumers. It’s highly flexible thinking that allows management to act in this way.

We are in a time where shutdowns will reduce profits all over the world. That is taking time for people to adjust to because it is happening so rapidly. What’s needed in this moment is for brands to look beyond the profits they are losing and ask what else they can do to preserve their position during this very difficult time for everyone. That’s what LVMH is doing.

What should other brands that have fewer resources than LVMH be doing now? It requires management to look inward and ask: what do I have that could help someone, anyone, right now? What’s in short supply that I have or could get in abundance? That is clearly the approach that LVMH took and it now falls on all of us to ask that question of ourselves.

Butcher Gary Hine has been running his shop in Mundaring, in Perth's hills, for 13 years and is a big believer in good, old-fashioned customer service.

But as the number of confirmed cases of coronavirus rises in Western Australia, he is becoming increasingly concerned about the health of his staff and customers.

So, from next week, he'll shut up shop — instead operating his business 100 per cent online.

"It's not a decision we took light-heartedly," Mr Hine said.

"There were a lot of sleepless nights with different scenarios going around in my head.

"But the most important thing is that we keep ourselves safe, our staff safe and our customers safe."

From Monday, customers will not be able to enter his butcher shop, instead placing their orders online, waiting for a notification telling them their produce is ready, pulling into the car park and having their meat loaded into their vehicle.

Mr Hine said he had a loyal customer base and was confident they would support the new business model.

"There's a lot of speculation out there at the moment that it's going to be all doom and gloom," Mr Hine said.

"I see it as an opportunity to adapt and to continue to keep our doors open and service the people who have looked after us for so long."

"It's a lot better than us getting sick and having to shut the doors."

'We can make sure everyone at least has toast'

Further south, the Coogee Beach Bakery has just launched a free delivery service so that its customers, many of them elderly, can get staples like milk and bread dropped off at their door.

Owner Jackie Mayoss said the decision was a no-brainer for her and she was prepared to wear the delivery cost in a bid to support her local community.

"We know all of the streets, we know all of the customers. We're happy to drop things off and make sure they're OK," Ms Mayoss said.

"We're not going to be making extra money but it's nice to be able to help your neighbours.

"We can't do a lot, but we can make sure that everyone can at least have toast."

Books to your door

Sam Baker and his partner Natalie Latter founded their bookshop, Rabble Books & Games, in Maylands, almost two years ago.

In the wake of coronavirus, the pair has also launched a free home delivery service for customers who may not be able to — or want to — enter the store in person.

"We are very keen to always be participating in our community and creating a space that is inclusive and is safe, and [the question is] how do we continue to do that?" Mr Baker said.

The delivery service will operate in Maylands and nearby suburbs, but Mr Baker said people had volunteered to make deliveries further afield.

"For the most part, it's going to be me driving the hatchback around," he said.

"We do really have an obligation, especially as a public space, to make sure that we are doing everything we can to, as they say, flatten the curve."

Mr Baker hopes the new service will enable him to continue to pay his four casual staff members, even if they have to self-isolate at home.

"I don't think there's anybody who works here who doesn't depend on that income," he said.

"It's going to be pretty tight coming up.

"There are a lot of changes that I think we're going to have to make on the fly.

"We're going to have to adapt to the situation as it develops."

This week the WA Government announced an economic stimulus package worth $607 million in an attempt to stave off the impacts of the coronavirus outbreak.

It includes a one-off grant of $17,500 for small to medium businesses with a payroll of between $1 million and $4 million.

It will cost the Government $114 million and is expected to bring relief to 7,400 businesses in WA.

Premier Retail CEO Mark McInnes has issued a missive to landlords.

"Respond to the current crisis."

Premier Retail has confirmed it has closed two stores in Hong Kong since the COVID-19 outbreak.

McInnes, who has had a long-running campaign against major landlords, said the current climate requires a swift response.

“Landlords have a major role to play to ensure retailers can operate in the short term for the long-term benefit of all stakeholders.

"Since the outbreak of COVID-19, we have closed two stores in Hong Kong and we are prepared to close many more stores globally if landlords do not respond to the current crisis.”

Premier Retail owns a number of prolific fashion brands including Peter Alexander, Just Jeans, Portmans, Jay Jays and Dotti.

McInnes and billionaire Premier boss Solomon Lew have long campaigned for fairer rental rates.

Key points:

• Stationery retailer Kikki.K has gone into voluntary administration, putting up to 450 jobs at risk.
• Co-founder and CEO Paul Lacy said a recent potential partnership with a “big global business” fell through.
• The announcement follows the collapse of a number of other retailers, including Bardot, Jeanswest and Colette by Colette Hayman.
• Visit Business Insider Australia’s homepage for more stories

Stationery retailer Kikki.K is the latest casualty of Australia’s retail bloodbath, with the Melbourne-based global chain announcing its collapse into administration today – putting up to 450 jobs at risk.

In a statement, founder Kristina Karlsson announced the company would enter voluntary administration.

“It is with profound regret and sadness that we take this action,” she said. “This business began with a young girl’s dream 20 years ago and became an international success story with customers in over 150 countries.”

Co-founder and CEO Paul Lacy said all efforts had been made to save the business, including a potential partnership with a “big global business” which fell through. “We ran out of time and no choice but to place the company into external administration,” he said in a statement.

The administration is to be handled by Jim Downey of J.P. Downey & Co. The company has also been placed into receivership under receivers at Cor Cordis, who will operate the business while “its future is determined”.

The collapse of Kikki.K follows a number of other retailers who have been unable to maintain their fortunes during an extended rough period for the sector in Australia. In recent months, companies including Bardot, Jeanswest and Colette by Colette Hayman have all faced the administrator’s blade in pursuit of continuing viability.

The company has retail locations across Australia, New Zealand, Singapore, Hong Kong and the UK, and sells online to 140 countries worldwide.

Former CEO of David Jones Paul Zahra will succeed Russell Zimmerman as chief executive of retail’s peak industry body, the Australian Retailers Association, in May.

Zahra said he was optimistic about the future of retail and looking forward to supporting and advocating for the ARA’s members.

“In the last twenty years, the disruption and transformation of the sector has been significant as a result of ongoing changes in technology and consumer behaviour,” he said in a statement announcing his appointment on Thursday.

“However, what excites me is the untold story of innovation, whether in store formats, in online marketplaces, or the many small businesses that started life in someone’s living room.”

Creating “one voice” for all retailers

The ARA council said Zahra has the leadership skills and retail expertise to transform the ARA into “one voice” for small, medium and large retailers, after a long-planned merger with the National Retail Association (NRA) fell through last year.

“Paul brings a deep understanding of retail and the issues and opportunities faced by the industry and our members,” said ARA president Rowan Hodge.

“His inclusive and progressive leadership style, retail and digital expertise, broad networks, experience leading transformation, and strong vision for the ARA and the future of retail will be invaluable as the organisation moves forward.”

Hodge also thanked Zimmerman for his commitment to the ARA and its members for the past decade.

Zimmerman announced his retirement plans last November, saying he was making way for a new leader who had “the energy, youth and wherewithal” to take the ARA into its next phase.

From Sunshine to CEO

Zahra has worked in retail from the age of 16, when he was hired as a causal shop assistant at Target Sunshine, before being promoted to become the chain’s youngest ever store manager at the age of 22.

He went on to hold senior leadership roles at Target, Officeworks and David Jones, where he rose through the ranks to became CEO.

Zahra is a long-time champion of diversity and inclusion in the workplace and previously served as the chair of PwC’s diversity and inclusion advisory board.

Recently, he has been advising companies and boards of startups, small businesses and private equity on a range of issues, including leadership, disruptive change, digital transformation and diversity and inclusion.

LVMH announced today that it is converting three of its perfume manufacturing facilities where it normally makes fragrances for its Christian Dior, Givenchy and Guerlain brands to make hand sanitizer instead. The first deliveries will be tomorrow and by the end of the first week, LVMH expects to have made 12 tons of the hydroalcoholic gel. The product will be given at no charge to French authorities and the largest hospital system in Europe.

LVMH is accomplishing several things with this move. It is, of course, responding to a shortage of hand sanitizer. But more than that, it is positioning itself to its consumers and its employees as doing what’s in the public interest. It is also justifying having its factories remain open and keeping its employees coming to work. All of those things make the company more purposeful and less commercial.

What’s so interesting about LVMH’s move is how quickly they are doing it and their understanding of what luxury means right now. Luxury used to be providing the highest quality products—now it means that and more. A true luxury business has to fill consumers’ needs at the highest level and by converting to hand sanitizer manufacturing, LVMH is doing just that. This moment is unique; at any other time, hand sanitizer for a luxury company would make no sense. But in this moment, perhaps even only this week or month, it’s appropriate and commendable to make what would normally be the most un-luxurious product and LVMH gets that. It is a great example of why they continue to be a leader in luxury.

It’s also interesting that LVMH did not present its switchover as producing its own branded hand sanitizer. There’s no indication that the hand sanitizer it is producing will be for one of its brands; it appears to be no-named. It’s counter to the idea that everything produced at the company is a luxurious product for high-end consumers. It’s highly flexible thinking that allows management to act in this way.

We are in a time where shutdowns will reduce profits all over the world. That is taking time for people to adjust to because it is happening so rapidly. What’s needed in this moment is for brands to look beyond the profits they are losing and ask what else they can do to preserve their position during this very difficult time for everyone. That’s what LVMH is doing.

Myer has joined the list of retailers hit hard by the one-two punch of bushfires and coronavirus in the first half of FY20, posting a 26.9 per cent drop in statutory net profit after tax to $24.4 million.

The department store business saw total sales fall 3.8 per cent to $1.6 billion, though comparable sales rose 0.4 per cent excluding the impact of the exits of Apple and Country Road Group. Taking these exits into account comparable sales fell 3.6 per cent. 

Myer chief executive John King said the results were solid considering the macro headwinds hitting the industry at the moment, and shows the customer first plan is the right plan to transform the business moving forward. 

“Management has demonstrated discipline in a tough trading environment and while I am encouraged by the progress I am in no doubt that we still have considerable work to do,” King said.

Myer chief financial officer Nigel Chadwick added that though the first half trades at a positive cash position thanks to events such as Christmas, Black Friday and Boxing Day, the second half of a financial year is typically trades at a net negative.

And while the first half was impacted by bushfires and virus fears, it’s expected the second half could be worse hit.

“The challenging macro environment will continue in the second half, and the ongoing impact of the Coronavirus on store traffic remains uncertain,” King said. 

“The supply chain impact of Coronavirus is currently being managed by our teams in Hong Kong and Shanghai. The teams are focussed on mitigating the impact of delays to the planned delivery of merchandise.”

By the end of the week Myer expects its factories to be back up and running normally, after having been operating at 85 per cent capacity as of last week. 

Additionally, the business faces a four to six week delay in May due to the difficulty in sourcing goods, with King expecting goods shipped to stores to fall to around 40 per cent of normal levels through March.

“It’s a great opportunity to destock and focus on what stock we actually need,” King said. 

According to King footfall had been subdued in CBD and tourism-driven stores over the last few weeks, with the general decline in spending exasperated by a panic around the COVID-19 virus. 

Despite the headwinds largely hitting the business’ shrinking physical stores Myer’s online business grew 25.2 per cent during the period, now representing 10.5 per cent of total sales. 

King stressed that online had become Myer’s ‘biggest store’, and that despite the fact that only half of Myer’s range and half of it’s concessions were represented on the site, online profit was growing faster than online revenue.

In order to further grow this segment Myer will be merging its Myer Marketplace offering into the main website.

The growth in online sales volume wasn’t all good news for the business, however, with the diversity seen in basket types leading expected cost savings in shipping goods to fail to materialise. 

Outdoor clothing and equipment retailer Kathmandu has opened its first solar-powered store in Blackburn, Victoria, and is investigating the possibility of shifting more stores in its network to solar in order to reduce its environmental footprint.

“While it won’t be possible for solar power to be rolled out across the entire store network because many stores are located in large shopping centres not suited to individual solar systems, we intend to assess which of our stores could be adapted for solar power in the future,” Dean Smith, project manager for store development at Kathmandu, said.

The Blackburn store was selected because it is a large standalone store, making it well suited to the installation of a solar power system.

The system includes a solar-battery generator that will provide 100 per cent of the site’s energy need at 92,000 kilowatt-hours, offsetting over 124 tonnes of carbon dioxide emissions.

It also provides full battery backup power in the event of grid failure or overcast days, allowing the store to remain operational.

Kathmandu did not disclose the cost of the system, which has a five-year payback plan, but said it will eventually lead to substantial cost savings and even allow power to put back into the system.

“Kathmandu has been using sustainable practices for over 30 years and they are integral to our operations. Being able to improve our environmental footprint is one of our key pillars,” Smith said.

The move is just one of a range of initiatives the retailer has introduced to help it achieve its target of net zero environmental harm from business operations by 2025.

The two biggest components of this goal are becoming carbon neutral and having zero waste to landfill, according to Kathmandu’s 2019 sustainability report.

Smith said the shift to solar power in stores would “definitely contribute towards a zero carbon emissions goal”.

The system is installed but cannot be connected to the grid until a PVDB protection board is installed. This final piece of the puzzle requires parts from China, which are estimated to arrive later this month.

The most difficult part of the installation was learning about the new technology and dealing with wet weather, which led to a four-day delay, according to Smith.

A live feed of the store’s solar activities will be displayed on a monitor within the store, allowing customers to view the power generation versus usage.

There is increased concern about the virus's impact is spreading across Europe as companies warn employees against travelling to northern Italy, the country most-affected by coronavirus outside of Asia.  AP

Oxford Economics reckons an international health crisis could be enough to wipe more than $US1 trillion ($1.5 trillion) from global gross domestic product. That would be the economic price tag for a spike in workplace absenteeism, lower productivity, sliding travel, disrupted supply chains and reduced trade and investment.

Investors are already nervous, with US stock benchmarks slumping this week. The DJIA fell 3.2 per cent on Tuesday, and is now down 8.4 per cent in the past two weeks, while the S&P 500 shed 3 per cent in Tuesday trading, and is now down the most in two years.

For now, central bankers and governments are betting the coronavirus will not damage the world economy by much, and perhaps allow it to enjoy a rapid rebound once the illness fades. But that confidence is being tested.

After early gains, Wall Street plunged on Tuesday after a coronavirus warning unnerved markets. AP

Still, the protracted shutdown of Chinese factories that were supposed to be back online and the spread of the virus to South Korea, Iran and Italy's northern industrial heartland raise the specter of much greater death and disruption. The virus risks tipping Italy into a recession that could hurt the rest of Europe too.

South Korea's economy is being buffered, with consumer confidence plunging the most in five years.

UBS chairman Axel Weber is already far more pessimistic than the IMF and has warned global growth will experience a massive drop from 3.5 per cent to 0.5 per cent and China's economy will shrink in the first quarter for the first time since at least 1990, Bloomberg data shows.

“There is going to be quite a bit of impact that is going to go beyond the first quarter and that is where fiscal response, providing businesses with some tax relievers, some emergency funding, that is going to be very important for putting businesses through,” Weber said.

"The much larger downside risk is that this continues to be a problem," the former Bundesbank president said in Riyadh, where Group of 20 finance chiefs hinted at collective worries at the dangers of the virus.

How to assess the risk is complicated by doubt over how far the coronavirus will travel.

In an analysis that predates the current outbreak, the World Bank reckons a destructive pandemic could result in millions of deaths, and points to how even conservative estimates suggest such an experience might destroy as much as 1 per cent of global GDP.

A disastrous health crisis akin to the 1918 Spanish flu, which may have killed as many as 50 million people, could cost 5 per cent of global GDP, the Washington-based lender said in a 2015 report.

A March 2016 paper co-authored by former US Treasury secretary Lawrence Summers likened the annual financial impact of a pandemic flu to the long-term yearly cost of global warming. It calculated that if pandemic deaths were to exceed 700,000 per year, the combined cost to the world economy of premature lives lost and illness, along with lost income, would total 0.7 per cent of global income.

Oxford Economics's tally of the impact from a global pandemic stemming from the current outbreak suggests a cost of $US1.1 trillion to global GDP, with both the US and euro-zone economies suffering recessions in the first half of 2020. It describes such a scenario as a "short but very sharp shock on the world economy."

Aside from containment of the disease, one mitigating factor - and a major unknown for economists modeling the outcome - will be the actions of central banks and governments to cushion the effects.

"When we entered the year we certainly didn't think that central banks would be as eager to cut interest rates and to become even more supportive," said Credit Suisse Group's Nannette Hechler-Fayd'Herbe.

"Now, the answer is going to be quite dependent on how the coronavirus spreading is going to continue."

Yet for Drew Matus, chief market strategist at MetLife Investment Management, monetary policy alone would probably be insufficient.

"My guess would be you actually can't solve it with interest rates," he said. "People are worried about their families, worried about their health - 25 basis points doesn't do it, in terms of encouraging people to go out there and spend."

Bloomberg

NEW YORK, United States- Cosmetics maker Coty Inc has tapped Jimmy Choo Group boss Pierre Denis as its new chief executive, succeeding Pierre Laubies.

Denis, who has been on Coty's board since September 2019, will take the helm by summer this year upon the conclusion of a strategic review, the CoverGirl cosmetics maker said on Friday.

"He (Denis) brings 30 years of luxury, beauty and brand experience, having previously served in a variety of leadership roles with LVMH, notably with John Galliano, as well as with Christian Dior," Coty said.

Denis has since July 2012 served as the chief executive of Jimmy Choo, now part of US luxury fashion group Capri Holdings Ltd, which also owns Versace and Michael Kors.

Laubies, who joined Coty in November 2018, spearheaded the company's $600 million investment in reality star Kylie Jenner's beauty brands last year.

The company said Pierre-André Térisseas would assume the role of chief operating officer in addition to his current role as finance chief.

The cosmetics maker's board also elected Isabelle Parize and Justine Tan as non-executive directors.

Sales have rebounded at Super Retail Group's Supercheap Auto, Rebel and Macpac stores after disruption from the bushfires, but the retailer faces another potential threat this year from the coronavirus.

The auto accessories, sporting goods and outdoor retailer imports large amounts of stock from China and its Rebel and Macpac brands currently source from two factories in Wuhan, the epicentre of the virus.

Chief executive Anthony Heraghty does not expect the coronavirus to have a material impact on stock availability or consumer sentiment in the short term. However, if the virus stops workers returning to factories for several months supplies could be disrupted.

Despite the coronavirus uncertainty, Mr Heraghty is optimistic about the June half after a bounce in same-store sales at his two biggest brands, Supercheap Auto and Rebel, in January and February.

"Overall it's been a positive start to the second half," Mr Heraghty told investors on Thursday.

Supercheap Auto's same-store sales rose 3.1 per cent in the first seven weeks of the June half, up from 2 per cent in November and December, and Rebel same-store sales jumped 5.8 per cent, up from 3.4 per cent.

At Macpac, same-store sales were down only 0.4 per cent in January/February after plunging 13 per cent during the bushfires in November and December.

A case of no new surprises is probably good news in the market we're in.

— Grant Saligari, Credit Suisse analyst

However, trading remained weak at BCF, with same-store sales falling 8 per cent in January/February after sharp falls in November/December. Unless business picks up at Easter, the chain is likely to only break even in the June half.

'Credible' result in challenging times

The trading update followed a mixed December-half result, with underlying earnings before interest and tax falling 7 per cent to $115.4 million as rising costs offset higher sales. The result was in line with SRG's guidance in January, when the retailer warned EBIT would fall to between $113 million and $115 million because of the bushfires.

"I'd describe this result as credible, specially given it was a challenging half," Mr Heraghty said.

Net profit fell 20 per cent to $57.4 million after the retailer outlaid another $12.6 million to repay staff underpaid over the past eight years.

SRG first revealed in 2018 that it had underpaid about 4500 staff who were employed in setting up and refurbishing stores. More underpayments were discovered last February, taking the bill to $53 million and forcing former CEO Peter Birtles to take early retirement.

Additional underpayments were identified this year, taking total repayments to more than $61 million.

Sales rose 2.9 per cent to $1.44 billion, with same-store sales up 1.7 per cent and online sales up 22 per cent. But margins fell from 8.9 per cent to 8.0 per cent, due to higher store wage costs under a new enterprise agreement, new stores and heavy investment in online retailing.

SRG is aiming to deliver a seamless experience when customers shop online or in-store and strengthen loyalty by rewarding customers who shop more often.

Despite the fall in earnings, SRG maintained its interim dividend at 21.5¢ a share, payable April 12.

SRG shares rose 3 per cent to $9.40. The stock has fallen 10 per cent since the profit warning last month but is 20 per cent higher than its level a year ago.

"A case of no new surprises is probably good news in the market we're in," said Credit Suisse analyst Grant Saligari.

"I think [SRG] is implementing some quite good digital strategies and has got some well-positioned businesses that are achieving good top-line growth – what we saw in this result was a step up in costs partly associated with that sales growth," he said.

"We'd look for the company to be able to leverage that and generate better profit growth in fiscal 2021 and 2022."

Following an industrious year of brand partnerships, P.E Nation has landed the ultimate deal.

It has been announced as the latest global designer collaboration at H&M, the first Australian brand to join the start-studded alumni. 

Previous collaborations have included Alexander Wang, Lanvin, Balmain, Marni, Versace and Jimmy Choo. 

The P.E Nation x H&M collection will feature apparel, swimwear, undergarments and accessories, designed in collaboration with the H&M in-house team.

It will be available in stores worldwide as well as on hm.com from March 5.   

Staple items include leggings, bicycle shorts, skirts, t-shirts, swimwear, sports socks and bum bags. 

In line with the brand’s growing sustainability push, the range also features organic cotton and recycled polyester. 

Large logos and tie-dye are set against contrast elastic waistbands, straps, colour-blocking and zip details. Colours range from black, white, grey marl, sand, mint green, neon pink and pops of bright orange. 

In a joint statement, co-founders Pip Edwards and Claire Tregoning said the range is aimed at modern women.

“With the H&M collaboration, we want women all over the world to live a more confident, vibrant, fashionable life whilst juggling her fast-paced urban existence.

“The collection can be worn all day, every day, whilst being flexible, functional and style-led. All the pieces work so well together – it’s very easy to mix and match.”  

H&M head of design Maria Östblom praised the brand.

 “It’s been a lot of fun collaborating with P.E Nation – the teamwork and energy between them and our designers was great!

“Pip and Claire know first-hand about the need for activewear in all aspects of daily life as female entrepreneurs and cofounders of such a dynamic lifestyle brand. They are fantastic role models and super inspiring themselves. 

“For the collaboration, pieces such as colour-blocked leggings, tie-dye t-shirts and the pleated skirt really emphasise the super stylish and striking performance wear distinctive to P.E Nation. We’re all pleased that there are more sustainable materials included in the collection, too.”

Accent Group has delivered another record result - this time for the first half of the fiscal year. 

The footwear group has reported net profit after tax of $35.3 million, a 9.7% increase on the previous year.

The business' EBITDA grew by 10.5% to $67.7 million while group sales in company owned stores increased 14.1% to $444.2 million. 

Like-for-like retail sales for the first seven weeks of the second half are already up 3%.

Accent Group CEO Daniel Agostinelli said it would continue to avoid industry-wide discounting.

“The management team remain focused on continued innovation, execution of the growth plan, and trading the business to respond to market conditions."

"Sustainable underlying margin improvement remains a key focus, including avoiding lazy, discount-driven retailing, increasing vertical brand and product mix and driving operating efficiencies.

"Accent Group continues to be defined by strong cash conversion, and the consistent strong returns it delivers on shareholders’ funds."

Profit in the second half is expected to be achieved through revenue growth, driven by low single digit LFL growth and at least 70 new stores.

Accent attributed its first half results to strong eCommerce and store sales, profit growth in The Athletes Foot, underlying gross margin improvement and a focus on cost of doing business.

Agostinelli said although the headline gross margin was below the prior year, it had fared well given conditions.

This included foreign exchange headwinds and more significantly, the highly competitive market environment driven by the Cyber events in November.

The gross margin impact to EBIT margin was largely offset by improvements in cost of doing business.

Accent Group CEO Daniel Agostinelli said that the business is pleased with the results given the challenging conditions.

"We are pleased to have delivered strong sales and earnings growth in a challenging environment.

"The strength of the Group’s digitally integrated business model, along with the ongoing focus and investment on innovation in digital and store formats, continues to drive growth.

"I would also like to acknowledge the hardship and community impact caused by the bushfires over the last several months and to thank our team and our customers in affected communities for their efforts and resilience through this difficult time," he said. 

In the half Accent Group opened 51 new stores across Australia and New Zealand, with 26 of these opened in November and December. 

The business also closed eight stores upon lease expiry because an agreement with landlords for forward sustainable rents could not be reached. 

In 2020 Accent expects to open more than 70 new stores. 

In terms of strong performers in the retail portfolio, Accent reports that Skechers, Vans, Dr Martens, Platypus, Cat and Subtype were standouts. 

The Hype brand remains a continued focus for the Group, with Accent undertaking significant refurbishing work and improving product and brand differentiation in this business.  

Accent will continue to invest in The Athlete's Foot brand, with a further 17 stores added during the half to bring the store network to 66 stores. 

The Athlete's Foot sales and margin were ahead of last year on like for like and total stores basis, with particularly strong sales coming in January for back to school. 

Accent Group chairman David Gordon said that the growth in stores helped to deliver strong results. 

"The Group continues to invest in future growth including stores, digital and new incubation businesses in footwear and the high growth athleisure segment through the Stylerunner acquisition.

"The continued strong profit growth, cash position and confidence in the growth strategy have enabled the Board to declare a fully franked interim dividend of 5.25 cents per share," he said. 

Digitally, Accent's sales grew 33% during the half, on top of the 94% growth achieved in H1 FY19. 

This growth is underpinned by Accent's investment in the digital customer experience with a focus on customer communications. 

This investment results in a dual benefit for Accent by giving the customers direct, personalised communications while also reducing the reliance and cost on paid search channels.

In its wholesale business, Accent reports sales up 6.7% to $62.2 million, with strong performances from Skechers, Vans, Merrell and Timberland.

Recently acquired businesses also performed well, with The Trybe, Cremm and Sylerunner all reported to be on track. 

In a statement Accent said that these businesses are all performing well, despite being newly launched in H1.

"As they were all in start-up phase in H1, the EBIT impact of these businesses for the half was a planned combined loss of c$1m.

"The Trybe continues to show positive results with trade through the key Christmas and back to school trading periods in line with plan.

"Cremm soft launched just prior to Christmas and the key focus here for the next quarter is onboarding new brand partners and widening the product portfolio.

"The Subtype business, which we have now owned for 12 months, was ahead of plan and contributed positively to EBIT.

"Planning for the launch of Pivot is well progressed and on track for our first store to open in Shellharbour (NSW) in April 2020."

Beauty retailer Mecca announced it will take over a multi-level space in the 91-year-old Gowings Building in the Sydney CBD to create the biggest beauty store in the southern hemisphere.

The Aussie cosmetic giant will create its new flagship store on the 1200sqm three-level space that Topshop currently occupies in the iconic Gowings building, which they plan to unveil in the second half of 2020.  

The new beauty destination, which Mecca is calling the largest beauty store on this side of the world, is part of its plan to invest in experience, beauty and engagement and stay at the forefront of the beauty industry.

Mecca will dedicate 30 per cent of the new store’s floor space to beauty experiences, edutainment and inspiration, with an Australian-first proposition driven by a program of deeply customisable services, brand immersion, masterclasses, pop-ups and blockbuster new brand and product launches.

“I started Mecca with the desire to make every customer look and feel their best,” said Mecca founder and co-CEO Jo Horgan.

“I’m thrilled to be creating a store that embodies our exciting vision for the future of beauty and restores Gowings to its former glory with an experience-led strategy that puts the joy back into shopping. It will be the ‘beating heart of beauty’ in the Sydney CBD,” Horgan said.

The iconic Gowings Building in the Sydney CBD is a heritage-listed site. Sydneysiders’ fondness for the building and the prominence it has both nationally and internationally were deciding factors in taking on the lease,
according to Mecca.

“Gowings is one of Australia’s busiest pedestrian corners, incorporating the elegant State Theatre, award winning QT Sydney Hotel and highly regarded dining establishments Gowings Bar and Grill and the latest Parlour Cucina,” said Jane Hastings, CEO Event Hospitality and Entertainment.

“Mecca is a perfect fit to complement a corner where hospitality, entertainment and beauty set a world class standard of their own.”

Mecca’s long-time collaborator, Sydney design studio Meacham Nockles, has been appointed as the architect on the project.

The new store will include a curation of over 200 of the world’s most coveted brands, including NARS, Morphe, Drunk Elephant, Tatcha and Diptyque, and will include dedicated skin, hair and body treatment areas and private rooms, a makeup artistry Beauty Lab, Mecca’s largest ever Perfumeria, and a multipurpose level devoted to experiences and events.

Mecca’s fragrance, skin and makeup specialists will be on hand to assist shoppers.

By the time it opens, the new Mecca at Gowings is projected to be the business’s 115th store across Australia and New Zealand.

Bunnings’s proposed acquisition of Adelaide Tools could lead to a lack of competition in the hardware market, a preliminary statement of issues released by the Australian Competition and Consumer Commission has warned.

The statement said that while Bunnings is a major player nationwide Adelaide Tools is one of only two tool specialists with a physical presence in Adelaide, and competes on price, innovation, range, and quality of service.

Therefore the proposed acquisition would likely stifle any local competition. 

“Bunnings has a very powerful position in hardware, building supplies and home improvement. Since the exit of Woolworths’ Master from the industry, Bunnings has grown rapidly and has become by far the leading player,” ACCC chairman Rod Sims said. 

“The ACCC considers that tools specialists, such as Adelaide Tools, are Bunnings’ closest and strongest competitors for the supply of trade and outdoor power equipment.”

With Bunnings already being the biggest player in the market nationwide, however, it’s unlikely the acquisition would increase its wholesale buying power.

Earlier this month the competition watchdog said it needed more time to consider the impact of the potential merger, and that the findings released on the 14th could be a statement of issues or a final decision. 

The ACCC clarified it will hand down its final decision on April 23.

Bunnings managing director Mike Schneider said the business has been providing the ACCC with timely and comprehensive responses to inquiries, and is disappointed with the delay.

“We strongly believe that this acquisition does not substantially lessen competition as there is limited competitive overlap between Adelaide Tools’ specialist power tool and heavy duty machinery offering and the Bunnings’ Warehouse customer proposition,” Schneider said.

“It is also our strong belief that this merger will enhance value for customers and create stronger competition in the South Australian market.”

As Australian retailers start to feel the sting of coronavirus fears, an unlikley fashion hero has emerged.

Dolce & Gabanna.

The designer brand, founded by Domenico Dolce and Stefano Gabbana, is funding a study into therapeutic interventions for the virus.

The research will be coordinated by Professor Alberto Mantovani, scientific director of Humanitas University.

Dolce and Gabbana confirmed they had collaborated with Humanitas University in the past, with scholarships offered to medicine students.

“We felt we had to do something to fight this devastating virus, which started from China but is threatening all mankind," they said in a joint statement.

"In these cases, it is important to make the right choice.

"This is why we thought Humanitas University would be the ideal partner, whose excellence and humanity make it a special entity, with which we have already cooperated on a scholarship project.

“In the face of these tragedies of such a vast scale, each action may seem insignificant.

"But Prof. Mantovani told us the African fable about a hummingbird: while all the other animals were fleeing from a fire in the forest, it flew in the opposite direction, continuing to bring water in the attempt to put out the fire.

"We understood that in any case it was worth doing something.

"Even a very small gesture can have enormous significance. Supporting scientific research is a moral duty for us, we hope our contribution will help to solve this dramatic problem."

The novel coronavirus has infected more than 71,000 people around the world, mostly in mainland China. The death toll is 1,775.