News

6 Dec, 2023
Adore Beauty knocks back takeover approach, shares jump 20pc
Founder of Adore Beauty Kate Morris.  Darrian Traynor

Online beauty retailer Adore Beauty shares surged 20 per cent on Monday after it knocked back a $122 million takeover proposal from UK-based e-commerce and retail business THG.

The Australian company founded by Kate Morris and James Height, who together control 21.67 per cent, confirmed on Monday that it had received a non-binding indicative offer from the Manchester-based firm, which was first reported by Street Talk. 

Adore shares rose 20.9 per cent, or 19.5¢, to $1.13 on Monday afternoon. The offer range was about a 50 per cent premium to the share price of 82¢ on October 11 when Street Talk reported the appointment of UBS.

“Adore Beauty confirms that it received a non-binding, conditional and indicative proposal from THG … to acquire 100 per cent of the shares of the company by way of a scheme of arrangement for $A1.25-$1.30 cash per share,” the company said.

Adore said the proposal, which was subject to conditions including due diligence, “undervalued the company, was unable to be implemented, and was not in the best interests of shareholders. For these reasons, the board rejected the proposal.

 

6 Dec, 2023
Shopify data shows record start for Black Friday weekend
By Sean Cao

Shopify’s global merchants achieved record sales of US$4.1 billion during Black Friday, a 22 per cent increase over last year’s period.

The top selling countries were the US, the UK, and Canada, while the average cart price was US$110.71 globally, the data shows. The top product categories by orders included clothing, personal care, jewellery, shoes, and decor.

In Australia, the cities with the highest sales were Melbourne, Sydney, and Brisbane. The country’s average cart price was AU$165.70, while the top five product categories consisted of clothing, personal care, kitchen & dining, shoes, and jewellery.

“Another epic, record-breaking Black Friday in the books for Shopify merchants. The world showed up for our merchants, and the excitement is only building, with Cyber Monday still to come,” said Harley Finkelstein, president of Shopify.

Shopify says it will provide another update after Cyber Monday concludes. 

6 Dec, 2023
Bunnings tops rankings in customer experience excellence
By Celene Ignacio

Bunnings is the retailer 2500 Australians surveyed by KPMG believe offers the most excellent customer experience.

KPMG surveyed more than 20,000 people globally and over 2500 in Australia asking which brands deliver the best customer experience.

The Body Shop ranked second while Mecca landed third among the top 10 Australian non-grocery retailers, followed by Specsavers and Chemist Warehouse.

“In the retail sector, the digitisation of customer journeys across channels has been a differentiator that has helped move the bar for customer perceptions in Australia,” said Carmen Bekker, partner-in-charge at KPMG customer.

“Leading brands have been able to integrate these digital journeys with in-store experiences, recognising many Australians have retail journeys that begin online but also include an in-store touchpoint.” 
 

The report noted that customers generally are seeking more value for money, along with more seamless, omnichannel processes and more personalised experiences from brands.

“We see customer perceptions of value formed by how they feel about service and support. It is also formed by how organisations demonstrate their purpose, relevance, and ability to have a positive long-term impact on the environment and society,” said Bekker.

The Iconic, Bendigo Bank, Dan Murphy’s, Apple, and JB Hi-Fi are also featured in the top 10.

The study found that customer perception of experience excellence fell 3.8 per cent across all markets and that 61 per cent are willing to pay more to a company seen as ethical or giving back to society. Almost all respondents – 97 per cent – said the cost of living has impacted their recent purchasing decisions.

7 Nov, 2023
Australian retail sales witness modest growth in September
By Celene Ignacio

Retail sales rose 2 per cent year on year to $35.87 billion in September, Australian Bureau of Statistics (ABS) data showed.

The data prompted both the Australian Retailers Association (ARA) and the National Retail Association (NRA) to urge the Reserve Bank of Australia to keep the current interest rates to encourage more consumer spending.

“The Reserve Bank of Australia’s monetary decision [tomorrow] will be pivotal to the success of retailers during the most important trading time of the year – and we urge the RBA to hold interest rates considering this,” said ARA CEO Paul Zahra.

ABS data revealed that cafes, restaurants, and takeaway sales rose 6.1 per cent to $5.45 billion while food sales jumped 3.5 per cent to $14.16 billion.

“Food and takeaway again led the spending growth, and this is consistent with what we’ve seen all year – shoppers are prioritising the essentials in a cost-of-living crisis,” said ARA CEO Paul Zahra. 

Other retailing composed of recreational, sporting goods, and cosmetics rose 1.6 per cent to $5.5 billion, while department store sales went up 1.3 per cent to $1.92 billion. Clothing, footwear and personal accessory sales inched 1.1 per cent higher to $3.02 billion.

“Pausing interest rates again this month will allow consumers to spend more freely during the November/December sales period and will set retailers up for the coming silly season,” said NRA deputy CEO Lindsay Carroll.

“We hope consumer sentiment increases as retail’s biggest sales season approaches, resulting in a positive start for retailers moving into 2024.”

7 Nov, 2023
Cotton On posts record sales after overseas push
Cotton On CFO Michael Hardwick (left) and CEO Peter Johnson at the Geelong head office. Eamon Gallagher

One of Australia’s biggest retailers, Cotton On, backed by billionaire Nigel Austin, is advancing its international push after opening more than 100 overseas stores last year.

The Australian market still makes up over half of group sales, which reached a record $2.2 billion, up 4 per cent, over the 2023 financial year across its various brands including its namesake chain, Typo, Supre and Rubi, according to accounts lodged with the corporate regulator.

The Geelong-based fast-fashion behemoth’s bottom line was dented by higher rent and finance expenses, as well as a jump in materials costs and wages over the year to June 25.

Net profit was just $5.9 million, reduced from $114.2 million in 2021-22, the accounts of parent entity COGI Pty Ltd showed.

Sales growth in Australia was strong, up $53 million to $1.2 billion. North America achieved sales exceeding $401 million, Africa $183 million and Asia – retail and wholesale – $274.8 million. 

After stripping out $56.6 million in dividends, retained earnings were $189.5 million at balance date.

During 2022-23, Cotton On increased its offshore retail footprint by 15 per cent. The group also invested in new distribution facilities.

“International expansion remains a key strategic priority for the group, in line with our vision to take Aussie lifestyle brands to the world, delivering good along the way,” the account said.

Cotton On’s borrowings reached $326 million, up from $215 million.

The company also rejigged its operating model into two primary divisions: Cotton On, which includes Cotton On, Kids, Body and Rubi; and Emerging Brands, which includes Factorie, Typo, Supre and Ceres Life.

Cotton On was founded by Tania Austin and her former spouse Nigel Austin, starting with two stores in 1991 to 1500 stores today across eight brands in 22 countries. Ms Austin left the business in 2008, and bought retailer Decjuba.

Mr Austin, who landed at no.65 on The Financial Review Rich List with an estimated fortune of $2 billion, is notoriously private.

30 Oct, 2023
Kogan returns to quarterly growth despite YOY sales decline
By Sean Cao

Kogan has logged a 6.5 per cent year-on-year decrease in gross sales for Q1 of FY24, but recorded quarter-on-quarter growth for the first time since the first quarter of FY22.

Kogan is a portfolio of retail and services businesses that includes Kogan Retail, Kogan Marketplace, Kogan Mobile, Kogan Internet, Kogan Insurance, Kogan Money, Kogan Cars, Kogan Energy, Dick Smith, Matt  Blatt, Mighty Ape in New Zealand, and Brosa. 

The company’s gross sales were down to $189.2 million following the significant reduction in inventories.

However, the return of quarterly sales increase signifies that the planned period of consolidation within the firm has concluded. 

“This most recent quarter has been full of excitement for Kogan.com. In addition to returning the business to a position of continuous profitability growth and financial strength, we’ve been busy delivering new ways to delight our customers,” said founder and CEO Ruslan Kogan.

Gross profit of $37.4 million increased 19.5 per cent, with adjusted EBITDA of $8.0 million, demonstrating the sustained return to profitability.

The company recorded more than 2.8 million active customers as of September 30, while subscribers of its loyalty program increased to over 440,000.

“We are confident that the incredible deals we have lined up over the coming months will help in these tough economic times, as we continue to deliver on our promise of making the most in-demand products and services more affordable and accessible,” Kogan stated.

30 Oct, 2023
Teen clothing brand Pavement makes a comeback – at Big W
By Celene Ignacio

Teen fashion brand Pavement has exclusively relaunched at Big W stores across Australia as it seeks to provide budget-friendly clothing options to the youth market.

“We are thrilled to reintroduce Pavement to the Australian market, especially during these challenging times. Our brand’s ethos revolves around providing our young people with clothing that empowers them to showcase their personalities,” said Brooke Norton, divisional general manager at Designworks, the new owner of Pavement.

In 2020, Pavement entered voluntary administration as it struggled with the impacts of the Covid-19 pandemic.

“With our exclusive partnership with BIG W, we’re ensuring that style-conscious teenagers across the nation can access on-trend and affordable outfits that reflect their individuality,” said Norton.

Pavement collaborated with gymnast and actress Jada-lee Henry for a brand campaign. 

“Big W is thrilled to be partnering exclusively with Pavement for its comeback into the Australian market. We know Aussie families are constantly looking for affordable, quality fashion pieces and BIG W is excited to expand our clothing offering to meet these needs,” said Lowri Breed, head of commercial at Big W.

30 Oct, 2023
Forever New signs three-store deal in Kuwait
By Sean Cao

Womenswear brand Forever New is opening three flagship stores in Kuwait as part of its strategic partnership with fashion conglomerate Apparel Group.

The collaboration will also expand Forever New’s online presence to 6thStreet.com in the UAE.

Founded in Melbourne in 2006, the brand is known for its wearable and timeless collections that celebrate modern femininity, with over 400 retail and concession stores globally and over 30 million visitors to its websites each year. 

“We’re proud to partner with the Apparel Group to further expand our presence in the Middle East,” said Dipendra Goenka, CEO of Forever New.

“With extensive omni-channel capabilities and a strong focus on the customer, the Apparel Group will help deliver an exceptional shopping experience for our Forever New customers in Kuwait.” Neeraj Teckchandani, CEO of Apparel Group, said the partnership reflects the group’s commitment to elevating the fashion landscape in the GCC.

“Forever New’s timeless elegance and contemporary designs are a perfect fit for our market, and we are confident that the brand will be warmly embraced by our customers.”

30 Oct, 2023
King Living to make US retail debut
By Celene Ignacio

Furniture retailer King Living is expanding its footprint into North America, opening its first US showroom in Orange County, California late this year.

“After decades of research, we’ve crafted a space that aims to both inspire Californian residents as well as reflect our inherent dedication to authentic Australian design,” said King Living founder David King.

The new showroom will feature sofas, luxurious dining ranges, contemporary bed and mattress ranges, and outdoor collections.

The company intends to open a second US showroom in Chicago, followed by a second showroom in Canada – in Calgary – next year.

“The US is key to the King Living global expansion strategy and the market provides us with an unapparelled growth opportunity,” said David Woollcott, CEO at King Living.

The Australia-headquartered company said the success of its stores in New Zealand, Singapore, Malaysia, Canada, the UK and China was a key factor in its decision to expand into the US.

“This isn’t about growth for growth’s sake, this is about our belief that we will improve the lives of customers who choose our furniture; we are passionate about bringing our designs and our engineering to those who appreciate the King Difference,” said Woollcott.

30 Oct, 2023
Sheike enlists Australian designer for first-ever venture
SOURCE:
Ragtrader
By Christopher Kelly

Sheike has partnered with Australian fashion designer Mariam Seddiq to launch a limited-edition capsule collection.

The 16-style collection features a range of eveningwear garments that took around seven months to complete. It is currently sold online at Sheike, with curated ranges in 16 stores and three stores offering the entire range.

According to Seddiq, it is the first time Sheike has done a collaboration with an Australian designer.

“They initially asked me in October last year,” Seddiq said. “So it's been a long time coming, but we didn't actually start anything until late February. I designed the collection, and then we had a meeting, and then away they went.”

As part of the process, Seddiq requested Sheike to include sizes 18 and 20 for the range.

“I've just taken all my knowledge from every single body shape that I've worked with, and mixed it up and put it in this collection,” she said. “Because the thinnest woman and the curviest woman will have similar insecurities. My job is to make them confident and just hide those bits strategically and just make them feel more sexy.

Sheike head of design Marie Ektoras said conversations on collaborating with an Australian designer have always circled the business. She said the Seddiq collaboration had a freestyle approach without the restrictions to corporate guidelines.

“It feels like a more creatively authentic process,” Ektoras said. “We wanted to include Mariam’s signature silhouettes that her devoted clients love. We’ve injected colour to keep it fun whilst also offering a sleek, moodier vibe.

“It was also important to Mariam to include a size 20 and we too saw this as an opportunity to broaden our size curve.”

Seddiq said the design process with Sheike was a completely different model to how she designs her own collections.

“We don't cut until the order is placed,” she said. “And depending on if it's ready-to-wear or custom - like made-to-measure - they would get a ready to wear piece and we'd cut it to their size, and that is like a two week to a month turnaround, depending on what it is. Then there's custom, so they'd have fittings, and that is longer. So that would be equivalent to the Sheike production time.

“But, in saying that, we've made pieces for celebrities in a day."

The designer praised the collaboration process with Sheike, noting the similarities between both enterprises.

“I'm going to miss going into their offices, because everyone's super professional, but they're also fun. We have fun when we do stuff, but we're also quite prompt as well.

“It didn't feel like work. I didn't have to compromise anything. They just loved everything I created.

“The hardest part was to cull the designs, because it's not entirely my show. It needed to be a capsule collection, rather than… you know how I do the 42 looks for Fashion Week?”

Ektoras said Sheike has another collaboration in the pipeline that will be launched at the beginning of next year.

30 Oct, 2023
Super Retail Group sees slight like-for-like sales growth
By Celene Ignacio

Auto parts and outdoor equipment retailer Super Retail Group saw a slight like-for-like sales growth in the first 16 weeks of FY24 on the back of higher sales of Supercheap Auto and BCF.

The group booked a 2 per cent like-for-like sales growth during the period as compared to the same period a year ago. Supercheap Auto sales rose 4 per cent while BCF sales jumped 3 per cent.

“Supercheap Auto’s performance has been driven by ongoing strength in the auto maintenance category, including higher lubricant sales following a successful best performing oils campaign,” said Anthony Heraghty, CEO and MD at Super Retail Group.

“Accelerating sales growth in BCF has been supported by contribution from new stores and increased demand in boating, fishing and water sports.”

Sales of Macpac, however, fell 8 per cent, attributed to unseasonably warm weather that affected the sales of insulation and rainwear products. 

Rebel, which is poised to open a new store at Emporium, Melbourne before Christmas, posted zero sales growth. 

Super Retail Group has opened six stores year-to-date in FY24 and remains on track to open 24 stores during the year.

The group plans to spend $150 million in capital expenditure in FY24 for its store development program, a new national distribution centre at Truganina, improvement of customer loyalty programs, and enhancement of cyber, omni and digital capability.

27 Oct, 2023
Strand targets Gen Z market with new standalone brand
SOURCE:
Ragtrader
By Christopher Kelly

Australian bag brand Strand has launched a new standalone brand called AYA (“as you are”).

The new brand targets the youth segment, between ages 18-25, with the initial range consisting of over 10 styles and colourways, including handbags, mini bags, crochet totes, cross body bags, bowling bags, diamante clutches and luggage. 

According to Strand, the AYA brand will produce two collections a year - one in late summer and another in mid-Spring, alongside small drops in May and December.

Prices range from $39.99 to $79.99, with a suitcase priced at $250.

The new brand launch comes a year after Strand launched its now growing standalone brand Nere, with Nere's first store openings announced in both Australia and the United Kingdom.

“Off the back of our success in the ‘fashion travel’ category, we have created a spirited brand that is authentic, playful and celebrates individuality- at an accessible price point,” CEO Felicity McGahan said. “We are confident AYA will connect positively with the Gen Z customer.

“AYA celebrates the freedom of showing up as your true self, the collections encourage experimentation with self-expression. At its core AYA is an authentic, playful and versatile brand, promoting a sense of individuality and an evolving personal style.”

AYA has launched via a separate tab on the Strand website.

3 Oct, 2023
Consumer confidence is on the rise - this is why
SOURCE:
Ragtrader
Ragtrader

ANZ-Roy Morgan Consumer Confidence was up 2.2pts to 79.8 this week as inflation expectations continue on a downward trajectory.

ANZ economist Madeline Dunk said consumer confidence is now at its highest level since late April.

“While the series remains at very low levels, particularly for those paying off a mortgage, there are some early signs of tempered optimism amongst households,” Dunk said. “Confidence for mortgage holders rose 4.1pts to record its highest reading in more than seven months.

“Meanwhile confidence increased 4.7pts for renters, after a sharp fall the week beforehand, but declined 2.3pts among those who own their home outright.”

Alongside the lift in confidence, Dunk said inflation expectations fell to 4.9% in mid-September, calling it the lowest reading since February 2022 before Russia invaded Ukraine.

The drop to 4.9% in mid-September is down from 5.4% recorded in August 2023, and down from 5.6% recorded in July.

Expected inflation scores cover annually over the next two years.

Consumer Confidence is now 6.2pts below the same week a year ago and is 1.6 pts above the 2023 weekly average of 78.2.

ANZ and Roy Morgan claimed a lift in confidence about personal financial situations over the next year drove the increase this week.

Now a fifth of Australians (20% - down 1ppt) say their families are ‘better off’ financially than this time last year compared to 52% (down 3ppts) that say their families are ‘worse off’ financially.

Looking forward, 33% (up 3ppts) expect their family to be ‘better off’ financially this time next year while 33% (unchanged) expect to be ‘worse off’.

8% (up 1ppt) of Australians expect ‘good times’ for the Australian economy over the next twelve months compared to 34% (down 2ppts) that expect ‘bad times’.

There was also a 4 percentage point drop in Australians expecting ‘bad times’ for the economy over the next five years to 19% compared to now 10% (down 1ppt) of Australians expecting ‘good times’.

This comes as the RBA held interest rates in early September at 4.1% for the third straight month.

Roy Morgan noted the softening in inflation expectations in recent weeks suggest the RBA’s decision to leave interest rates unchanged during their last three meetings may be the correct decision, but added there are still significant pressures in the economy.

This includes the average petrol price in Australia increasing to $2.04 per litre.

Roy Morgan CEO Michele Levine said the RBA has taken stock of the evolving economic situation in Australia, leading to the drop in inflation expectations.

“Although the drop in Inflation Expectations during August and September is good news, there are signs that it may prove to be short-lived,” Levine said. “So far in September the Australian Dollar has hovered consistently below 65 US cents – including hitting a low of only 63.6 US cents.

“The immediate impact of the low Australian Dollar is being felt at the pump with average retail petrol prices averaging $2.04 per litre last week and above $2 per litre for the last five weeks.

“This is the first time since July 2022 petrol prices have been at a sustained high level above $2 per litre for more than a month.”

Levine said petrol prices are one of the most visible signs of inflation.

“If they continue to remain at an elevated level above $2 per litre, or even rise further in the weeks and months ahead, this will clearly increase the general inflationary pressures in the economy.”

Levine said that if these inflationary pressures in the economy continue to grow, there will be renewed pressure on the RBA to increase interest rates again.

“The next RBA meeting on interest rates will be new Governor Michele Bullock’s first in the top job,” Levine said.

“Although all the current signs are that the RBA is set to leave interest rates unchanged, as ANZ economists Adam Boyton and Blair Chapman noted in a research note today: the RBA opted for a ‘hawkish pause’ in September as they continued to ‘monitor incoming data and how these alter the economic outlook and assessment of risks.’”

3 Oct, 2023
JD Sports sees Australia as principal market in Asia Pacific
Inside Retail

JD Sports Fashion said it considers Australia a principal market in Asia Pacific on the back of the inauguration of the flagship store in Sydney, which the company says is its most successful new store opening globally.

The UK-headquartered sports fashion retailer opened the flagship store in Sydney in August and said it is on track to relocate its Sydney distribution centre to a new expanded site in FY24, as it anticipates the next stage of growth.

JD Sports opened four premium sports fashion stores in Asia Pacific during the first half of FY23 and ended the period with 84 stores in the region. Meanwhile, it closed eight stores in the region during the period as it withdrew from the South Korean market.

JD Sports noted it finalised the acquisition of non-controlling interests across Malaysia, Thailand, and Singapore after the period, a move that is expected to result in further growth for the brand in these markets.

Sports fashion in Asia Pacific during the 26 weeks to July 29 posted an organic growth of 25.6 per cent in revenue to £230.9 million ($441 million). Revenue from other retail fascias in the region surged 100 per cent organically to £1.4 million.

Globally, the company ended the period with 3347 stores. The group booked a 11.9 per cent organic growth in revenue to £4.78 billion while profit before tax jumped 25.8 per cent to £375.2 million, reflecting performance of sports fashion and outdoor stores.

Gross profit margin declined to 48.0 per cent.

“We have made good progress delivering on our strategic pillars, focusing on expanding the JD brand and we will open more than 200 JD stores worldwide in this financial period,” said Régis Schultz, CEO at JD Sports Fashion.

Schultz said that the company aims to accelerate its brand growth in Europe through purchasing non-controlling interest in ISRG and MIG and the acquisition of GAP stores in France.

“This is alongside the proposed acquisition of Courir in the region, which will, when completed, enhance the Group’s existing portfolio of complementary concepts, bringing into the company its market-leading focus on the female customer,” said Schultz.

3 Oct, 2023
Solomon Lew-run Premier Investments sales warns of retail crunch as sales slip
The Australian

Billionaire retailer Solomon Lew’s fashion conglomerate, Premier Investments, has warned of a challenging trading environment after cost of living pressures slugged shoppers through the fourth quarter.

And conditions might not improve into Christmas as higher food, petrol and mortgages continue to constrict clothing and apparel spending.

This pressure on consumers was evident in the company’s stable of clothing and fashion brands – including Smiggle, Peter Alexander, Just Jeans and Portmans – which suffered a 2 per cent sales decline over August and September, reflecting the increasingly tough trading landscape for ­retailers.

The lurch into negative sales growth was a switch from sales expansion of 7.7 per cent over February and March.

“You have got to put a roof over your head, that is mortgage and rent. You have got to put food on the table and supermarket prices are outgrowing what everyone expected,” said John Bryce, the interim chief executive of Premier Retail, the company’s flagship fashion arm.

“It is tough on the consumer, and we are a consumer discretionary business. You need to do those things first before you come shopping with us.

“I think in the climate we are in we are happy and doing the best we can, but we are going to maximise our performance if the consumer can get better.”

Premier Investments, the $3.9bn fashion and investment conglomerate con­trolled and chaired by billionaire Mr Lew, ended 2023 with a slight dip in its statutory profit, although pre-tax earnings were stronger and the company also lifted its dividend strongly.

The group – whose investments include fashion brands, equity stakes in Myer and kitchen appliances company Breville as well as a Melbourne office tower – is continuing a strategic review to assess the optimal future structure of the company, which could eventually lead to a demerger of the various parts.

Revenue for the year ended on July 29 was up 10.7 per cent to $1.7bn.

Premier reported record sales led by its better-performing chains, Peter Alexander and Smiggle.

The company posted a statutory net profit of $271.1m for the period, down 4.9 per cent, which reflects a change to its accounting treatment of its large investment in Myer.

Adjusted net profit of $278.6m was up 6.4 per cent on 2022.

For its Premier Retail arm, which houses its fashion and apparel brands, earnings were up 1.5 per cent to $357.9m. Among its key chains, Peter Alexander recorded sales of $478.9m, up 11.8 per cent, Smiggle had record global sales of$319.8m, up 22.4 per cent. There were record apparel brands sales of $844.8m, up 4.6 per cent.

Some of its fashion chains that usually exhibit lower growth than Smiggle or Peter Alexander had a bumper year in 2023. Portmans delivered record sales of $165.6m, Jacqui E delivered its best sales result in over a decade and the strongest growth of all the group’s apparel brands, up 17.5 per cent, and Just Jeans delivered its second best sales result in history with sales of $307.1m, up 4.6 per cent.

Outside of its fashion chains, Premier Investments’ stake in Breville had a market value of $829.3m and the investment in Myer had a market value of $137.7m. At the end of fiscal 2023, it had closing cash on hand of $417.6m.

Premier Investments declared a final dividend of 60c per share, up from the 54c per share final dividend paid in 2022 – although that was topped up with a special dividend of 25c per share. The final dividend will be paid on January 24.

“Premier has once again delivered for shareholders,” Mr Lew said.

“Premier Retail delivered record results for the year.

“The operating results and continued strength of our balance sheet have allowed the directors to approve a record final dividend of 60c per share, taking full year dividends to 130c per share, up 4 per cent, underscoring our confidence in the strength of the business and its future prospects.”

Last month Premier Investments issued a trading update with guidance for the full year as well as the shock news of the departure of the chief executive of only two years, ex-JB Hi-Fi boss Richard Murray, and revelations that Mr Lew was considering a demerger of the group he founded as a cashbox after the 1987 sharemarket crash.

If a demerger proceeds, some of the best performing retail brands in the country – nightwear chain Peter Alexander and stationery store Smiggle – could be separated from the lower-growth chains such as Just Jeans, Jay Jays and Dotti.

Mr Lew said on Thursday the strategic review was under way and would assist in assessing the optimal future structure for the group, to ensure it is best positioned to maximise growth opportunities for the portfolio of brands.

He said it an update or conclusion on that strategic review was not likely until early 2024, with the company very much focused on the crucial upcoming Christmas trading period.

“The group is focused on the key Christmas trading quarter ahead, noting that results for the first half are always driven by this critical period,” Mr Bryce said.

Shares in Premier Investments ended down 13c, or 0.5 per cent, at $24.58.

3 Oct, 2023
Amazon gains ground on supermarket giants thanks to cash crunch
The Sydney Morning Herald

E-commerce giant Amazon is catching up to supermarket giants Coles and Woolworths in the online grocery market, as cash-strapped Australian households put the brakes on spending.

The latest quarterly consumer survey from investment bank UBS, which tracks the habits of more than 1000 Australian adults, reveals online spending intentions for the next 12 months have weakened and shoppers’ motivation to buy online is fading, particularly when a brand also has bricks-and-mortar stores.

The number of shoppers who said they planned to buy from the online stores of Kmart, Big W, JB Hi-Fi, Target and Myer fell compared with the previous quarter. Online spending intentions overall have also weakened, with the average consumer expecting their spending will fall over the next 12 months.

Despite this, e-commerce giant Amazon appears to have increased its influence in the online grocery market compared with pre-pandemic. The number of shoppers who said Amazon was their primary retailer for buying groceries online increased to 9.4 per cent from 8.9 per cent pre-COVID. The number of shoppers intending to buy from Amazon in the next year also increased compared with the second quarter of 2023.

The number of shoppers saying they primarily shop online at IGA also increased to 3.3 per cent from 2.4 per cent pre-pandemic. Wesfarmers’ troubled e-commerce platform Catch had gains too, with 4.1 per cent of consumers saying the brand was their primary e-commerce grocery retailer, compared with 3.6 per cent before COVID.

Coles and Woolworths continue to dominate the grocery market online and in-store, but the number of shoppers who say they primarily shop online with either of the two major supermarkets has decreased since before COVID-19.

44.7 per cent of consumers said they mainly shop online with Woolies, compared with 45.4 per cent before the pandemic, while at Coles this figure was 28.8 per cent, down from 30.8 per cent.

The numbers come as competition for budget groceries continues to intensify, and Amazon has said it’s seen good traction in its non-perishable grocery categories and for the company’s “subscribe and save” offer for repeat purchases of home and beauty items.

UBS retail analyst Shaun Cousins said in a note to clients on the survey that spending expectations were continuing to moderate thanks to cost pressures.

“Savings expectations have plateaued, with an increase led by high-income earners and stabilisation for middle-income earners, with low-income earners expecting to continue to draw on savings to fund spending,” he said.

Other recent spending data provides more evidence that retailers face a tougher fight for a smaller pool of shoppers’ dollars, with online-only brands facing a potentially tougher battle as households spend less overall.

National household spending data from the Australian Bureau of Statistics (ABS) released last week for July showed a 0.7 per cent fall compared with July last year, while discretionary spending dropped for the fourth straight month to land 3.3 per cent lower for the year.

Home goods and clothing spending had some of the biggest drops, down more than 7 per cent over the year.

ABS data also shows overall online retail turnover dropped by 7.4 per cent for July in seasonally adjusted terms.

The tough conditions have already forced some online-only brands to make tough decisions, such as fashion retailer The Iconic announcing at the end of last month   it was making 72 roles redundant. The business reported softer-than-expected sales last quarter.

Global ratings agency S&P has warned that the cautious consumer presents a challenge for companies’ margins in the near future.

“We expect that companies’ ability to pass through higher wages and other costs, thus preserving earnings margins, will diminish in the next 12 to 18 months,” analyst Richard Timbs said in a note to clients.

3 Oct, 2023
Premier Investments’ retail sales rise as brands recover from Covid-19 impact
Inside Retail

Premier Investments achieved record sales for the full financial year as its businesses recovered from the impacts of the Covid-19 pandemic.

The company booked retail sales of $1.64 billion in FY23, up 9.7 per cent from the previous year. Earnings before interest and tax rose 1.5 per cent to $357.9 million.

Premier Investments said that its Peter Alexander brand witnessed an 11.8 per cent sales increase to $478.9 million, inclusive of a record sales in the week before Christmas and ahead of Mother’s Day during the second half. The brand opened six new stores during the year.

Smiggle’s sales jumped 22.4 per cent to $319.8 million as children returned to schools after closures during the pandemic. Smiggles also signed an agreement with a wholesale partner to open 60 freestanding stores in the UAE, Qatar, Kuwait, Oman, and Bahrain over the next decade.

The company also saw growth in all five of its mainstream apparel brands – Just Jeans, Jay Jays, Portmans, Dotti, and Jacqui E – which collectively generated sales of $844.8 million, up 4.6 per cent.

“Peter Alexander, Smiggle and our apparel brands have all delivered record sales, through the commitment of our global teams and culture of excellence,” said John Bryce, interim CEO at Premier Retail. “Notwithstanding the challenging macroeconomic environment and the cost-of-living pressures faced by the community, our brands are focused on delivering wanted products and value for our customers.

“We maintain a relentless focus on product and channel optimisation whilst working with the board to maximise growth opportunities for each of our brands,” he concluded.

Meanwhile, Premier Investments’ statutory net profit after tax fell 4.9 per cent to $271.1 million, which includes income from its investments in Breville and Myer. Gross profit grew 5.4 per cent to $1.02 billion, while gross margin fell to 62. 2 per cent.

3 Oct, 2023
Australian label Princess Polly opens its first physical store in the US
Inside Retail

Australian fast-fashion brand Princess Polly has expanded in the US opening a flagship store in Los Angeles.

Established in 2005 by husband-and-wife team Wez and Eirin Bryett, the Gold Coast brand sells on-trend women’s clothing for predominantly Gen Z consumers. Since its entry online in 2019, the company says US sales have made up the majority of its revenue.

The new LA store spans 3370sqm and is located at the Westfield Century City shopping centre stocking 200 ‘on-trend styles’.

Alexandria Collis, the brand’s senior director of operations, said: “We decided on Los Angeles because it is a major city and a trend-driven city.”

The company says physical retail expansion is its new business strategy and follows its decision earlier this year when it signed a deal with PacSun to stock its merchandise in-store and online.

“PacSun is our first wholesale partner, and we are thrilled to be working with them,” said Collis. He added the brand is going to “listen” to its customers and scale operations accordingly.

3 Oct, 2023
Australian retail sales record modest growth in August
Inside Retail

Australian retail sales were up only 1.5 per cent year over year to $35.4 billion in August, according to data from the Australian Bureau of Statistics.

The growth was largely driven by sales from the cafes, restaurants, and takeaway industry, which rose 8 per cent, followed by food with a 3.5 per cent increase.

Clothing, footwear and accessories rebounded from a decline in July, up 1.4 per cent in August.

Household goods recorded the biggest decline (down 6.6 per cent), while department stores dropped slightly by 0.6 per cent. Other retailing remained flat with only 0.1 per cent growth.

Most states and territories recorded growth, namely ACT (5.5 per cent), WA (4.0 per cent), NT (2.8 per cent), SA (2.6 per cent), and Victoria (1.9 per cent).

NSW and Queensland were flat, up 0.6 and 0.3 per cent respectively, while Tasmania saw a 1 per cent decrease.

Australian Retailers Association (ARA) CEO Paul Zahra said consistent spending on essentials made retail’s performance in August look more favourable than reality.

“As food sales continue to grow off the back of unavoidable price increases, most other categories are suffering consistent spending declines,” Zahra said.

Retailers, who are also struggling with rising operating costs, will concentrate on offering the best value for budget-driven shoppers as they lead into the Christmas trading period, he added.

National Retail Association deputy CEO Lindsay Carroll said a slowdown in consumer spending before retail season was expected.

“Consumers have experienced a few months of relief with the Reserve Bank’s rates pause but will continue to hold on to every Aussie dollar until the sales hit, in case the honeymoon period ends,” Carroll commented.

3 Oct, 2023
Bondi Sands expands presence on US shores with Walmart launch
Inside FMCG

Australian tanning brand Bondi Sands is expanding its presence in the US market with a nationwide launch in Walmart. This partnership represents the eighth major US retailer to list the brand’s product range within the past six years. 

Walmart will make eight of Bondi Sand’s bestsellers available – in-store and online – including the Self Tanning Foam, Self Tanning Foam 1-Hour Express, Everyday Gradual Tanning Milk, and Self Tan Eraser. 

Through this expansion, the company said it aims to make salon-quality, affordable, vegan, and cruelty-free tanning products accessible to a broader audience.

“We are thrilled to cultivate a new relationship with Walmart and introduce our self-tanning range to a new category of shoppers,” said Blair James, co-founder of Bondi Sands.

“Propelling our global presence with Walmart is an unmatched growth opportunity for us, and we’re excited to offer the beauty consumer what they’re looking for – salon quality tanning products at an affordable price.”

Established in 2012, Bondi Sands offers a range of self-tanning and suncare products. 

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