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Winning Appliances has opened a new showroom in Melbourne where customers can immerse themselves in fully-designed lifestyle kitchens, watch professional cooks prepare food in a ‘culinary theatre’, grab a coffee and – oh yeah – shop for fridges, washing machines and other appliances from leading brands.

The showroom, located on Swan Street in Richmond, aims to provide a unique, multi-sensory shopping experience. 

“It’s been designed to allow customers to imagine what the appliances will look like in their dream kitchen, in different styles, rather than just the products themselves,” John Winning, the CEO of Winning Group, said in a statement about the showroom. 

The Richmond store is the 16th showroom and 5th flagship for the 113-year-old family business and follows Winning’s acquisition of Brighton-based Michael’s Appliance Centre last year. 

It’s the first store in Winning’s network to stock luxury overseas brands The Galley, Kalamazoo and Fhiaba, alongside leading appliance brands, including Gaggenau, Miele, V-Zug,

Designed by Melbourne-based studio Cera Stribley Architects, the showroom is meant to evoke a luxury home environment, with steel-frame windows, brick walls and timber floorboards. 

As a company spokesperson pointed out, light-coloured flooring would not typically be the first choice for a store that is expected to get high levels of foot traffic. 

Speaking at a launch event on Wednesday evening, Winning said the company does not build “cookie-cutter” stores and it doesn’t offer “cookie-cutter” customer service. 

“We pride ourselves on the old-fashioned customer service we’ve been offering for many generations. I’m the fourth generation [to work in the business],” he said. 

Winning was joined on stage for the ribbon cutting ceremony by his parents and uncle, who is an ambassador of the Winning brand.

Discount department store Kmart will offer personalised shirts, socks, and stockings during the upcoming holiday period through a partnership with Wesfarmers-backed Onthego.

Onthego, which is partially owned by Kmart-owner Wesfarmers, launched a funding round alongside the announcement to continue expanding its customer acquisition efforts and advance its technology. 

“Customers are moving more and more to online to self-serve their personalisation ideas, from socks to Christmas stockings and tee-shirts with your name on it,” Onthego founder and chief executive Mick Spencer said in a statement. 

“In a time where customers have a lot of choice, retailers must be nimble and innovative in their customer offering, ensuring customers come back to their website or stores. 

“Customisation has proven [to be a] market that builds more brand loyalty.”

The customisation business already provides personalised clothing options through Officeworks, and previously told Inside Retail that the business saw a “massive opportunity” to expand across Wesfarmers’ other businesses. 

“If I fast forward five years there’s obviously going to be a huge amount of potential there, and the great thing is Wesfarmers are really keen on this young, ambitious company that they’ve got access to,” Spencer told IR.

Spencer also said the business plans to expand internationally, with a short term focus on South-East Asia and New Zealand, and a longer view to enter the UK, Europe or North American markets. 

Walmart US announced John Furner as its new president and CEO, in the wake of Greg Foran’s decision to take up the chief executive role at Air NZ.

Furner will report directly to Walmart’s global president and CEO Doug McMillon when he takes up the position on November 1. Foran will stay with the retail giant until January 31 to help with the transition.

Furner began his career with Walmart in 1993 and went on to lead operations, merchandising and sourcing for Sam’s Club and Walmart International (China) as chief merchandising and marketing officer. 

“John has done a fantastic job at Sam’s Club, and he will continue the momentum we have in Walmart US,” McMillon said. 

“John knows our business well, having held many different jobs in the company over more than 25 years, and he is helping transform it for the future. He has the experience and judgment to know what we should continue doing and what we should change. He embraces technology and new ways of working, and he keeps our customers and Sam’s Club members at the center of everything we do, while delivering results for the business. I look forward to seeing his impact for our customers and associates in Walmart US.” 

Furner said he is grateful for the opportunity and ready to get started. 

“There’s no better place than Walmart U.S. to touch the lives of millions of customers and associates. Together with the team, we will build on the progress under Greg’s leadership and continue to make Walmart an even better place to work and shop,” he said in a statement. 

Foran said it has been an honour to lead the team at Walmart US. 

“I’m proud of what we’ve been able to achieve at a unique moment for retail and want to thank the associates who made it happen. It is bittersweet to leave Walmart, but this incredible opportunity to lead an iconic Kiwi brand was one I could not pass up, and I’m looking forward to this next chapter.” 

Walmart said that it will announce Furner’s replacement at Sam’s Club at a later date.

Investors take a dim view of insider sales, and so most biting that bullet tend to do so in one big hit.

Not so Accent Group co-founder Michael Hapgood, who's filed no fewer than five seperate notices over the past month advising the market of his sales.

He first offloaded 1.2 million shares between September 5 and 9. And another 672,693 over the next four days. He sold 83,283 shares on October 16, 322,310 between September 26 to October 1, and another 530,455 between October 2 and 4.

All up, that's 2.3 million shares divested, for a total monetary gain of $4.4 million. No reason was given to the bourse for the sales, though Hapgood does still own 11.7million shares. Not that we'd put our money on him being done. He last sold shares in May, in a similar stop-start pattern ...

Accent Group, of Athlete's Foot fame, is trading near the all-time highs it achieved in 2016, having announced a record profit in August. It's largest shareholder is retail entrepreneur and board director Brett Blundy, who's been holding on to his 18 per cent stake.

Clothing prices are set to rise as the trade war between the US and China pushes up retailers' sourcing costs, compounding the effect of the weaker Australian dollar.

Many Australian retailers are hoping the trade war will lead to spare capacity in China and therefore better deals from Chinese suppliers as major US companies such as Macy's, GAP and PVH Corp shift away from China to cheaper countries such as Vietnam, Bangladesh and Cambodia.

But Australian Fashion Council co-chairman John Condilis says sourcing costs are likely to rise as Chinese manufacturers close factories and increase prices in an attempt to protect their bottom line.

Mr Condilis, the co-founder of Melbourne based clothing label Nobody Denim, says Australian retailers do not have sufficient volumes to replace the loss of sales from major US chains.

"Chinese suppliers are reaching out to Australia but because of the loss of volumes from the US retailers their prices are likely to rise," Mr Condilis told The Australian Financial Review.

"It's early days but that's my long term vision of where it's going especially if the Australian dollar continues to fall.

"A lot of the factories in China are quite reliant on [large volumes] - 100,000 units per style per order - not many organisations locally can sustain that to support [Chinese manufacturers'] cost structure."

Nobody Denim is one of very few Australian clothing brands still manufacturing in Australia - most shifted sourcing to China and other parts of Asia as tariff protections were removed between 1990 and 2015.

The Australia free-trade agreement removed all tariffs on most clothing made in China, which now accounts for more than 70 per cent of clothing imports.

Falling currencies and excess capacity

Mr Condilis' company was originally a service provider for the Australian denim industry, providing stonewashing and laundry services, but when tariffs were cut in 2000 his customers started buying overseas.

Mr Condilis and his brother launched their own label in 1999, outsourcing to local manufacturers before starting to manufacture in Melbourne in 2010.

"I did a cost analysis exercise and the variation (between local and China manufacturing) was minimal, less than 10 per cent ... we decided to keep it here for stability, security and to protect our IP [intellectual property]," he said.

Australian retailers who shifted sourcing to India, Vietnam and Bangladesh in recent years as China became too expensive are now trying to assess the likely impact of the trade war and whether it's worth moving sourcing back to China.

A complicating factor is the weaker Australian dollar, which has fallen 12 per cent in two years and 4 per cent this year.

UBS analyst Ben Gilbert said retailers such as Wesfarmers, which owns Kmart and Target, Adairs, and Myer, which have large private label penetration, face higher input costs and margin pressure unless they raise prices.

"However, this may be offset by excess capacity at Chinese plants (due to the trade wars) and the lower renminbi," Mr Gilbert said.

Mark McInnes, chief executive retail of Premier Investments, which owns Smiggle, Peter Alexander, Just Jeans, Portmans and Dotti, said the trade war could be beneficial for the company.

It's a moving feast - Trump seems to change his mind every day about what he wants to do.

— Xavier Simonet, Kathmandu chief executive

"China has devalued their renminbi, that devaluation is an opportunity for us, and the fact that US companies are ordering less from China is an opportunity for us," Mr McInnes said.

"We see good opportunities in China as a result of the trade war with the US."

However, Kathmandu chief executive Xavier Simonet, who sources products from  China, Vietnam and Indonesia, said the impact of the trade war was unclear at this stage.

"It's a difficult one because it's a moving feast - [President] Trump seems to change his mind every day about what he wants to do - it's all yet to play out in terms of what impact it may or may not have," Mr Simonet said.

Best & Less chief financial officer Andrew Moore said the trade war might open up capacity for Australian retailers, but as the Australian dollar fell and retailers' hedging cover ran out, prices would have to rise.

Retailers being squeezed at the margins

"The impact of the $A means there aren't price reductions coming through and over time as hedging books run out they'll have to adjust it upwards,"' Mr Moore said.

"If there's more capacity that's better for us, but that's not started to happen yet.

"Where does the China/US trade war end is the big question - I don't believe either country can afford to let it go for too much longer."

Clothing chains aren't the only retailers facing a margin squeeze from the weaker currency and the trade war. Home improvement, hardware, electronics and sporting goods retailers are also weighing the pros and cons.

European investor Rocket Internet, which helped build The Iconic in online fashion retailing and HelloFresh in home meal deliveries, has turned its sights on  Australia's $5 billion vitamin industry.

Rocket Internet has injected extra funds into Australian start-up Vitable after robust early success in a new model of selling personalised packs of vitamin pills direct to busy consumers.

Vitable co-founder Larah Loutati said the company, which began operations in March, had ''cut out the middle man'' with its e-commerce model and was also tapping into the increasing focus on health and well-being.

Vitable uses an algorithm built by nutritional experts to tailor personalised sachets of vitamins and supplements for customers. They are delivered direct to households by Australia Post, in a market dominated by big brands like Blackmores and Swisse.

She said Vitable was pitched at the premium end of the market, and by stripping out the retail margins was able to keep costs down.

"In terms of price we're on par or under where Blackmores and Swisse would generally be,'' she said.

The company's vitamins are made under contract by fully accredited manufacturers in Australia, and the orders are packed at a pharmacy in New South Wales.

Ms Loutati founded the business with Ilyas Anane. Mr Anane said across the $5 billion vitamin market, about 75 per cent of consumers bought their products ''off the shelf'' from retailers like Chemist Warehouse without having tailored advice for their own particular needs.

Rocket Internet provided some seed funding originally, and then injected further funds into the business as it gained momentum. Sales had been tripling each month, albeit off a low base.

Rocket moves fast

Ms Loutati declined to specify the size of the stake which Rocket Internet had obtained.

But having Rocket Internet's funds and expertise was invaluable because they weren't afraid of expanding businesses quickly.

"It's definitely the speed at which they operate. We really like the way they move fast,'' she said.

Rocket Internet was a strong backer of The Iconic, which has grown to become one of the best known online fashion retailers in Australia. The Iconic is now part of the Global Fashion Group, which listed on the Frankfurt Stock Exchange in June in a $1.8 billion float.

Global Fashion Group also owns online retailers Zalora, Dafiti and Lamoda.

The Iconic’s revenues climbed by 38 per cent to $371 million in the year ended December, and revenues have risen fivefold since 2014.

Rocket earlier this year sold out of global home meal kits group HelloFresh, which in Australia is in a fierce battle with rival Marley Spoon. Supermarket giant Woolworths in June took a stake in Marley Spoon.

HelloFresh stint

Ms Loutati worked at HelloFresh in Australia, and for three years from the end of 2015 was the Head of Product Development and Consumer Experience for that firm.

She said the main customer base for Vitable was largely between the 25 to 45 age group. When the business was in the planning phase, the co-founders thought it would be the tech-savvy Millennials who might form the core customer base.

"Actually the customer segment is a little older than we thought,'' she said.

The Vitable expansion comes as big global players increasingly look to personalised nutrition as a growth industry. The health science arm of global food giant Nestle in late August acquired vitamin subscription service Persona in the United States.

Vitable wants to build its brand locally to give it extra clout in the eyes of Asian consumers before expanding into Asia.

"Expanding to Asia Pacific is definitely in our planning,'' she said.

Baby Bunting reported a solid start to FY20 and reaffirmed its full-year earnings and profit guidance at its annual general meeting on Tuesday, where the business laid out its plan to grow market share by investing in digital, increasing sales from its existing stores, entering new markets and improving profit margin.

“We have had a solid start to the year and the business continues to be on track to deliver our FY20 guidance,” Matt Spencer, Baby Bunting’s CEO, said in a statement. 

The retailer is anticipating pro-forma net profit after tax to be in the range of $20-22 million and pro-forma earnings before interest, tax, depreciation and amortisation (as measured under the old lease accounting standards) to be in the range of $34-37 million, a 25-36 per cent increase year on year. 

Comparable store sales are up 3.1 per cent in FY20 so far, reflecting the cycling of unusual trading conditions in the first quarter of FY19 due to the closure of Babies R Us and clearance activity in September 2018. 

Sales growth has been affected by technical issues associated with the transition to a new web platform in July, which led to a drop in conversion. 

The retailer said traffic to the site continues to grow and the average item value has increased, and it has made further investments in its digital team to improve the customer experience on the new platform, and the retailer is still expecting comparable sales growth to be in the mid-single digits for the year 

“[W]e expect to see online sales growth momentum continue to build,” Spencer said.

Baby Bunting’s year-to-date gross profit margin is 36.6 per cent, up 270 basis points on the prior period and in line with guidance. 

Spencer attributed the better-than-expected result to the company’s investment in private label and exclusive products and fewer clearance activities, and said the same level of performance is expected to continue throughout the year. 

Private label and exclusive products accounted for roughly a third of sales so far this year, and the business is in the process of expanding its own-brand portfolio. In addition to its 4baby products, the retailer soon will offer a new range of soft goods under the Bilbi brand and will continue to launch new brands going forward.

The retailer also has identified opportunities to improve margin in its supply chain. These include reducing the amount of direct-to-store deliveries and instead routing products through its own supply chain. 

It’s exploring the possibility of relocating to a larger distribution centre and support office when the lease on its current premises in south-eastern Melbourne is up for renewal in April 2021 and establishing more store-based online fulfilment hubs to provide same-day delivery in metro areas. 

The retailer expects to open five to six new stores in FY20. The first of these opened at Westfield Doncaster last week, marking the 40-year-old retailer’s second store in a shopping centre, after entering Chadstone in 2018. 

Spencer at the AGM said shopping centres provide an opportunity to sell more convenience and consumable items and grow the sales in soft goods, such as apparel and bedding, while providing the same services as large-format stores, such as car seat fitting bays, dedicated parcel pick-up areas, layby facilities and parenting amenities.

“I believe the strength of our offer in shopping centres allows us to compete with a broader range of retailers and also exposes our value offer to more consumers,” he said.

Baby Bunting will open a third shopping centre store at Westfield Knox in the second half. This is in addition to two new stores opening in NSW – at Weatherill Park and Casula – this calendar year. 

The new stores will all feature the new look and feel that Baby Bunting unveiled at is Doncaster store, the first major brand change since the business was established 40 years ago by Gail and Arnold Nadelman.

Over a year after divesting the Millers, Crossroads, Katies, Autograph and Rivers businesses to Noni B, and putting more focus on its flagship plus-size brand, City Chic Collective has announced it will acquire US specialty retailer Avenue’s e-commerce assets. 

The US Bankruptcy Court approved the brand’s proposed US$16.5 million acquisition of Avenue’s assets after the brand entered chapter 11 bankruptcy in August.

According to City Chic, the acquisition will provide the business with a broader reach within the US plus size market, and expects it will deliver accretive growth for the business’ international operations. 

“Avenue’s e-commerce assets represent a unique opportunity to accelerate our US customer growth and expand across plus size segments,” City Chic chief executive Phil Ryan said. 

“This acquisition delivers on our vision of ‘leading a world of curves’. It means that City Chic now has a portfolio, or a collective, of online business that we can leverage to further build our Northern Hemisphere presence.

“Our City Chic, Avenue and Hips & Curves brands will allow us to speak to more plus size women and deliver on-trend, well-fitting garments across multiple price points.”

Online sales across Australia and the US made up 44 per cent of total sales for City Chic in FY 19.

In April, City Chic also acquired US online plus-size intimates brand Hips & Curves for US$2 million. 

The shift away from multi-brand retailing toward a more focused approach has made a significant impact on City Chic’s performance – with stock price rising from approximately 80 cents in June of 2018, when the Specialty Fashion divestments were made, to $2.80 per share last week. 

The retailer posted strong sales over its first year as a standalone business, with revenue improving 12.6 per cent to $148.4 million, while comparable sales grew 12.2 per cent. 

The co-founder of this Australian fashion label is inspired by the slow and thoughtful design of Europe's artisan tradition.

When it comes to gathering design inspiration for her luxe-bohemian collections, Natalie Knoll, co-founder of Australian resort wear label Bird & Knoll, looks primarily to her European summer vacations.

“I love that there’s still such a healthy regard for the artisan in Europe,” says the South African-born Australian, who launched the label in 2014, alongside New Zealander Macayla Chapman, with a series of cashmere-blend scarves printed with photographs from Knoll’s travels to Morocco, Greece, Israel and beyond.

“In Europe, you can still find these little gems where talented people are crafting their wares. That attention to slow and thoughtful design and detail has definitely impacted our creative process.”

Bird & Knoll’s collections of effortlessly elegant scarves, dresses, tunics and jumpsuits in silk, linen and cotton have attracted a slew of celebrity fans, including actors Emily Blunt and Elizabeth Banks and, perhaps most notably, India Hicks.

The former model and cousin and goddaughter of Prince Charles is also a passionate traveller, and stocks Bird & Knoll at her upscale Bahamas boutique The Sugar Mill, whose laid-back island style has been a big inspiration for Knoll’s own resort collections.

Bird & Knoll’s Venice scarf, $298, is inspired by the lamp posts of Piazza San Marco. 

“I love to travel anywhere that offers excitement and full-on adventure,” says Hicks. “I have five wildly spirited kids who are always ready for something a bit mad. We’ve bungee jumped off the Victoria Falls Bridge in Zimbabwe, zip lined in Costa Rica and kitesurfed in the Carolinas.”

Hicks says she was drawn to Bird & Knoll’s uniqueness and authenticity, and has their white cotton Freida shirt dress on high rotation. “It’s very flattering, it’s just the right weight, and it doesn’t make me look like I’m wearing my dressing gown.”

Knoll’s passion for European travel was cemented when she lived in London for six years a decade ago, and she cites Italy as a favourite destination. “This year my husband and I travelled to Puglia and Sicily with our two teenage daughters, with a stop in Rome on the way," she says. "We absolutely fell in love with the gorgeous Puglian towns of Lecce, Ostuni, Otranto and Polignano a Mare – so rustic and typically Italian.”

Otranto in Puglia boasts spectacular Mediterranean beaches.   iStock

Rome, however, continues to hold a special place in Knoll’s heart. “There’s a certain charming grittiness to it that gets me every time.”

Each Roman adventure involves a pilgrimage to Taverna Trilussa in the Trastevere – “a must for their amazing pastas, served in the pan they’re cooked in” – and the designer gets her “upmarket fix” at La Rinascente, which she describes as “the most beautiful department store in Rome”.

David Jones is selling off its menswear store in Melbourne’s Bourke Street Mall and revamping its sister site across the road.

The retailer’s owner, South African Woolworths Holdings, announced it would put 299 Bourke Street up for sale in the coming months.

Refurbishment of the womenswear store at 310 Bourke Street will start and be completed in 2021.

“A single-store flagship housing the best local and international brands in one world-class destination will create a more seamless and cohesive experience for our customers,” WHL Group CEO Ian Moir said in a statement on Wednesday.

Funds from the sale will be applied in part to the refurbishment project, with the remainder applied to other areas of the business.

It follows a similar move in Sydney ‘s Elizabeth Street flagship store.

In August WHL announced a $437.4 million write down in value of the David Jones business.

The Reserve Bank on Tuesday cut the official interest rates to a new record low of 0.75 per cent in a bid to drive up wage growth and reduce unemployment.

The new record low of 0.75 per cent is the third cut this year, and the first time rates have dipped below 1 per cent, but AMP chief economist Shane Oliver said the Reserve Bank’s work isn’t done yet.

“They want to get the economy humming faster, I don’t think this will be enough – it will help (though),” he told Sky News.

He predicted rates will drop again to 0.5 per cent on Melbourne Cup Day, and down to 0.25 per cent early in 2020.

Executive director of the Australian Retailers’ Association Russell Zimmerman said he was hopeful the decision to further cut interest rates would boost retail sales by easing pressure on household budgets.

“We haven’t seen the jump in retail sales we were hoping for, and we are still waiting to see the flow-on effects of earlier rate cuts, tax cuts, and increases to the minimum wage,” Zimmerman said.

“Retail trade figures in recent months have continued to lag but we keenly await the release of August retail trade figures to see whether the other stimulatory measures have kicked in,” he added.

Divide over how to boost economy

Treasurer Josh Frydenberg said the RBA cut rates to bring Australia into line with other low-rate economies, as well as to pursue its goals of cutting unemployment and lifting wage growth.

“The board has made clear in its statement today the domestic economy has reached a gentle turning point and they positively referred to the benefits that are flowing from the tax cuts, which are the most substantial in more than two decades,” he told reporters in Sydney.

But Labor shadow treasurer Jim Chalmers said the government was pretending it had no options to lift the flagging economy.

“If they were so good at managing the economy the Reserve Bank wouldn’t have had to cut rates again today,” he told reporters in Brisbane.

Deloitte Access Economics partner Chris Richardson says there are downsides to cutting rates so low.

“There is a risk that we’re spending down our recession insurance,” Richardson told Sky News before the cut was announced.

Frydenberg said the best way to avoid recession in a future global downturn was to pay down debt, giving the government more capacity to spend through it.

Banks urged to pass on rate cut in full

The Australian Chamber of Commerce and Industry urged the banks to pass on the rate cut in full to lift spending on retail.

“Small businesses have been doing it tough over the past year. This has particularly affected discretionary spending in small retail businesses, including cafes and restaurants,” chief executive James Pearson said.

The Commonwealth Bank was the first of the big four banks to trim its interest rates in response to the RBA’s move.

However, while CBA cut its standard variable rate for home loan customers by between 0.13 and 0.25 per cent it did not match the RBA’s cut completely.

The other big banks are expected to follow CBA’s lead in the coming days.

It only takes a quick scroll and some clicks to buy online and for Australians the dollars are adding up with more than $16 billion spent on shopping via social media each year. 

Research from ING released on Wednesday revealed over a third of Australians (34 per cent) admit shopping through social media has led to unplanned purchases.

On average Australians are spending an extra $860 annually, with 20 per cent revealing they consider buying something on social media every time they scroll through their feed.

ING’s head of retail Melanie Evans said close to a quarter of respondents admitted to not keeping track of their online spending. 

“Online shopping is undoubtedly very convenient and the recent emergence of shopping via social media has made it easier than ever to get what we want, but it’s also easy to unintentionally overspend,” Evans said. 

Targeted advertising also adds to the temptation, with 36 per cent finding that social media buying opportunities are very targeted to their interests.

“It’s a good idea to be aware of the highly targeted advertising often employed by social media platforms, which can increase temptation to buy things we otherwise wouldn’t have considered,” she said. 

“If you are focused on saving, try and avoid those impulse purchases and the buyer’s remorse that can come with them. Spontaneous dips into our hard-earned savings all add up.”

The most popular platform to shop on was Facebook with 22 per cent, followed by Instagram nine per cent, YouTube nine per cent, Snapchat four per cent and Pinterest four per cent.

Australian womenswear brand Forever New has launched a standalone e-commerce site in the US, catering to increased demand from local customers with around 50 new products dropping online every week.

The website marks an expansion of the brand's presence in the US, where it currently sells through Nordstrom.com, as well as through concessions in Bloomingdales and Neiman Marcus.

“We are excited to be expanding in North America and a branded US website was the next step on our journey,” Carolyn Mackenzie, Forever New’s managing director, said in a statement.

“We have had a lot of demand for our product in the US so we are happy to give our US customers one more way to shop with us.”

Launching on Thursday, the US website features a range of styles currently available in North America, with about 50 new items being added to the site each month. It is branded under Forever New’s North American trading name, Ever New.

This is just the latest step in the Forever New’s global digital expansion, which sees the brand selling on Asos and Next in the UK, Zalora in Singapore and Zalando in Europe, and through its own recently relaunched global e-commerce site.

At the same time, Forever New continues to expand its global bricks-and-mortar presence. The fashion brand has more than 200 stores in Canada, Singapore, China, India, South Africa and New Zealand, and concessions in the US, Singapore and the Middle East. and plans to open a new store in November in Vancouver, Canada.

According to a story in the AFR in June, revenue from overseas operations accounted for 40 per cent of Forever New’s sales of around $300 million in 2018.

Mackenzie previously told Inside Retail that standalone stores in the US are not out of the question.

“[B]eing an agile and fast-moving business means there is always the possibility…” she said.

Broader transformation underway

The ramp-up overseas is just part of the multi-faceted transformation currently underway at Forever New.

Already this year, the retailer has unveiled two first-to-market digital initiatives – a reserve-in-store option and visually-similar product recommendation tool – and launched a “connected change room” pilot in its store in Highpoint Shopping Centre.

The retailer has also rolled out a plus-size range called Forever New Curve and a new high-end store concept designed by Hecker Guthrie, featuring terrazzo tiled floors, brushed brass detailing and fluted glass panels.

Luggage retailer Rimowa has opened its first pop-up in Australia, at Melbourne’s Chadstone shopping centre.

The 147sqm pop-up features the brand’s updated luggage collections, which include the original collection, the classic collection, the essential collection and the hybrid collection.

According to the luggage brand, its updated product line caters to contemporary travel’s most essential sizes and includes four collections with four cabin sizes, two check-in sizes, and three trunk sizes with updated features.

The new store will also showcase Rimowa’s new seasonal colour palette of sage, coral and slate for its essential collection.

Rimowa said the coral tone is inspired by Pink Lake in Western Australia; slate takes its hues from the chalky, gradient grey hues of Indonesian mines; sage reflects the green shades of the Lake District in northeast England.

Over its 182-year history, US luxury jeweller Tiffany & Co has become known for a series of icons connected to its storied name: its eponymous blue colour, for one, the film Breakfast at Tiffany’s and its signature engagement ring setting. But one thing the brand hasn’t been known for – until now – is catering to men.

Debuting on October 1 worldwide, Tiffany’s first comprehensive men’s collection will encompass everything from the watches, tie bars and cufflinks you might expect, to a made-to-order trophy ring inspired by the many sporting trophies the jeweller has made over the years.

There are also designs that build on artistic director Reed Krakoff’s Everyday Objects collection, such as a sterling silver shoe horn, ice tongs, a Swiss Army-style knife and a paper weight. The pièce de résistance here is a handcrafted solid sterling silver and 24-carat vermeil chess set (price available on request).

Over time, the company will add to Tiffany Men’s – the collection includes almost 100 items, ranging in price from about $295 to $22,000.

While it’s not the first time men’s jewellery has been available at Tiffany, it represents the first significant push for the brand into this area. It is one of a series of bold new moves from the veteran retailer, which this year opened the Blue Box Cafe in New York (and a facsimile pop-up in Los Angeles); a new flagship in Sydney and an exhibition in Shanghai, titled Vision & Virtuosity.

The company – like many luxury brands – is betting big on China and South Asia generally, with upgrades to 35 Chinese stores, and a major renovation to its Shanghai boutique, which will reopen in December to become the brand’s second-largest store after the New York flagship.

Tiffany & Co. is also opening its first stores in India, with a Delhi flagship launching later this year and Mumbai to follow in 2020. The drive for men’s jewellery is also seen as a way for the house to capitalise on this market.

New Zealand’s outdoor retailer Kathmandu has bought a piece of Australian surf legacy with the acquisition of iconic brand Rip Curl for $350 million.

The label was famously founded in 1969 on the Great Ocean Road at Torquay in Victoria where it had been privately owned until the announcement on Tuesday morning.

The brand was established by Brian Singer and Doug Warbrick and the headquarters will remain near Bells Beach.

Kathmandu offers outdoor clothing and camping gear to cater to the travel and adventure segment with specialty stores across Australia, Britain and New Zealand.

Rip Curl has a wide-reaching global footprint with a presence across Australia, Europe, New Zealand, Brazil, South East Asia and North America, producing clothing, highly technical wet suits and general swimwear.

“This is a fantastic opportunity for Kathmandu to grow and diversify,” the company’s chief executive Xavier Simonet said in a statement released to the ASX.

“The acquisition of Rip Curl transforms Kathmandu into a $NZ1 billion ($A930 million) outdoor and action sports company, anchored by two iconic global Australasian brands.”

He said the purchase of the iconic surf brand will allow the company to expand into new markets.

“Importantly, there is also strong cultural alignment between the two brands, underpinned by a shared focus on quality, innovation and sustainability,” Mr Simonet said.

Michael Daly will continue in his role as Rip Curl’s chief executive, who said he intends for the label to grow under the Kathmandu ownership.

“We are excited about the opportunity to partner with another iconic Australasian brand that shares our vision of creating high-quality functional products for outdoor and action enthusiasts,” he said.

Mr Simonet said he was pleased the surf label’s team will stay together and retain operational ownership.

“We wish to acknowledge the role that Rip Curl’s founders have played in building the iconic status of the Rip Curl brand internationally as well as its unique cultural identity,” he said.

Vicinity Centres unveiled new details about the upcoming hotel offer at its Chadstone Sopping Centre in Melbourne, revealing a 250 room capacity, two restaurants, as well as a wellness retreat and day spa.

The 12 storey hotel, which will cost $130 million and open to guests on Friday 1 November, will be connected to Chadstone Shopping Centre and provide the centre’s domestic and international visitors a place to stay.

“Demonstrating our commitment to continually evolve Chadstone, the hotel will capitalise upon and enhance Chadstone’s proven international and domestic appeal which sees 24 million people visit us each year, including more than half a million international visitors,” Chadstone Director Fiona Mackenzie said. 

“Hotel Chadstone will offer visitors and guests luxurious and exceptional experiences.”

Melbourne’s tourism industry has seen significant growth in the last few years, attracting approximately 90 million visitors and $30 billion in the year to March 2019, according to Victorian Minister for tourism Martin Pakula. 

Chadstone Shopping Centre is located 17kms from Melbourne’s CBD, and has traditionally attracted international visitors through its doors with its luxury fashion offering, as well as a free tourist shuttle bus service that ferries visitors directly to the centre from the city.

The centre also houses a tourist lounge and facilitates group tours of the centre, which features exclusive offers for tour-goers in participation with its tenant retailers, such as monogramming specials, makeovers, product experiences and masterclasses. 

IBISWorld senior industry analyst Kim Do said these international visitors have become a significant market for many Australian retailers in the past few years.

“The trends in Australian tourism have amplified the disparity in the performance of the various segments in the retail market,” Do previously told Inside Retail.

“For example, despite weak growth for mid-market retailers, luxury retailers have performed exceptionally well in recent years, as they are able to take advantage of expenditure by tourists, which make up approximately 30 per cent of the luxury retailing industry.

“There is an opportunity for retailers to capitalise on this.”

How do they do it? Shares in Premier Investments were up another 5.8 per cent on Monday. It followed a share price jump of more than 20 per cent and a record dividend. And all from fashion and discretionary retail largely in Australia and Britain in the last 12 months, two markets plagued by the political uncertainty of an election and Brexit, never mind the retail doldrums.

The answer, in a word, is landlords. For all the retailing brilliance of Solomon Lew and his CEO Mark McInnes, it is the reshaping of leases, and reweighting of bricks and mortar against other ways to sell product, which stands out. Active management may be failing the financial investment markets, but it is the imperative for cash flow at Premier Investments, which owns Smiggle, Peter Alexander and fashion brands such as Just Jeans and Dotti.

“First, we manage our business very well,” says Lew, with careful emphasis before continuing. “The stores that are not profitable or stores that the landlords will not play ball with us in terms of what the market rental should be, we take pretty drastic action.

“This year alone we closed over 35 stores and we have closed 138 stores over the past six years. And you’ve seen our sales grow, so notwithstanding the fact that we can close stores, we grow our business year upon year.”

Both men beam as they explain how a brand like Just Jeans can grow in same-store sales under this strategy. Now together for eight years, they are immaculately turned out (as always), with ties and pocket squares carefully selected for their well-fitted suits. If anything, the soft retail market seems to have given them more leverage in their message to landlords — we want a constantly reviewed deal, or we may well close up shop.

“If you went to Chapel Street today”, says McInnes, “there is a Dotti store where we said to the landlord ‘give us a percentage of sales or we will close’. The landlord said no, and we said ‘fine’. We have closed. It is still vacant some six months on, so that landlord has lost all their income. And there are plenty of examples of that around the country.”

McInnes hastens to add they do not actually have a strategy of closing stores. This is a response to “unrealistic landlords”. He says: “What we’re seeking is the same capital and rental deal that they are offering to international companies that are coming into this country, like H&M and Zara and Uniqlo. If their centres are trading down 5 per cent, 10 per cent, or 15 per cent, we want rental discounts in line with the way those centres are trading. If landlords are offering our competitor 20 per cent, 30 per cent, 40 per cent discounts to renew leases, well we want those same deals.

“We have all the detail and all the data, we can talk to you by store or shopping centre and you need to be offering us the same types of deals that you’re offering other people. We will walk away from unprofitable stores and we have a viable, very profitable online channel that can pick up those sales at a much higher EBIT ­margin.”

Online is no idle threat and has delivered new leverage for Premier. As many other businesses struggle to grow online from a low base, Premier’s online sales were $148m in the last financial year, up almost a third. They now make up over 13 per cent of group sales.

The Premier strategy is even clearer in its newer international markets for Smiggle — both in rental negotiation and, as McInnes argues, in the new capital-lite model. “In September 2018 we announced four pathways to accelerated global growth: the launch of wholesale, a growth in concession, a growth in online and then — where the metrics made sense, and landlords took most of the risk — continued store rollout.

“We are now in 180 doors with six iconic retail partners in seven countries. All those strategies are capital-lite and are being delivered at far higher EBIT margins than our group average. That has led to a significant increase in our cash flow which enabled Sol and the board to consider a higher dividend.”

The capital-lite options have brought new negotiating power when combined with Premier’s clever positioning on leases. In 2014, the board deliberately secured opt-outs with British landlords. “We took a strategic view that we would want a break clause in our leases,” explains Lew. “So if there was a 10-year lease the majority of our leases have a five-year break clause, which allow us to renegotiate or move out of the store at very little cost.”

This year in Brexit Britain, consultant Cantor warns that discounting in retail is no longer an effective tool to encourage more shoppers. Forty per cent of all retail spend is now on discounted items, as compared with 30 per cent during the last recession. Premier has cut its cloth to suit the times, taking a $26m one-off hit to allow Smiggle to break leases. It is now agitating for new deals that match local retailers, which Lew argues are receiving massive concessions. “You name it, House of Fraser, Debenhams, Top Shop, Accessorize, Monsoon, Paper Chase, it goes on and on.

“Obviously, the UK is suffering as a result of Brexit, but there are players out there going into a type of administration called CVA, in America it is called Chapter 11. They can go into semi-administration and pay no rent or half rent, or percentage rent. All we are looking for down the line is to be able to get into those reductions in the rentals.”

Treasurer Josh Frydenberg has told shopping centre landlords to “take it easy on those retailers” as the sector goes through structural change and major tenants push to secure better rental deals.

"Clearly it is a challenging economic environment, but also this age of disruption, particularly with the online developments are really affecting retail," Mr Frydenberg said at the Australian Financial Review Property Summit in Sydney on Thursday.

However, he said the recent tax cuts from the federal government would have a positive impact on spending.

"But it is a challenging time for the retail sector and hopefully they will ride it through as they are a big employer and they're important and I think they can manage this technological disruption."

However,Susan Lloyd-Hurtwitz, the chief executive of one of the country's biggest landlords Mirvac, said she had not seen the cash come through the register yet.

"No one needs to go to a shop anymore," Ms Lloyd-Hurtwitz said at the summit.

"People are in an environment where they are insecure about employment, don't make big financial decisions and they rein in spending, so we are not seeing the tax cuts and rates cuts in their expenditure," she said.

"There is a more profound force going on and that's the shift in retail from a necessity to choice. No one ever needs to go to a shop for anything ever again if they desire."

Some economists have said Australia is in a retail recession. Australian Bureau of Statistics July trade data showed retail sales for the month were down 0.1 per cent, following a 0.4 per cent drop in June.

Big retailers such as Premier Investments, Myer and David Jones have recently taken action against mall landlords such as Scentre Group and Vicinity over unfair and "unrealistic" lease terms due to the retail slump.

Scentre Group and Vicinity said at the summit while "pledging" to take it easy on their tenants, said it was their business to "curate the retail mix" to entice shoppers.

Scentre's chief operating office, Greg Miles, said if the landlord didn't offer the right mix of tenants, "then the business won't grow".

"It's negative to call them malls, they are living centres," Mr Miles said.

"We are all very cognisant to have the best offer and we are clearly focused on having a vibrant offer for our customers."

Vicinity Centre chief executive Grant Kelley, which co-owns and manages the country's biggest shopping centre at Chadstone in Melbourne's south east, said malls need to have a twist and some "sizzle" to keep consumers coming back.

"We have a responsibility to the community as malls are the community hub of the suburbs."

Chief executive of landlord Dexus Darren Steinberg said another issue facing the sector was over-supply.

"We have obviously built too much retail space," Mr Steinberg said.

"People are doing a lot of their spending online today and undoubtedly there will be more. We need to be careful about the future development of retail space, we need to develop less space and we need to develop in the right locations."

How do they do it? Shares in Premier Investments were up another 5.8 per cent on Monday. It followed a share price jump of more than 20 per cent and a record dividend. And all from fashion and discretionary retail largely in Australia and Britain in the last 12 months, two markets plagued by the political uncertainty of an election and Brexit, never mind the retail doldrums.

The answer, in a word, is landlords. For all the retailing brilliance of Solomon Lew and his CEO Mark McInnes, it is the reshaping of leases, and reweighting of bricks and mortar against other ways to sell product, which stands out. Active management may be failing the financial investment markets, but it is the imperative for cash flow at Premier Investments, which owns Smiggle, Peter Alexander and fashion brands such as Just Jeans and Dotti.

“First, we manage our business very well,” says Lew, with careful emphasis before continuing. “The stores that are not profitable or stores that the landlords will not play ball with us in terms of what the market rental should be, we take pretty drastic action.

“This year alone we closed over 35 stores and we have closed 138 stores over the past six years. And you’ve seen our sales grow, so notwithstanding the fact that we can close stores, we grow our business year upon year.”

Both men beam as they explain how a brand like Just Jeans can grow in same-store sales under this strategy. Now together for eight years, they are immaculately turned out (as always), with ties and pocket squares carefully selected for their well-fitted suits. If anything, the soft retail market seems to have given them more leverage in their message to landlords — we want a constantly reviewed deal, or we may well close up shop.

“If you went to Chapel Street today”, says McInnes, “there is a Dotti store where we said to the landlord ‘give us a percentage of sales or we will close’. The landlord said no, and we said ‘fine’. We have closed. It is still vacant some six months on, so that landlord has lost all their income. And there are plenty of examples of that around the country.”

McInnes hastens to add they do not actually have a strategy of closing stores. This is a response to “unrealistic landlords”. He says: “What we’re seeking is the same capital and rental deal that they are offering to international companies that are coming into this country, like H&M and Zara and Uniqlo. If their centres are trading down 5 per cent, 10 per cent, or 15 per cent, we want rental discounts in line with the way those centres are trading. If landlords are offering our competitor 20 per cent, 30 per cent, 40 per cent discounts to renew leases, well we want those same deals.

“We have all the detail and all the data, we can talk to you by store or shopping centre and you need to be offering us the same types of deals that you’re offering other people. We will walk away from unprofitable stores and we have a viable, very profitable online channel that can pick up those sales at a much higher EBIT ­margin.”

Online is no idle threat and has delivered new leverage for Premier. As many other businesses struggle to grow online from a low base, Premier’s online sales were $148m in the last financial year, up almost a third. They now make up over 13 per cent of group sales.

The Premier strategy is even clearer in its newer international markets for Smiggle — both in rental negotiation and, as McInnes argues, in the new capital-lite model. “In September 2018 we announced four pathways to accelerated global growth: the launch of wholesale, a growth in concession, a growth in online and then — where the metrics made sense, and landlords took most of the risk — continued store rollout.

“We are now in 180 doors with six iconic retail partners in seven countries. All those strategies are capital-lite and are being delivered at far higher EBIT margins than our group average. That has led to a significant increase in our cash flow which enabled Sol and the board to consider a higher dividend.”

The capital-lite options have brought new negotiating power when combined with Premier’s clever positioning on leases. In 2014, the board deliberately secured opt-outs with British landlords. “We took a strategic view that we would want a break clause in our leases,” explains Lew. “So if there was a 10-year lease the majority of our leases have a five-year break clause, which allow us to renegotiate or move out of the store at very little cost.”

This year in Brexit Britain, consultant Cantor warns that discounting in retail is no longer an effective tool to encourage more shoppers. Forty per cent of all retail spend is now on discounted items, as compared with 30 per cent during the last recession. Premier has cut its cloth to suit the times, taking a $26m one-off hit to allow Smiggle to break leases. It is now agitating for new deals that match local retailers, which Lew argues are receiving massive concessions. “You name it, House of Fraser, Debenhams, Top Shop, Accessorize, Monsoon, Paper Chase, it goes on and on.

“Obviously, the UK is suffering as a result of Brexit, but there are players out there going into a type of administration called CVA, in America it is called Chapter 11. They can go into semi-administration and pay no rent or half rent, or percentage rent. All we are looking for down the line is to be able to get into those reductions in the rentals.”