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The online furniture and homeware retailer announced last week it had fallen into voluntary administration, today Kogan.com has revealed it has purchased the company.

Kogan.com has purchased the Brosa business out of administration. The company is reporting Brosa was purchased at $1.5 million, and additional logistics support for thousands of customers with undelivered orders. This purchase includes the assets of intellectual property, goodwill and stock, and excludes all leases and other liabilities. This means Brosa joins Dick Smith, Matt Blatt and Mighty Ape in the Kogan Group to expand the Kogan Group’s furniture offering. According to this morning’s media release, Brosa.com.au will eventually relaunch with expanded range and value under the new owners. The purchase was funded from Kogan’s cash reserves.

Last week, the company was placed into voluntary administration following a rough year in the wake of a pandemic sales boom that failed to maintain momentum. The administration was overseen by Richard Tucker and Michael Korda of KordaMentha. The administrators expected a strong interest in the company, and announced that around 30 investors had approached them, just days after the company was placed into voluntary administration.

“The acquisition of Brosa by Kogan will broaden the online furniture offering of the Kogan Group, providing unprecedented range and value to Brosa customers, while also expanding the range of furniture and homewares available to Kogan customers,” said Kogan.com COO and CFO David Shafer. “We are pleased to be able to offer a lifeline to Brosa customers, to be able to save the Brosa brand, and to relaunch Brosa.com.au very shortly. Following years of investment in brand-building and marketing, Brosa is a well known online furniture brand in Australia, and we are delighted to be able to bring the brand within the Kogan Group.”

KordaMentha has this morning released a statement that Kogan.com had emerged as the successful bidder. “Kogan.com is a white knight for the business and particularly customers who are awaiting delivery of orders where the stock was held by Brosa. Unfortunately, the Administrators were unable to fulfil these orders due to  challenges in the logistics network. Kogan.com is providing a great outcome for customers to get their product where possible and subject to commercial arrangements.”

Kogan.com intends to continue to operate www.brosa.com.au and offer delivery for customers who have already paid, where Brosa has the product in stock. In the announcement last week, the administrators claimed that this would likely be the case.

Mr Tucker said the priority for the Administrators now is to pay employees as soon as possible. He thanked the employees who had assisted the Administrators in extremely difficult circumstances. “The sale of Brosa is a fantastic outcome for the creditors of Brosa,” Mr Tucker said.

Riding a wave of momentum of the back of this year’s “Freedom Christmas”, retailers are now facing a nervous wait for the tide to turn.  

You don’t need to be a clairvoyant to gauge that a period of uncertainty lies ahead for households and businesses as the inflationary pressures increase in 2023.  

Retailers have done a phenomenal job fortifying ahead of the metaphorical long winter. Our forecasts for the all-important Christmas trading period had sales at a record and the new year’s transition certainly hasn’t dampened the appetite for shopping- most celebrating their new-found liberties after three challenging years living with a pandemic.   

Post-Christmas sales are projected to notch another record of $23.5 billion, up 7.9 per cent.  

But the adage of calm before the storm may ring true here – with many economists flagging a widespread economic slowdown at some point in 2023.  

Tumultuous economic conditions certainly aren’t unchartered waters for retailers. They have been in a permanent state of disruption and rolling with the punches particularly through the pandemic.  

Pleasingly, CBD retailers who were hardest hit are saying weekends are back to pre-pandemic levels and some weekdays are slowly recovering – predominantly suffering from the segue to working from home. 

The CBD retail machine has been permanently disrupted – now requiring a new strategy to attract shoppers who are not workers.  

The key is in the ideation of a 24-hour economy and shifting focus from day to night. Twilight hours are important to ensure it’s a full experience. Indulging the five senses is key. Go for lunch, shop, stop to recharge with a coffee and top it all off with a live performance or show onto dinner and possibly a club or bar afterwards. Take in the sights and sounds that only a city can provide.  

Shopping remains Australia’s favourite sport and the resilience of travel retail in particular, is a great modern-day Rocky tale. Some experts declared travel agencies, holidaymakers and the like would be down for the count. But slowly and surely, they’re getting back up.  

There are still challenges; holiday costs are at a premium and some travellers are wary of a COVID-derailed itinerary – but for the most part, the sector has slipped the jabs thrown their way with prowess.  

The playing field for hairdressers and beauty therapists has also changed. They’re running a team relay race, but the fourth runner is nowhere to be seen. The biggest hurdle for this sector is a crippling shortage of talent, exacerbated by the lack of foreign workers- labour shortages lingering from the pandemic.  

The Australian Retailers Association (ARA) has been sounding the alarm on labour shortages throughout 2022 and we must see this addressed in 2023 to allow a true economic recovery.  

The ARA has championed change in this area – successfully advocating for the extension of extended international student working hours, the introduction of the mature worker tax incentives and a national approach to minimum age workers. There isn’t necessarily one silver bullet fix for labour shortages, but rather the need for a multifaceted approach.  

We are calling on the government to diversify the workforce by removing barriers to participation, streamline immigration processes, invest in skills and connect jobseekers to employers through vocational training and pathways to secure jobs and simplify and modernise the award system, creating flexibility to benefit both employees and employers. 

The reality in our own Back to the Future, in 2023, is very different from that of which we would have anticipated even just four years ago.  

We can’t hit the Flux Capacitor and turn back the clock. We need to adapt to change.  

The pandemic accelerated trends that were already occurring in the industry. The move to online shopping and the need for the shopping experience to both be seamless and contactless have been profound. It’s a known fact that crises drives innovation- the adoption of click and collect, the creation of direct to boot and the love of shopping cashless continued to be embraced by shoppers.   

The pandemic also reversed some trends. The move from globalisation to localisation with more manufacturing being considered locally to sure up supply chains. Buying and shopping local has rarely been more coveted.  

The stars may have fortuitously aligned during the pandemic, but much like astronomers, the industry is staring down a vast of the unknown. 

We are working and hoping as an industry that the universe will provide, but the word on the street is ‘batten down the hatches’.  

Winter is coming – but another Spring will be just on the horizon.  

Australians could be nursing a new year hangover from frenetic Christmas spending at department stores, cafes and restaurants, with some analysts viewing the big increase in retail spending as the last hurrah before the reality of higher interest rates and spiking energy bills hits households.

While the Reserve Bank will not be meeting in January, back-to-school costs, rising mortgage payments and higher energy bills will start to flow through to household budgets soon, likely bringing to an end the run of pre-Christmas consumer spending.

The latest data collected by the Australian Retailers Association and Westpac shows a festive season spending splurge that defied all expectations, reaching a record-breaking $74.5bn – up 8.6 per cent on last year.According to figures from the ARA in partnership with Westpac DataX, Boxing Day trading also recorded unprecedented growth – up 15.3 per cent from last year – to a massive $1.23bn spend for the day.

While economists believe that about two thirds of that higher spending can be explained by rising inflation – meaning we paid more for the same goods and services – there was also a lift in the volume of purchases by consumers heading in to the new year.

“This is without a doubt the biggest festive season spend on record – it is unprecedented,” said ARA chief executive Paul Mr Zahra.

“It is remarkable that in this ­period of economic turbulence, traders have well and truly smashed it out of the ballpark as consumers revelled in ‘freedom’ spending,” he said.

“An unrivalled $74.5bn spend leading up to Christmas still didn’t diminish the spending appetite of Aussies leading into the year’s marquee retail savings event.

“The past three years have been incredibly challenging for everybody – and retail traders were certainly no exception. The resilience and agility of the industry has been remarkable.“The success shared by department stores, in particular, is truly outstanding, defying many predictions by commentators.”

Mr Zahra said according to the data collected by Westpac, department stores drove the greatest sales growth on Boxing Day – up 23.6 per cent on last year – to reap $149.4m. Cafes, restaurants and takeaway food services were up 22.8 per cent, and clothing and ­apparel were up 19.8 per cent.

Mr Zahra said Boxing Day in particular was about “saving money” and could reflect a growing concern among households as they enter the new year and face tightening budgets due to interest rates, energy and the cost of living.

“Boxing Day has different dynamics; Boxing Day is about saving money,” he said.

“So if you think about it, people under household budget pressure are saying well actually, what do I need that I can buy at a discount now and save some money.”

Jade Clarke, the head of Westpac DataX, said spending remained strong despite the rising cost of living: “The data shows that despite a year of increasing living costs, Australian retail sales have remained strong over the holiday period, improving on last year.”

Sydney’s Pitt Street Mall was bustling on Thursday with shoppers eager to snap up discounts in festive season sales, hoping to beat the inflation crunch.

Psychology student Anne Hollerich said she had splashed some Christmas cash, but admitted she had not paid much attention to inflation until she looked to book flights home to see her family in Luxembourg for Christmas.

“It cost so much – thousands and thousands – to get home; it was just too expensive,” she said, so she is now spending new year in Sydney and her first festive season away from home.

New shoes, pyjamas, and beauty products were popular items snapped up by shoppers, with some saying they were getting their shopping done now before they face higher prices back home.

But for mother Chantelle Potgieter, shopping with her daughter Megan, 16, she can already feel the inflation crunch. “Every time I go to shop for groceries it costs 30 per cent more, no matter how I try to plan it,” she said. “I might not be thinking about it while we’re out spending Christmas money now, but you can tell it (inflation) does already have an impact.”

When Vivienne Westwood, who created the torn tartan coattails the Sex Pistols rode to punk stardom in the seventies, accepted an OBE from Queen Elizabeth in 1992, her ability to confound expectations peaked.

To be fair, it wasn’t a complete curtsy to the establishment. She wasn’t wearing knickers (Westwood, not the Queen) for the ceremony, or to collect her damehood in 2006.

Westwood’s legacy as a designer and trend oracle is much clearer, following her death, aged 81.

The daughter of a factory worker and cotton weaver, she rose to notoriety clothing punks in torn T-shirts with pictures of the Queen with her lips safety-pinned, swastikas and bare breasts from her store on London’s Kings Road provocatively called Sex, later renamed Seditionaries, before becoming World’s End. Strangely enough, what followed was far more interesting.

Focusing on fashion in her forties, following her disillusionment with punk, Westwood mined galleries and literature for trends that continue to infiltrate the collections of her peers, evident from her first runway show in 1981 for the Pirates collection.

Those conical bras that made Jean Paul Gaultier a star in 1987 and became the uniform of Madonna’s Blonde Ambition tour, are pointedly apparent in Westwood’s Buffalo collection of 1982.

Controversial designers Dolce & Gabbana built an empire and Kardashian client base on corsets, revived by Westwood in 1991. Mini-crini’s from a 1985 runway show packed with dishevelled Marie Antoinettes turned up the volume for the pouf skirts that followed from Christian Lacroix.

“Vivienne Westwood’s contribution to fashion is unique, perhaps unparalleled,” British fashion journalist Alexander Fury writes in Vivienne Westwood: Catwalk. “She is certainly the most important fashion designer of the latter quarter of the 20th century.”“Our appreciation of every fashion designer today, how the fashion world is today, how we view fashion, is different because of Vivienne Westwood,” milliner Stephen Jones told Another Magazine in 2017. “And that goes for John Galliano, Alexander McQueen, Rei Kawakubo, Martin Margiela – everybody has been influenced by her.”

Westwood’s talent was often obscured by a love of stunts, almost greater than that of her ex-partner, Sex Pistols promoter Malcolm McLaren. There was her 1989 Tatler magazine cover as a disturbingly convincing Margaret Thatcher, sending Naomi Campbell down the runway in 1993 in platform shoes that toppled the supermodel like a wounded giraffe and that confident twirl outside Buckingham Palace in 1996 that amply revealed her disdain for underwear.

Often these stunts were staged to promote causes, such as her commitment to climate change and nuclear disarmament. Westwood also took the counterintuitive move of encouraging customers to buy fewer clothes.

The protests didn’t get in the way of a push for profits by the independent business, with Westwood designing the cabin uniforms for Virgin Atlantic airlines, collaborating with Burberry in 2018 and more recently Asics sneakers. Westwood also designed the extravagant dress worn by Sarah Jessica Parker as Carrie Bradshaw for her aborted wedding in the Sex and the City movie.

Since Paris Fashion Week Autumn-Winter 2016, Westwood’s creative partner and husband since 1993, Andreas Kronthaler, designed the runway collections, refining the label’s language of tartans, pirate paraphernalia, corsets, platforms, heart-shaped lapels and meringue silhouettes.

Kronthaler, 56, who met Westwood as a student, also picked up on Westwood’s rebel spirit. The brand was accused of plagiarism in the autumn/winter 2017/18 collection. T-shirts with the slogan “We do big sizes! 2XL 3XL 4XL 5XL!!!! We do very small sizes!!” had been lifted from designers Louise Gray and Rottingdean Bazaar.

A statement appeared on the brand’s social media in 2018 saying: “We are sorry. The use of your graphics on our T-shirt was only ever meant to be a celebration of your work. We got caught up in a last-minute frenzy and did not contact you to ask for your permission. We are truly sorry about this mistake and want to make it up to you.”

The apology only deepened Westwood’s reputation as a responsible rebel.

In a statement, Kronthaler made it clear that he will continue Westwood’s work.

“I will continue with Vivienne in my heart,” Kronthaler said. “We have been working until the end and she has given me plenty of things to get on with.”

Westwood also maintained her contradictions until the end.

“I don’t even like fashion,” she said in an interview with NME in May. “Well, sometimes I do.”

Woolworths, which also owns The Country Road Group, paid $2.1 billion for David Jones in 2014 and has since made over $1 billion in writedowns and sold the rest of its property portfolio to repay debts. It also was hit hard by the pandemic with rolling store closures.

The last significant jewel in David Jones’ crown is the Melbourne Bourke Street store – valued at about $250 million – which is in the middle of a major facelift. Under the deal, David Jones will enter a long-term lease for the flagship on market terms.

It is believed that any sale of this store – which sits on 3,984 square metres of land and 25,000 square metres of net leasable floor space – would occur when the CBD market was in better shape.

JLL head of capital markets Josh Rutman said Melbourne’s Bourke Street mall was going through a revitalisation where several buildings were being repositioned with the view of taking advantage of the next property cycle in the CBD.

“There is a good story for the mall. But potentially there is more value in the future based on the activity in the precinct,” said Mr Rutman, who was involved in the sale of David Jones menswear store across the road in 2021.

A clean exit

“There has been a huge influx in international capital taking advantage of the real estate market in Victoria. They see an upside for Melbourne real estate coming out of that post pandemic period.”

The David Jones sale would result in a clean exit after a near decade of ownership under Woolworths, which is being advised by Goldman Sachs. David Jones’ equity value on Woolworths books today sits at $289 million.

Anchorage, which is being advised by Rothschild & Co, plans to back Mr Fyfe and his team, and support his strategy to upgrade stores to create a more seamless omnichannel experience and cut unpopular brands while adding others. Mr Fyfe took over in October 2020 – making him the fifth CEO at David Jones in just five years.

Phil Cave’s private equity firm has made several high-profile deals in the retail space including Brand Collective, the footwear businesses which housed Volley and licensed brands such as Hush Puppies and SuperDry, and Shoes & Socks kid’s shoe chain.

Anchorage grew Brand Collective’s online sales from less than five per cent of total sales to greater than 20 per cent while managing a network of over 100 stores. In 2021, the firm sold the combined entity to Larry Kestelman’s LK Group.

But many investors in the sector have had trouble looking beyond consumer electronics retailer Dick Smith, which ended in heartbreak for creditors and left consumers holding $20 million in unused gift cards high and dry after it went under.

Anchorage snapped up Dick Smith for just $20 million from Woolworths in 2012. It introduced a new CEO, and went about its turnaround strategy that included introducing KPI dashboards rolled across all stores linked to staff incentives, opened a Hong Kong sourcing office for private label products, cleared out old stock and created a new digital platform.

The company’s $520 million initial public offer in late 2013 was lauded as a success. But just two years later the retailer fell into administration leaving creditors more than $260 million short.

Those close to Anchorage said Dick Smith’s performance was significantly improved during PE ownership, including a stronger balance sheet.

Mr Fyfe recently told The Australian Financial Review that David Jones was in a strong position to maximise profitability in the years ahead and be a leader in omnichannel retail. Woolworths flagged in November that sales increased by more than 55 per cent in the first 20 weeks of the new year. 

The positive start came after it posted a $14.5 million profit in full year 2022 and sales of $2.06 billion. Normalised earnings were up 18 per cent to $107 million.

One senior investment banker not involved in the deal called Anchorage’s IPO of Dick Smith “a masterful exit around the timing of working capital”.

The banker, who regularly works on complex special situations, said there would “likely be a massive operational slash and burn” at David Jones when Anchorage takes control of the 184-year-old department store.

The investment banker added that given the tough outlook for retail next year, perhaps being outside public markets was “not a bad thing” for David Jones.

Grocery giant Woolworths is preparing to move further down the four-legged, feathered and furred route, homing in on a deal to invest in dog and cat food and pet accessories business PETstock.

It is understood Woolworth is in late-stage talks to take a major stake in PETstock and invest alongside the group’s Victorian founders and management team.

Sources said PETstock had sounded out a number of potential investors, before focussing on recent efforts with Woolworths.

Having got out of pubs and pokies (at least as far as business lines go) and petrol in recent years, pets are emerging as a growth engine for Brad Banducci’s team. The country’s biggest and most valuable grocer has been pushing further down the pets route, trying to capitalise on increased pet ownership and owners’ propensity to spend more on their animals.

Woolworths’ pet interests start with petfood and accessories sold in its supermarkets, which makes it one of the biggest players in the sector, and includes its controlling stake in specialist online retailer PetCulture. It also has a pets JV with insurer Hollard Group.

Adding PETstock, or a stake, would be another way for the retailer to attack the market.

PETstock was founded 20-years ago by brothers David and Shane Young, who owned Ballarat Produce and started PETstock to expand their horizons.

Round of a-paws

The group has grown significantly, hitting nearly $700 million in sales and $54 million in profit before tax in the 2022 financial year. Revenue was up from $524.7 million in FY21, while profit increased from $29 million, according to accounts filed with the corporate regulator.

The group had $161.4 million net assets at July 2, its balance date. The biggest balance sheet line items were right-of-use assets and liabilities (leases) worth close to $240 million, while it had nearly $12 million in cash and $95.7 million inventories.

The accounts told a story of a healthy and fast-growing retailer. The group saw a $2.5 million increase in cash during the year, with a strong operating resulted matched by growth initiatives like buying out stores and paying for property, plant and equipment.

Woolworths declined to comment on its interest in PETstock on Sunday.

The potential deal comes only five months after PETstock acquired Best Friends Retail, a specialty pet retailer across eastern Australia, for $180 million. The group settled the acquisition using renegotiated loan facilities.

PETstock also acquired Pet City in Western Australia in July for $31 million.

Fashion platform The Iconic has launched The Iconic x FNFD Incubator Program for First Nations designers.

The collaboration is an extension of The Iconic’s long-term cooperation with FNFD (First Nations Fashion + Design), which combines the brand’s e-commerce experience and worldwide network as part of Global Fashion Group (GFG), with the insight and perspective FNFD provides from their community participation and industry impact.

The 2023 Incubator Program was created as a prototype to establish the tone for young creatives. Fashion designers, jewellery and accessory designers, graphic artists, and textile artists from various backgrounds and generations are eligible for the program.

“Interest in First Nations fashion has exploded in recent years, with designers like Nungala Creative and Clothing the Gaps piquing the interest of the mainstream with considered, sustainable and beautiful designs that pay respect to country and culture,” said Grace Lillian Lee, founder and CEO at FNFD. 

The Iconic says the collaboration is an important aspect of the brand’s Indigenous Engagement strategy, which was recently unveiled as part of The Iconic and GFG’s People & Planet Positive vision. The 2030 strategy offers five strategic pillars that are intended to achieve positive environmental and social transformation while also caring for its people.

Expressions of Interest for the co-designed Incubator Program are now being accepted until January 15 but may close early due to overwhelming demand. People can learn more via this website. 

In August, The Iconic debuted a new feature that allows consumers to resell previous purchases in collaboration with the re-sale platform AirRobe.

When customers buy their preloved Prada or hand-me-down Hermes from fashion marketplace Vestiaire Collective this Christmas, they’ll be helping the environment in more ways than one.

The preloved luxury fashion marketplace, which sells brands suchs as Balenciaga and Burberry, has joined forces with Australian carbon-neutral shipping company Sendle to provide consumers with a more affordable and sustainable parcel delivery service.

“The cool thing about our partnership with Vestiaire is they’re also a B Corp, and they’re really about sustainable, preloved fashion. So, they share strong values that align with us,” Moody said.

B Corp Certification is a classification that a company is meeting high standards of performance, accountability and transparency across all parts of its business. For a company to get B Corp Certification they need to meet high social and environmental benchmarks.

“With Vestiaire you’re going to save money [and] you’re going to get it delivered to you in a way that’s taking full responsibility for all the carbon emissions,” Moody said.

A growing number of consumers, including those in the Australian market, are turning to preloved or up-cycled fashion rather than contributing to the throwaway culture of fast fashion. Joint research from Boston Consulting Group and Vestiaire found that since 2020 the secondhand luxury fashion market had tripled in size, and that the resale fashion market is worth between $100 billion and $120 billion worldwide.

The partnership with Vestiaire is the latest of many for Sendle, which already has ties with companies such as ebay and Shopify, and comes as the company expands into the Canadian market following its launch in the US in 2019.

Despite debuting in the US just before the COVID-19 pandemic, Moody said the business had exploded, and the decision to catapult it into Canada came from an obvious gap in the market, which reminded him of Australia when they started in 2014.

“Canada is very similar to Australia, where there’s just one big monopoly provider, and we are creating choice,” Moody said.

“It’s [Sendle] cheaper, we will pick it up from you, and it’s 100 per cent carbon-neutral, and it generally gets there faster.”

The difficulty, however, isn’t in providing people with a better option, it’s about telling people there is an alternative. For that, word-of-mouth can be the best tool.

“Small business networks are really, really big... our purpose is built around unlocking network capacity so small businesses can compete... and then after that we start to look for partnerships.”

As for the future, Moody said more expansions were on the horizon and there was no ceiling for the business in terms of prospective markets.

“I think country expansion has been like a muscle, and we are learning how to flex that muscle a bit more,” he said.

“Our vision is to be the largest small business courier in the world. We believe very much around levelling the playing field for small businesses, and we see that as an opportunity everywhere.”

Strand has begun its new concept store rollout with the launch of its Melbourne-based Highpoint flagship on December 10.

The new concept rollout will see an increase of each store's square meterage by 2023 and will run across its 268-store portfolio. By 2026, Strand is expected to grow the total square footage of their stores by 52%.

Strand’s new Melbourne flagship is the retailer's largest at 380 square feet, and includes a new layout designed to hero the brand’s revised fashion-forward strategy.

The in-store experience includes improved visual merchandising, digital integration and dedicated sections to showcase Strand’s range of in-house and external brands.

Its features include a concierge assisted service model, with handbag stylists and luggage advisors, and a one-on-one service bar that allows customers to engage with the Strand team. Shoppers will also be able to choose click and collect pickup and secure pre-orders on upcoming new arrivals.

Digitally, the new concept includes Mobile POS, where customers can pay anywhere within the store, and staff will be equipped with headsets to improve customer service and team cohesion. Digital screens have been added to all customer touchpoints to boost range viewing and to share promotional offers.

A window into the back-of-house wrap and pack station for online orders is also included.

Strand Group CEO Felicity McGahan said her team recognised a need to evolve the business in order to attract a new generation of fashion-forward customers.

“Our customers told us our in-store experience was lacking, with too much clutter and too much going on,” McGahan said. “We listened, and took onboard their feedback. Everything that we’ve introduced is considered and customer driven, from layout right through to concierge-style customer service and modernised point of sale.

"Our incredible new flagship store at Highpoint is the culmination of bringing the new brand strategy to life, blurring the lines between physical and digital and giving our curation of brands the room to shine for the customer.

"With dedicated branded zones, enhanced digital innovation and an elevated customer experience, we know that the blueprint for this flagship sets the perfect tone for the evolution of Strand stores moving forward”

Strand’s new Melbourne flagship follows its rebranding strategy, marked by a brand name change last month from Strandbags to Strand. The brand is preparing for new initiatives to strengthen its rebranding into a new category, which it calls Fashion Travel.

Strand’s new flagship store is located on Level 3 of Melbourne’s Highpoint Shopping Centre in Maribyrnong.

The brand originated in Sydney, Australia in 1927. It is currently celebrating its 95th anniversary.

The Australian Retailers Association has welcomed the NSW State Government’s Back to School voucher program, saying it will provide financial support to small businesses and many families across the state.

From today, NSW parents can access $150 worth of vouchers through the program on uniforms, textbooks, stationery and other school essentials.

ARA CEO Paul Zahra said spending vouchers will help offset cost-of-living pressures and boost the retail economy.

“We warmly welcome this initiative, as an extension of the highly successful voucher programs previously introduced by the NSW Government,” Zahra said. “The ARA held ongoing discussions with the government through the pandemic about the power of government vouchers – we are grateful to have a government that listens to business feedback and responds.”

Zahra said that vouchers help bring people into shops, driving a positive flow-on effect for retail and surrounding industries.

He added that the Back to School season is an important time on the retail calender, with this year falling during high inflationary pressures.

“No doubt many NSW residents will appreciate the thoughtful approach as they consider their budgets with cost-of-living pressures continuing to bite,” he said.

“This is a powerful way to not only support budget-conscious NSW families but to also support small business and keep the retail and business economy moving in these challenging times.”

NSW Premier Dominic Perrottet said the summer holidays are a good time for families to start buying supplies for the new school year..

“The NSW Government wants to make sure every child attending school has the opportunity to strive for their best when they are in the classroom and providing access to essential items for learning is our priority,” Perrottet said.

“Parents, guardians and carers, including foster carers, can apply for three $50 Premier’s Back to School NSW Vouchers per child, which can be used at registered businesses towards items including bags, shoes, prescribed textbooks and lunchboxes.

“The end of year is an expensive time for many households with Christmas and family holidays to pay for which is why the NSW Government is investing $193 million into the vouchers to help ease those cost of living pressures.”

Treasurer Matt Kean said the NSW Government understands getting ready for the new school year can be expensive and encouraged parents to take advantage of the vouchers to reduce the costs of buying new school gear.

“From small uniform shops to larger stationery retailers, the pick-up from business has been strong already with more than 500 across the State registered to accept the vouchers and more expected in the coming months,” Kean said.

“Not only are the Back to School NSW Vouchers a big help for families in getting kids equipped with what they need, they’ll provide a real shot in the arm for businesses across the state too.”

Minister for Customer Service and Digital Government Victor Dominello said people can start applying for the vouchers from today, until they expire on 30 June 2023, giving everyone plenty of time to take advantage of the savings.

“Applying for the vouchers is simple and can be done in a matter of minutes using the Service NSW app, on the phone or by visiting a Service Centre,” Dominello said.

“Parents and carers can search for registered businesses in their local area by using the online Business Finder Tool and can use multiple vouchers in one transaction.”

The Premier’s Back to School NSW program is one of more than 70 government rebates and vouchers available through the Savings Finder program.

Fast-fashion retailer Shein has filed confidentially with US regulators for an initial public offering that could take place next year, according to a person familiar with the matter.

The online retailer, which was founded in China but is now headquartered in Singapore, is working with Goldman Sachs, JPMorgan Chase & Co. and Morgan Stanley on the listing, said the person, who asked not to be identified because the filing wasn’t public.

Representatives for Shein, JPMorgan and Morgan Stanley declined to comment. A spokesperson for Goldman Sachs didn’t immediately respond to a request for comment. The filing was reported earlier by Shanghai Securities News.

Shein (pronounced “she-in”) has become popular thanks to its trendy clothing at ultra-low prices. The company has been hoping for a valuation of as much as $US90 billion ($136 billion) in a US IPO, Bloomberg News reported earlier this month. Shein’s estimated sales now far surpass Zara and H&M in the US fast-fashion market.

At the same time, Shein has come under fire for poor labour conditions in factories it partners with, overproduction of poor quality garments and the use of cotton from a Chinese region accused of using forced labour. US senators have written to Shein chief executive officer Xu Yangtian (also known as Chris Xu) to request more information on the labour claims.

The criticism hasn’t stopped Shein’s meteoric rise among shoppers all over the world.

Last year, Shein opened distribution centres in the US, Canada and Europe to accelerate shipping times in those regions. It has also begun to expand manufacturing in Brazil, Turkey and India.

Speed is the Chinese company’s defining characteristic, anticipating the tastes of Western teenagers and catering to shifting preferences almost instantaneously using artificial intelligence and ultra-quick supply chains.

Shein’s founders’ roots in online marketing are key to the company’s success. Through real-time data and algorithms, Shein identifies hot items and adjusts production to keep inventory rotation and delivery speedy.

It was the pandemic that turbocharged growth as teens and 20-somethings stuck at home and often on limited budgets turned to the company’s ultra-cheap online offerings. More than half of its customers are from Gen Z, those born between the late 1990s and early 2010s.

The retailer offers a wide range of products under $US10, and suppliers need to deliver new designs in around 10 days, even faster than Zara’s famous three-week turnarounds. 

Shein has drawn audiences across Europe and the US — its dominant markets — with its viral “clothing haul” videos, featuring influencers modelling “dream wardrobes” with pieces starting at $US3. The videos ricocheted across TikTok and YouTube during every major shopping season, with Shein releasing thousands of items weekly. The company sprinkles its marketing with star power through virtual concerts hosted by major celebrities.

In 2018, Shein’s value was $US2.5 billion. A year later it had doubled, and now it’s eyeing a $US90 billion valuation. As Shein’s growth took off, its CEO Xu, born in China’s eastern Shandong province in 1983, built one of the world’s great fortunes. The 40-year-old is now worth about $US21.5 billion, according to the Bloomberg Billionaires Index, which estimates his stake in Shein at about one-third.

Retailers are overstocked and are ordering less from manufacturers as the economies of the United States and Europe slow markedly, and this will have a ripple effect on the entire global economy says the managing director of logistics giant Toll Group.

Alan Beacham, who was speaking to the Australian Financial Review Infrastructure Summit from Singapore, said Toll was already noticing lower orders from retailers in the US and Europe, which were adjusting inventory levels downwards as demand from consumers slowed.

“Retailers are overstocked, so they’re ordering less,” Mr Beacham said.

“This means you’re going to see an even further slowing next year in terms of those orders into the manufacturers, which kind of creates a ripple effect into global trade,” he said.

He said a “perfect storm” looms next year because inflation will still be a big issue as consumer demand declines. “Demand will be down, so we have that perfect storm of a lower top line and an increasing cost line,” he said.

The warning shows how the resolution of supply-chain bottlenecks that were exacerbated by hot consumer demand and product shortages during COVID-19 lockdowns is still leading to forecasting errors and complicating ordering decisions by consumer goods companies.

‘Not smooth sailing’

Mr Beacham also said a large amount of new shipping capacity is set to come into the industry from late in 2023 until 2025 as new vessels arrive, which is the equivalent of adding 30 per cent of the current global shipping fleet. That is coming on stream at a time when demand is likely to fall.

He said the costs of shipping and bringing in goods to Australia from offshore have dropped significantly compared with a year ago, but there are still disruptions in supply chains.

“It’s not smooth sailing yet,” he told the summit. He said reliability levels are still below 50 per cent, and industrial relations issues in Australia have exacerbated the situation. “It’s still a fragile supply chain,” Mr Beacham said. But shipping container index tracking shows a 70 per cent reduction in price from November 2021 to November this year.

“It has fallen very quickly,” he said.

Race to the bottom

Jon Davies, the chief executive of the Australian Constructors Association, told a panel examining the issues of rising costs and inflation that construction companies have been undervalued in Australia for too long and a race to the bottom approach – where margins are pushed lower and lower when tendering – needs to stop. “We’re almost looked upon as a commodity,” Mr Davies told the summit.

Having to accept low-single digit profit margins on large projects with significant risks needs to “fundamentally change”, he said.

Rebecca Hanley, managing director of engineering and construction group Laing O’Rourke, said if there was a slowdown in the economy and some projects were put on hold, it would reduce a “hyper escalation” of projects that had built up and make the pipeline of projects more sustainable.

“The peak just keeps shifting to the right, because we never reached that peak,” Ms Hanley said.

Australian fashion jewellery chain Lovisa says it is ramping up its international expansion as sales continue to grow across its network.

In a trading update, the company said it had opened stores in new markets of Poland and Canada at the end of the last financial year, and new stores are set to open in Italy, Mexico and Hungary during the coming weeks.

The expansion comes on the back of strong sales during the first 19 weeks of the financial year. Global comp-store sales climbed 16.1 per cent as trading remained unaffected by government-mandated lockdowns. Total store sales grew 60 per cent compared to last year as network expansion boosted volume.

“We continue our focus on expanding our store network, with 47 net new stores opened for the year to date,” the company said in a statement.

After opening a net 47 new stores Lovisa’s network now stands at 676 across 26 countries.

Harvey Norman chairman Gerry Harvey is optimistic about retail spending into 2023, confident that the electronics and furniture retailer’s regional stores will power on despite fears of a slowdown.

The retailer showed further evidence on Thursday that Aussies are keeping up their spending on discretionary goods, revealing at its annual general meeting that there had been a 6.9 per cent jump in sales during the first four months of the 2023 financial year.

The company has also flagged a major expansion into the Malaysian market, with plans to grow there from 28 to 80 stores by 2028.

Harvey told this masthead that Malaysia’s population was bigger than Australia and its citizens were becoming increasingly affluent, meaning there was a big opportunity for the country to contribute significantly to Harvey Norman’s business in years to come.

“If you can get established in a country and be a number one retailer in that country in the products that we carry... then when that does happen, Malaysia in 10 or 20 years might be just as important as Australia,” the retail billionaire said.

Harvey said sales in the lead-up to the Black Friday special deals weekend and Christmas trading had been strong across the business.

“Everyone is out there advertising their head off [ahead of Black Friday]. The sales are very strong in our stores, and I expect they’re the same everywhere else,” he said.

While consumers could ease their spending in the new year, the impact might not be as strong as feared as regional town centres power on with strong employment and agricultural activity, he said.

“We are looking at it a bit optimistically because we have 65 percent of our stores in regional and country areas. Our country stores should be quite strong all next year.”

Investors didn’t seem to share his optimism, with Harvey Norman’s shares closed down 1.4 per cent to $4.17.

Meanwhile, rival furniture retailer Nick Scali also had good news to report, telling shareholders at its annual general meeting sales for the financial year to date were 74 per cent stronger than during the same time last year.

Shares in the company jumped 10.7 per cent trade at $10.34 in early afternoon.

E-commerce retailer Kogan was up 9 per cent at $3.74, with the stock advancing even though CEO Ruslan Kogan said at its annual general meeting that sales for the first four months of the financial year had dropped by 38.2 per cent during a period of “subdued sales activity in ecommerce”.

Despite this, he said the business would be able to return to its growth trajectory after it completed its sell-through of excessive inventory that it has been working through since it overestimated customer demand after COVID restrictions lifted earlier this year.

“We look to the second half of [the financial year] with confidence as the Kogan Group returns to being an agile, inventory-light business with strong operating margins,” he said.

Computers, technology, electronics and toys have been big sellers in the Black Friday to Cyber Monday sales, which are shaping up to break records as shoppers bring forward pre-Christmas spending to avoid future price rises and problems with supply chain disruptions.

Gerry Harvey, the executive chairman of retail chain Harvey Norman, said on Sunday that the Black Friday sales at the electronics, bedding and furniture chain set a record and the momentum continued over the weekend.

“All the bargain hunters are out there. The biggest sales are in computers and electronics. There’s still a lot of money out in the community and people are looking to buy now instead of waiting,” Mr Harvey said.

He suspected that shoppers spent more vigorously in the Black Friday period – which Harvey Norman labelled “Big Friday” in its marketing – than any other time in the retail calendar, including the traditional Boxing Day sales.

Mark Mezrani, founder and chief executive of educational toys chain Kidstuff, which has a network of 56 outlets, said business had been brisk over Black Friday and the weekend.

Kidstuff had a 30 per cent off sale and it had been very busy.

“Our Black Friday sales are very strong,” he said. “So far, so good, touch wood. It’s been very strong.”

He said it was a balancing act to try to maximise sales when the demand was there across the Black Friday period, which was now a huge event in the minds of shoppers. But some margin was sacrificed.

The consumer mind shift had been so significant over the past few years, it was a must for a serious retailer to be involved otherwise shoppers would go to rivals.

“This is an event that didn’t exist five years ago,” Mr Mezrani said. “There’s no doubt it’s the four biggest days of the year.”

Mr Mezrani said the two biggest selling items over the past few days had been a Squishmallow soft toy range, and a variety of different wooden toys as shoppers tried to shift away from plastic.

“There really is a big move to wooden toys, using recycled wood,” he said.

Carefully planned purchases

Paul Zahra, the former boss of department store group David Jones and now chief executive of the Australian Retailers Association, said shoppers were getting in quickly before future price rises, or supply chain disruptions caused stock availability issues.

“There’s no doubt that Black Friday has been fully adopted by retailers and consumers,” he said.

He said shoppers had carefully planned purchases before the sales event.

It was difficult to quantify how much had been pulled forward from the weeks leading up to Christmas.

“Some of it has been brought forward,” he said.

The ARA forecast that about $6 billion would be spent over the four days and records were likely to be set. “There’s still a day to go, but that’s what we’re seeing,” Mr Zahra said.

Some unique consumer psychology has also been at play. Many people want to spend up before Christmas gatherings, where they will finally be with family and friends in an unrestricted way after a very difficult time at the height of the COVID-19 pandemic.

“This is the first Christmas in three years when people are going to be able to fully get together and not have to do Zoom calls and things like that,” Mr Zahra said.

Although there were projections of economic gloom by many forecasters for 2023 as cost-of-living pressures bite and interest rates rise, they weren’t perturbed for now.

“They’re saying life’s too short,” Mr Zahra said, shrugging off any future rate rise pain.

“People aren’t worried about that just yet."

Foodland Supermarkets is set to open a unique “community-minded” liquor chain in South Australia early next month.

Dubbed ‘Local Cellars’ – the stores will sell local wines, craft beers and spirits depending on the region or location – while providing customers with what Foodland describes as “a premium shopping experience”.

Foodland Supermarkets CEO, Franklin dos Santos, said launching the liquor chain was the “next step” in the retailer’s growth pipeline.

“South Australia has some of the best wines, beers and spirits in the world and we want to encourage local producers in the community to prosper.

“The benefit of this approach is that we’re creating less emphasis on the need for transport which will minimise our impact on the environment.”

The first Local Cellars store will open in Renmark with more than 10 planned across the state before March next year.

In addition to local alcohol, the stores will also stock other South Australian complementary beverage brands and mixers. The stores will operate either next to a Foodland supermarket or as a stand-alone separate family business.

In November 2020, the retailer invested $300 million into a five-year plan to refurbish and add new stores in South Australia.

As the South African owners seek to progress a sale of David Jones, its full year 2022 accounts show that sales slipped slightly, and net profits were crushed by more than fivefold.

The latest filing to the corporate regulator by Osiris Holdings, the local vehicle that holds the department store, showed that sales for the 52 weeks ended June 25 reached $2.06 billion from $2.11 billion the year prior. That includes merchandise sales and concession commissions.

Profits after tax fell to just $14.53 million for the year from $84.26 million in 2021.

Profits from its share of its credit card alliance fell in 2022, and the retailer did not have the significant boost from the sale of property it achieved in 2021. Woolworths repatriated $90 million in special dividends in March.

Charter Hall snapped up the prized 12-storey Elizabeth Street flagship for $510 million in 2021. It also sold its Market Street store and its menswear site in Melbourne. David Jones still owns Melbourne’s Bourke Street store, which is mid-refurbishment.

David Jones chief executive Scott Fyfe said despite the 2.6 per cent fall in sales, it was a “tale of two halves” in 2022, and David Jones was now a profitable and self-funding business.

“It is a strong result, attributable to our continued focus on delivering on the Vision 2025 strategy, which includes space optimisation and cost-out initiatives, the rationalisation of the DJs food offering and, a focus on trade and omnichannel,” said the Scot driving the turnaround.

He added that David Jones was in a strong position to maximise profitability in the years ahead and be a leader in omnichannel retail.

Woolworths flagged early this month that sales increased by more than 55 per cent in the first 20 weeks of the new  year, with its flagship and CBD locations performing well ahead of expectations.

Trade was seriously hampered a year ago by extended lockdowns, resulting in relatively higher growth rates in the current period.

The ultimate parent of Osiris Holdings is Woolworths, which is listed in Johannesburg and is working with Goldman Sachs to explore a sale of the 184-year-old department store.

It is believed that Woolworths wants a deal by early next year. Any buyer would want to see pending Christmas trading.

The Australian Financial Review’s Street Talk revealed that Teoh Capital – the private investment firm of billionaire David Teoh and his family – joined the auction for the nation’s oldest department store chain which could spell the end of a rather painful era for its offshore owners.

Phil Cave’s Anchorage Capital Partners is also in talks with the seller and its bankers. It is believed to have lined up $150 million in working capital and $50 million in guarantees to help fund its likely bid.

Australian Christmas retail sales are predicted to exceed $60 billion, despite the impact of inflation and cost of living problems, according to research from the National Retailers Association (NRA).

Covering the pre and post-Christmas shopping periods, that figure would represent a 3.9 per cent increase over last year.

Quoting the organisation’s Consumer Sentiment Report, interim NRA CEO Lindsay Carroll said buyers are preparing for the holiday shopping season by modifying their spending habits in order to afford Christmas events and gifts.

“It’s clear people still want to feel special and have those great experiences but rather than indulging in costly goods and services, shoppers are planning ahead to score bargains in the upcoming sales events,” she said. 

Meanwhile, the Australia Retail Association (ARA) says Australian retail sales increased 12.9 per cent in October compared to the same time last year, with sales climbing 28.2 per cent on pre-pandemic levels.

“Retail performance this year continues to be outstanding, despite a dramatic drop in consumer confidence due to inflation,” said Paul Zahra, ARA CEO. 

Zahra said the Delta lockdowns of a year ago were a “driving factor” in the surge, and predicted the “strong sales momentum” is encouraging for the most important retail trade season of the year, Christmas.

Online retail anticipates another “strong” year of growth due to shifting consumer behaviour and the growing appeal of occasions like Cyber Monday. People want to finish their holiday shopping before December, and bargain sales events are becoming more common, enabling customers to research products and make purchases at any time and from any location.

Carroll said retailers should be encouraged that there are still customers out there willing to spend their money this season – “but more than ever they are looking for bargains, for great shopping experiences and for smooth transactions,” she said. 

However, once the Christmas festivities are over, the ARA forecasts sales will fall next year. The most pressing trading difficulties for retail right now, he said, are debilitating workforce shortages and managing ongoing supply-chain disruptions.

Australian-owned and operated sportswear brand LSKD is opening its third retail space this year, as part of a plan to expand its retail presence before peak period.

The 150sqm Westfield Chermside store – which has a custom-front design – is set to open on 3 December, and follows the opening of its Chadstone store, which had 20,000 customers walk through the doors when it launched in October. 

It follows the brand’s first store, which opened at its headquarters in Loganholme, Queensland, in January, and is part of a plan to open five stores across all major Australian cities – as well as a shop in New Zealand – over the next 12 months.

LSKD founder and chief executive Jason Daniel tells Inside Retail that its core value is to move fast and break shit. 

The business – which started as a wholesaler before transitioning to e-commerce in 2019 – achieved $50 million in sales over the last financial year, with Daniel explaining that it was in a position to utilise that growth, and grow its retail presence.

He says that the brand was motivated by its successful transition in e-commerce which, like physical retail, was uncharted waters.

“It was purely going back to our values. We were in a position where we could invest in the long term, as well as our community,” he said.

Daniel adds that the Chadstone launch was so successful in part because of its tights and shorts swap. 

The first 300 females and 300 males to enter the store were able to swap their shorts and tights with an LSKD model. It then worked with charity partner, Upparel, to donate the products that were handed in.

He said the initiative created a lot of energy and excitement over the shop launch, which saw lines forming from 5:30am on opening day.

“The best thing about retail is we can really connect and build community with customers,” he said.

“We’ll have two stores leading into this Black Friday, and three leading into Christmas.

“This time last year, we didn’t have any, so it’s really exciting.”

BMX origins

Daniel started the business, then called Loose Kid Industries, in 2002, when he was in high school. Its origin dates back to his nickname, as he would give everything a go on a BMX bike. He had ambitions of becoming a professional motocross athlete, before becoming a carpenter and building houses while working on the business.

In 2010, LKI became a full time job for Daniel. It produced a range of wholesale products, including life jackets, motocross gloves and socks and a bit of sportswear. It sold these products to retailers, including City Beach, which had over 66 stores across Australia.

In 2018, the business transitioned to LSKD, with Daniel explaining that it found its mission, which was inspiring people to ‘chase the vibe’ through sports, fitness and adventure. It pivoted to sportswear with a street aesthetic.

“I’m 35 now, and it was a 15-year learning experience that I was lucky to go through. We refined our products, and were very passionate about developing the best fabric in the world for our community, as well as the everyday athlete,” he said.

Daniel adds that the brand moved away from wholesale after launching its rep tights in July 2019, which was its best-selling product. 

The product took over 18 months to develop with the wants of its customers – rather than other retailers – in mind. 

When we closed our wholesale business down, we really just wanted to focus on our brand message and our customers,” he said.

“If we could really focus on them [we could] build something for the next 50-plus years.”

Giving back

Beyond plans to expand across the country and grow its New Zealand presence, LSKD is developing a United States team, and has recruited 175 new team members for its fulfilment centre to prepare for peak period. Daniel said it’s part of its growth plans, which is on track to grow another 50 per cent this year.

This growth is partly tied to the brand’s product development – in order to create the best sportswear in the world –  as well as its values, which includes an emphasis on sustainability, as well as work with charity partners. 

Its Project Earth initiative involves in-house commitments to reduce printing and paper by 20 per cent each year, as well as a focus on reusable and biodegradable packaging. Daniel says that he has used the brand’s ziplock packaging as a lunch esky, travel bag and gym bag. 

It also works with charity partners such as the Cystic Fibrosis Queensland, Wear It Purple and the National Breast Cancer Foundation. It raised $70,000 for the NBCF last month, and has ongoing products where 5 per cent of sales are donated.

They also have an in-house give-back crew, formed by its CFO, which allows the team to support local communities and organisations. 

Daniel says that it provides an opportunity for team members to support organisations that they care deeply about.

“There’s more that’s happening in this space that we’re going to share more of, because it can inspire other brands and our community [in terms of] how they can give back as well,” he said.

“Learned more from the mistakes I’ve made”

Working on LSKD since he was a teenager, and being in the role full-time since 2010, Daniel says the biggest learning moments have come through mistakes, which have helped to build the brand’s identity.

“If we had this growth 10 years ago, I don’t know how I would’ve handled it, because I was so young, and I’m not sure I was in the right frame of mind to learn from those mistakes,” he said.

“Our business was much smaller for many years, and as much as you want it to grow quickly, sometimes it doesn’t. Then we started to figure out that creating something bigger than ourselves – and standing for something more than just selling a product – was so important.”

Trans-Tasman retailer Strandbags has changed its brand name to Strand as part of a multi-year modernisation strategy to attract new customers.

The company will follow up the name change by investing in improving customers’ omnichannel experiences including modernising all systems, introducing automation and streamlining operations.

Strand Group CEO Felicity McGahan said the brand’s legacy needs to “evolve” and attract a new generation of shoppers.

“For 95 years, Strandbags has been a consistent and reliable presence in the lives of thousands of Australians and New Zealanders. Our new purpose is to elevate all of life’s journeys – whether you’re planning a trip around the world, or simply popping out to the shops.”

Earlier this year, the retailer launched two private labels – Evity and Nere – which she said have both exceeded revenue targets. Evity alone is set to achieve sales in excess of $100 million in its first year.

“The success of these brands proves the efficacy of our modernisation strategy, and demonstrates the positive progress made to develop products that are fit for purpose and relevant to our growing customer base,” said McGahan.

As part of the brand’s evolution, its Melbourne-based Highpoint flagship has been transformed into a Boutique Service Model complete with Mobile POS, “trained handbag stylists and expert luggage advisors”. The store will open to the public on December 10.