News

The Smorgon family is mulling options for its Australian fashion retailer General Pants Co, calling in advisers to pitch it to potential new owners.

Street Talk understands General Pants Co’s board, headed by shareholders and Smorgon family members Philip Staub and Peter Edwards, has hired Monash Advisory to test the appetite of rival retailers and private equity firms with experience in the sector.

Sources said Monash had already started approaching potential buyers and was keen to drum up interest to kickstart an auction. Formal documents are yet to be sent to interested parties, sources said.

Should there be an exit for the Smorgons, it would end the family’s long association with General Pants Co. Family patriarch Victor Smorgon stitched up a deal to acquire the business with his granddaughter Jackie Vidor and her husband, Staub, in 1995.

General Pants Co, which for a time also owned Surf Dive & Ski and Jetty Surf, has worked hard to stay in fashion ever since. It is understood the fashion chain’s store numbers peaked at nearly 60 a decade ago, but rationalisation plans have since seen the number drop to closer to 40.

Australian discount department store business Best & Less plans to raise about $72.3 million through an initial public offering at $2.15 a share, according to a term sheet that was sent to potential investors this week.

The retailer aims to list on the Australian Securities Exchange (ASX) in mid-June with a market capitalisation of $271.2 million, or four times its pro forma forecast EBITDA for the 2021 calendar year. 

The IPO caps off a strong period of growth for Best & Less, which operates 246 bricks-and-mortar stores across the Best & Less and Postie chains in Australia and New Zealand, respectively. 

Total sales revenue in the 12 months ended 30 November 2020 was $629 million, with like-for-like sales up 13.5 per cent and online sales rising 80 per cent to $57 million, or 9.1 per cent of total sales. 

Best & Less CEO Rodney Orrock attributed the growth to the business’ focus on value, which gained relevance amidst the economic uncertainty caused by Covid-19.

“While the business was experiencing strong sales before the pandemic, it has provided a strong tailwind as customers increasingly focused on value,” he said in a statement released at the end of 2020, adding that “consumer demand for our proposition of ‘twice the quality at half the price’ is here to stay.”

Best & Less is forecasting a 6 per cent increase in revenue this year to $676 million, despite some forced store closures due to Covid-19. 

Crowded and competitive sector

The majority of Best & Less’ revenue comes from its baby and kids’ categories, which gives it an important point of difference in the crowded and competitive discount department store sector, according to Australian retail expert Gary Mortimer.

“We know that Kmart still appears to be the market leader in relation to sales and profit, but we also can see that Woolworths has really turned around their Big W operation, and of course, we’ve now seen a revitalised Harris Scarfe in the marketplace,” Mortimer, an associate professor of marketing at Queensland University of Technology, told Inside Retail. 

“It is quite a crowded and competitive market, so I think it’s vitally important for Best & Less and really any of the players to clearly differentiate themselves from the group.”

Compared to Kmart and Big W, which have a bigger focus on homewares and general merchandise, Best & Less has a much stronger apparel offer, particularly in the baby and kids’ categories.  

Pointing to the retailer’s recent TVCs, he noted that a key message for Best & Less is the quality of its products given their price, a potential gap in the market following the decline of Target Australia. 

“It’s really positioning them as ‘best’ and ‘less’,” he said. “So best quality and lowest price.”

Wesfarmers’ Catch a sizable competitor

One area where Best & Less could find it hard to compete is online. Despite the launch of click-and-collect in Best & Less stores nationwide last year, Kmart and Target Australia are further ahead in this space, thanks to their parent company Wesfarmers’ acquisition of the nearly $1 billion e-commerce giant Catch Group. 

“The Wesfarmers discount store group model — Catch and Target and Kmart together — really is a sizable competitor to compete against,” Mortimer said. 

“But in saying that it doesn’t mean you can’t differentiate yourself and carve out a niche part of the marketplace.”

Best & Less stores are generally smaller than the likes of Kmart, Big W and Harris Scarfe, which may give the retailer more opportunities to enter different types of shopping centres. 

Allegro to retain majority stake

Best & Less is owned by private equity firm Allegro Funds, which bought the business from Steinhoff International’s Australasian subsidiary Greenlit Brands in November 2019, along with Harris Scarfe and Debenhams. 

Allegro sold Harris Scarfe to the Spotlight Group in April 2020, and the sole Debenhams in Australia closed in early 2020. 

Allegro will retain 70 per cent of its shares in Best & Less through the IPO.

Fashion business Zara has today unveiled it will launch its own cosmetics line, which will be available to buy online and in select Zara stores from 12 May.

‘Zara Beauty’ will be available throughout Australia, New Zealand, Japan, China, South Korea, Europe, the US, Canada and Mexico online, with more regions to come down the line.

The Zara Beauty range will be available to be shopping instore at 22 stores across the world, including Melbourne’s Chadstone Shopping Centre, China’s Wangfujing Avenue and Nanjing East Road stores, Japan’s Musashino Building in Shinjuku, and South Korea’s Kangnam Manseoul building in Seoul.

The offer will include lipsticks, foundations, balms, oils, bronzers, long-lasting nail polish and make up brushes, and will include 130 colours. According to Zara, the initiative aims to cater to each person’s diversity of needs, using the slogan, ‘there is no beauty, only beauties’.

And, as part of Zara’s ongoing commitment to recycling, packaging has been designed for reuse and refill, and makes use of recycled glass.

Parent Company Inditex has previously said that by 2025, 100 per cent of the cotton, linen and polyester used by all eight of its brands will be organic, sustainable or recycled.

Australia’s second-largest retail landlord Vicinity Centres says shoppers are spending more money on each visit to its centres, an early sign of recovery for the nation’s hard-hit shopping malls.

But Vicinity, which owns and manages 60 malls nationwide, said retailers’ confidence is still “fragile” and retail sales for the March quarter were down 7 per cent on the previous corresponding period.

“After a challenging 12 months, we are seeing signs of recovery, with improved centre visitation and retail sales during the quarter. Whilst overall retailer confidence remains fragile, retailers are increasingly committing to new leases versus previous quarters which is encouraging,” chief executive and managing director Grant Kelley said.

Vicinity’s large portfolio includes a half share of Australia’s biggest shopping centre, Chadstone, and Sydney’s prestigious The Strand Arcade.

Mr Kelley said sales across the group’s malls reflected a “subdued but improving retail sales environment.”

While centre visitation is growing, the rate of retail sales improvement was greater.

Consumers are spending more per visit with the average spend increasing 23 per cent in March, a positive lead indicator for continued recovery, he said.

Discount department store sales are up 11.7 per cent, outperforming department store sales which slumped 22.4 per cent over the quarter.

Combined mini-majors and specialty stores reported a 5.7 per cent decline in sales as shoppers’ spending on discretionary goods fell away.

However, total portfolio sales across the group for the March quarter climbed close to pre-COVID levels, down 2.3 per cent relative to the 2019 March period, underpinned by solid supermarket and fresh food sales.

Mr Kelley said a lack of tourists and office workers in CBDs and the risk of further snap lockdowns were weighing on the business.

Most Australian malls stayed open during the pandemic, but shoppers were forced to stay home under lockdown laws, and foot traffic and revenue across the sector plummeted.

The ill-effects were felt most in Vicinity’s Brisbane, Sydney and Melbourne CBD centres.

In March, the number of visitors across the group’s portfolio was 77 per cent of pre-COVID levels but, if CBD centres and the group’s poorer performing Victorian malls are excluded, that figure jumps to 91 per cent.

Importantly for the landlord, it collected more gross rental billings (82 per cent) than in previous quarters.

“With improved trading conditions and as Vicinity moves towards completion of outstanding COVID-19 support agreements, particularly with SME retailers, an improvement in cash collections is expected,” the group said.

Shares in the group traded down slightly, to $1.58, the lowest close in two weeks.

Private equity owned Best & Less Group has made a mums and bubs pitch to equities investors in an effort to secure a $300 million-odd float.

Best & Less kicked off its push at the ASX-boards on Thursday, when stockbrokers Bell Potter and Macquarie Capital sent detailed pre-deal reports to fund managers.

The two brokers took slightly different approaches; Bell Potter’s Sam Haddad went down the mums and their babies route, while Macquarie’s team talked up margin expansion, online sales and sector consolidation.

Both reports revealed a huge turnaround in Best & Less’ financial performance under buyout firm Allegro Funds’ ownership - the question is whether listed equities investors’ own research finds that it’s sustainable.

According to Best & Less’ numbers, the company made $24.5 million in earnings before interest, tax, depreciation and amortisation in the 2019 financial year, when it was still part of the Steinhoff Asia Pacific/Greenlit Brands portfolio.

Allegro swooped in December 2019 – and helped lift Best & Less EBITDA marginally to $27 million by June 2020.

Since then, and in Allegro’s first full year of ownership, there has been a rapid rise. EBITDA for the year to June is forecast to hit $60.7 million, while earnings for the 2021 calendar year are pegged at $62.4 million.

Revenue in 2021 is due to increase a much smaller 6 per cent to $676 million.

It’s a massive turnaround at the EBITDA margin level – even for a private equity owner that’s made a name in restructuring and tidying up struggling businesses.

Bell Potter and Macquarie Capital’s bankers will be talking fund managers through the turnaround in the coming fortnight, before asking for bids. There’s sure to be a healthy amount of scepticism.

Bell Potter analysts valued the group’s equity at up to $386 million and said the retailer’s strength was in baby and kids’ clothes, which accounted for about half of its sales last year.

R.M. Williams CEO Raju Vuppalapati has been appointed by Woolworths Holdings (South Africa) as the new CEO of Country Road Group (CRG). 

The appointment follows former CRG CEO Scott Fyfe's move over to sister business David Jones in October 2020. 

Vuppalapati joins CRG after R.M. Williams was acquired by Andrew 'Twiggy' Forest's investment company Tattarang for $190 million, also in October last year. 

The long-serving CEO is widely credited for the successful brand repositioning and subsequent growth of the R.M. Williams business in his seven-year tenure. 

CRG, which comprises brands Country Road, Mimco, Witchery, Trenery and Politix, is set to benefit from Vuppalapati's leadership, as it rebuilds after suffering blows during COVID lockdowns - especially in Victoria. 

For the first half of FY21 Woolworths Holdings reported that CRG sales over the half declined by 5.2% and by 2.4% in comparable stores. 

However, the business was showing positive signs at the end of the half, delivering strong sales growth of 6.7% in the last six weeks of the period, underpinned by new product ranges, especially in the Country Road brand. 

Speaking on his appointment, Vuppalapati said that he is excited to join the CRG business. 

"I am delighted to be joining Country Road Group and to be working with a portfolio of some of Australia’s most iconic and most loved clothing and lifestyle brands," he told the AFR. 

"It is a great business, and I am looking forward to working closely with the talented CRG team.

"This is an incredibly dynamic time in retail and I am excited by the opportunities ahead," he said. 

There was a time, admittedly some years back, when the only way to shop the latest ranges from the international labels was to jump on a 747 and hit up Paris, New York or London. Invariably by the time they’d reach Australia, they would be old (or sold out and never make it here).

But thanks to online retail and the globalisation of fashion generally, Australian shoppers are now frequently able to access the latest from Gucci and similar labels at the same time as other countries. And some brands are going one step further, curating special collections exclusively for the Australian market.

Saint Laurent is the latest to show the Antipodes some extra love, with a new capsule that will only be available at its Melbourne store from next month. The range – which has been worn by Oscar nominee Carey Mulligan when she hosted Saturday Night Live, as well as model Kaia Gerber and actress-singer Charlotte Gainsbourg – includes a rattan bag, leather jacket and several dresses.

Other brands that have done Australian-exclusive ranges in the past two years include Off_White, Gucci and Alexander McQueen, while others including Bottega Veneta and Fendi have tested retail concepts and other installations in Australia before the rest of the world.

But why? What is special about Australia at this moment that makes it top of mind for the world’s biggest brands and not an afterthought, as has historically been the case?

Eva Galambos, who runs the luxury multi-brand retailer Parlour X in Sydney’s east, suggests it’s a trend that has been building over several years that has been exacerbated due to COVID-19.

“The major global online retailers aggressively targeted our local clientele and won market share, so within a short period of time, almost every major luxury fashion house opened flagship boutiques in the CBD, as well as prime suburban sites like [Melbourne’s] Chadstone and [Sydney’s] Bondi Junction,” she says.

At first, the influx of tourists from China was a major drawcard for brands to invest in their Australian stores but after the borders were slammed shut last year, the rationale has changed as foot traffic is still well down on pre-pandemic levels.

“I suspect luxury brands launching Australian collaborations could be a tactical sales strategy to attract cautious clients back into their boutiques,” Galambos says.

Globally, there are signs that the luxury market is recovering, even as lockdowns (or partial lockdowns) remain in many shopping capitals. In the first quarter of 2021, Hermes reported a 44 per cent jump in revenue compared to last quarter; similar increases were reported at LVMH, which owns Louis Vuitton and Dior, among others (up 32 per cent) and Gucci’s owner, Kering (up 26 per cent).

Even mid-pandemic, some of the luxury brands continued to invest in their Australian stores, as local brands shuttered shops around them. Hermes opened its Sydney flagship last June, while Saint Laurent opened its Melbourne city store in November, just as the city came out of its second, 112-day lockdown. Soon to open in Sydney are new stores for Bally, Valentino, Dolce & Gabbana, Cartier and Chanel.

Michael Whitehead, general manager of Chadstone, says its luxury tenants have ramped up efforts to appeal to Australian customers who traditionally do the bulk of their shopping overseas through VIP products and experiences.

Whitehead said that as international travel remains on hold, he expects luxury brands to continue installing pop-ups to attract customers in real-life. Recent examples include Gucci’s North Face installation, to launch the collaboration between the brands in January, and Louis Vuitton’s pop-up to mark its partnership with the NBA basketball league.

Hiromi Yu, founder and managing director of Melbourne luxury retailer Marais, says Australia has been a consistently top performing country for the past five years, so naturally, brands are paying it more attention.

Post pandemic, Yu says Melbourne’s foot traffic has increased about 33 per cent week-on-week. Sydney has been slower to recover, though he says it should improve by mid-May as a greater share of workers return to the office.

They might not have the blood, sweat and tears of Nine’s reality show The Block, but Bunnings’ home renovation videos are attracting millions of viewers to its website and YouTube channel and inspiring a new generation of DIYers.

Bunnings is filming the fourth series of a home renovation show that has helped Australia’s largest home improvement retailer boost sales by inspiring customers to undertake minor and not-so-minor DIY projects in their houses and gardens.

Two years ago, Bunnings bought and renovated a home in the Melbourne suburb of Knoxfield to create fresh DIY content for its website and YouTube channel. The home was also used to create a TV series, Make It Yours, which aired on the Seven Network.

It still owns the Knoxfield property but sold two other properties renovated in previous seasons soon after filming finished.

This year, Bunnings is renovating the homes of Bunnings staff, transforming different rooms and gardens in several houses, rather than renovating a single home, showing customers how to transform their living spaces.

This week, for example, it was filming segments on updating laundries and refreshing kitchens, with the episodes to be released in June and July.

Almost all the tradies who appear in the videos are Bunnings staff, chosen based on their experience in areas such as carpentry, painting, horticulture and landscaping.

Bunnings said the videos were not aimed at selling specific products – brand names are rarely mentioned – but inspiring customers to do their own renovations, show how easily it can be done and what an impact it can have.

The content complements in-store advice, how-to videos on the Bunnings website and an online DIY and gardening community known as Bunnings Workshop.

The videos and DIY hub show customers how to undertake projects such as laying turf, installing outdoor garden lighting and pop-up sprinklers, paint and tile bathrooms, make simple furniture, and design and update kitchens, by for example, installing new handles or painting laminate cupboards.

“Creating great content that makes DIY easier for customers is a huge focus for us,” said Bunnings managing director Mike Schneider.

“We have created hundreds of how-to articles and videos for customers, covering everything from hanging a picture to building a deck and everything in between,” he said.

”Like our in-store experience, expert team members provide the advice and they are the face of our videos. It’s a natural extension to the in-store experience.”

Mr Schneider said that while the products featured in the videos were available in Bunnings stores, the retailer did not view the content as product advertising.

”What we’re trying to do is inspire and make DIY accessible with entertaining and informative story telling,” he said.

“A lot of our content is about showing customers how to tackle a project step by step, and that gives them the confidence to try it themselves.”

“Customers tell us mastering one project gives them confidence and motivates them to try another one. And that’s great for customers and for us.”

Bunnings has now created more than 750 how-to videos to date for its website and YouTube channel.

The investment is paying off in spades. Bunnings’ sales rose a staggering 24 per cent to $9.1 billion in the six months ended December 31, with same-store sales up almost 25 per cent, while earnings jumped 36 per cent to $1.3 billion.

Sales growth was particularly strong in categories such as paint, lighting, garden and outdoor living as people stuck at home during the pandemic and unable to travel overseas invested in upgrading their homes.

Bunnings declined to say if there was a spike in sales of products used in some of the videos – such as paint spray guns or modular decking – but its research showed customers were inspired by the videos and undertook similar renovations.

Bunnings would not disclose how much it spends on making the content, which is part of its growing annual marketing budget.

Mr Schneider said the content helped the 135-year-old retailer stay relevant with younger customers who might start their DIY project researching on mobile devices rather than in stores.

“We want to be an online destination and a starting point for younger customers,” he said. “Over the past 18 months we’ve really increased the amount of content that is geared toward younger people starting out on their DIY journey.”

For the current Make It Yours series, Bunnings has linked up with influencers such as interior designer Lucy Glade-Wright, the founder of online publication Hunting for George, DIY “extraordinaires” Az and Jamie from Haus of Cruze, DIY style queen Geneva Vanderzeil and organisational guru and YouTube star Rachel Lee.

“Catering to this younger audience with great content will continue to be a big focus for us,” Mr Schneider said.

Before COVID-19, Bunnings’ online how-to content attracted about 700,000 visits to the DIY advice hub on the Bunnings website each month.

As Australians spent more time at home, the number of visits to the DIY hub jumped to 1.8 million a month in March and April last year and remained strong throughout 2020, with more than a million visits each month, including a second peak in November when visits reached 1.6 million.

The demand for DIY content mirrors the growth in visitors to the Bunnings website.

The Bunnings website attracted on average 13 million visits a month in 2017 and 15 million a month in 2018, even though the retailer did not have an online store at that stage.

In 2019, website visits rose to an average of 19 million a month, boosted by the launch of a fully transactional e-commerce site and marketplace.

In 2020, website visits grew to more than 30 million a month and the level of interest had remained strong into 2021, a spokesman said, auguring well for another bumper year.

Mosaic Brands is investing heavily into its retail team, launching The Mosaic Academy. 

The training program will kick-off later this month and will be delivered through Mosaic's online learning platform. 

The Mosaic Academy will focus on retail service, sales and management and will offer team members the opportunity to gain a nationally recognised qualification in either Certificate III or Certificate IV in Retail. 

Speaking on the initiative, Mosaic Brands CEO Scott Evans said that the program streamlines training and will help to attract new talent to the business. 

"Our Mosaic Academy program is about offering our team the opportunity to inspire and motivate each other while gaining new skills, no matter where they are located, or if they’re part-time or permanent. 

"Our investment in the academy means on-the-job training and development can be delivered across one of the largest fashion retail networks in Australia simply and efficiently.

"The Academy is both a way of recognising and developing the exceptional talent we have within the organisation, along with attracting new team members to our brands," he said. 

The launch of the program follows internal expressions of interest, which saw over 350 team members indicate their interest in the opportunity to strengthen their skillset and qualifications.

Mosaic is now looking to offer traineeships to these team members across its nine brands in the first 12 months of the academy’s operations. 

The Mosaic Academy's retail certificates will be specifically tailored to Mosaic Brands.  

Munro Footwear Group tells the story of its founder, Graham Munro, who is celebrating 70 years in the footwear industry.  

For Graham Munro, leaving school to pursue a career in business was always his ambition.

Earning a scholarship to the Myer business training program in 1951, that same year saw him transferred to the footwear department.

He’s been in the footwear industry ever since.

Over his eight valuable years at the Myer Emporium, Munro reflects on the early waves of globalisation.

"As interesting new international products started coming into the country, luckily for me, Myer didn’t know that a raffia sandal with a cork unit sole was actually a sandal," he chuckles, "so they ended up in my slipper department.

"This department went on to become the most successful on the floor in its first season thanks to those very fashionable slippers."

By 1959, Munro’s keen entrepreneurship landed him a sales role with footwear agents Clark & Coventry in Clifton Hill, with founder Nathan Clark, creator of the iconic Clarks desert boot.

Melbourne was a footwear manufacturing hub then, with Abbotsford, Collingwood, Fitzroy and Clifton Hill home to almost five hundred shoe factories, tanneries and suppliers.

"I can still drive down Hoddle Street and point out the original shoe factories," Munro added. 

Identifying a gap in the market for teenage girls, Munro ventured into design and manufacturing, introducing the Gamins brand in 1962.

"Back then, the options for 15–17-year-old girls were limited to their brown, T-bar school shoes, or shoes stolen from the bottom of their mother’s wardrobe."

The brand was hugely successful, stocked in retailers across Australia.

By the 1970s, decreased government protection for the textile, clothing and footwear manufacturing industries and increased importation decimated Australian footwear manufacturers to the point where there were only a handful left.

"We continued manufacturing long after most of our competitors had given up, an approach that caught up with us by the late 90s when we lost just about everything.

"Those last few years were very painful," he said. 

In the early 2000s, the business saw a successful resurgence as an importer and wholesaler, a move that Munro credits almost entirely to his wife, Kerrie, and formed the foundation of the successful retail and wholesale business we see today.

Reflecting on the various evolutions of the business over seven decades, Munro attributes the importance of relationships as one of the keys to his success.

"We received tremendous support from previous partners when we reimagined our business.

"We’d done the right thing by them in the past, and they wanted to do the same by us," he said. 

Munro’s advice to future entrepreneurs?

"It’s all about the people, your team and your customers. Don’t focus on the past, and don’t focus on what can’t be done.

"We’ve always experimented.

"Some might have considered these approaches hairbrained, for instance when we took on Styletread, but these experiments have led to some amazing results," he said. 

From humble beginnings with his family once living above their factory in Abbotsford, lacing moccasins together until all hours to save a few dollars, to now a $300 million business, Munro is satisfied cheering on from the sidelines these days.

"I’m still involved with styling and sampling processes every season and keeping a watchful eye over daily sales."

Munro Footwear Group enjoys continued success as Australia’s largest privately-owned footwear company.

From its roots in manufacturing, the business today has hundreds of stores, designing and developing over 80% of its products out of a sourcing and manufacturing network that spans more than 20 countries.

Seafolly has announced its new global ambassador, Australian model, beauty entrepreneur and philanthropist Lara Worthington.

The news comes as the swimwear label executes its comeback strategy after falling and re-emerging from administration in 2020. 

Speaking on the comeback strategy in 2020, Seafolly CEO Brendan Santamaria said that the goal was to revamp the brand and expand it further. 

"Now is the time to shake things up at Seafolly and I see real opportunity for Seafolly to emerge post voluntary administration (VA) as one of the world’s most iconic swimwear and beach lifestyle brands.

"To date the brand has established and nurtured a global loyal customer following especially here in Australia.

"Our goal is to grow this customer base further and set the brand back on its trajectory to global success, together with our partners," he said. 

Helping to achieve this aim is Worthington, whose ambassadorship announcement is one of the biggest the brand has made since emerging from VA. 

Worthington joins a high-profile line-up of former Seafolly ambassadors including Gigi Hadid, Miranda Kerr and Jessica Hart, and begins her ambassadorship with the 'Always Seafolly' campaign. 

According to Seafolly's head of marketing Victoria Taylor, the campaign aims to empower women to #FeelThatWay always - a message which Worthington embodies, Taylor said. 

"Lara illuminates how our latest collections can be uniquely styled to suit individual personalities and lifestyles, showcasing that being yourself, being comfortable and looking stylish are not mutually exclusive. 

"Lara is a remarkable talent and there is no denying her down to earth nature and love for the beach will resonate with our customers. 

"When we first approached her about a partnership, we were drawn to her confidence and passion for wellness as much as her love for Australia and the beach.

"She loves to express herself through style and is a constant inspiration to her fans on living a fulfilling lifestyle.

"It’s that authenticity and unapologetic spirit that we admire, and we are thrilled to welcome her to the Seafolly family," she said. 

The campaign will be communicated across Seafolly and Worthington's channels, which include sizeable audiences of 523,000 and 746,000 Instagram followers respectively. 

This season, Seafolly has introduced ‘Seafolly Originals,’ a collection of loungewear featuring embroidery of the heritage Seafolly logo, available in Lilac, Beige, True Navy, Thyme, White and Black.

The business has also welcomed a new line of knitwear and ready-to-wear pieces that help Aussies transition between the seasons.

Meanwhile, Seafolly is also furthering its journey towards greater sustainability, focusing on using fabrics made with recycled yarns to create mindful products.

Worthington will appear in worldwide campaigns across a range of channels until October 2021. 

Seafolly is sold in over 1,600 doors in 51 countries, through its retail stores, eCommerce site, leading retailers and major online sites.

There are 25 Seafolly stores (21 in Australia and 4 in Singapore) and the company ships to Australia, Singapore and the US through its own eCommerce site.

Industrial landlords are on track for another record-breaking year after around 1 million square metres of warehouse space was leased during the first quarter of 2021, most of it in Sydney and Melbourne.

Last year, a record 3.2 million square metres of warehousing was leased, with the boom fuelled by the acceleration of online shopping and e-commerce during the pandemic.

If the current pace of deals is maintained, around 4 million square metres of warehouse space will be leased by the end of the year.

According to Colliers, which compiled the latest figures, more than half of all leasing deals completed in the first quarter were in the transport, logistics and retail sectors.

Driving the activity in 2021 has been the continued growth in e-commerce and as companies look to streamline and automate their supply chains in larger, more efficient and better located warehouses to ensure speedy delivery of goods to customers.

A big American private equity firm has come calling for Australian grown and owned streetwear clothing and sneakers retailer Culture Kings.

Street Talk can reveal Culture Kings’ founder, 36-year-old Queenslander Simon Beard, is in late-stage talks to sell a half share in his business to Boston-based Summit Partners and its fashion retail brands investment company, a.k.a. Brands.

Industry sources offshore said the deal would value Culture Kings at more than $600 million, which would make it the biggest ever private sale in Australia’s retail and apparel sector.

Beard, who founded the business with his wife Tahnee with one store on the Gold Coast more than a decade ago, is expected to continue to run Culture Kings under private equity ownership, and remain heavily invested.

He is understood to be a big reason why Summit Partners is attracted to Culture Kings and thinks it can turn it into a global success story. Beard paid $30,000 for a struggling Miami-based boutique, Culture Kings, through which he bought sneakers and re-sold them in Australia. He opened his first store on the Gold Coast in 2008.

Sydney is to invest $43.5 million converting the city’s downtown retail destination George Street into what it hopes will become a ‘world-class pedestrian boulevard’. 

The project will include new green space and street furniture, wider footpaths, and outdoor dining areas. Already a 9000sqm car-free area is already underway, spanning from the George Street light rail route from Town Hall down to Railway Square.

In a separate move, a new public space will be created on Devonshire Street between Chalmers and Elizabeth streets in Surry Hills, with construction scheduled to start next year. 

“We’ve loved seeing people reclaim George Street south while the temporary road closure measures have been in place,” said Lord Mayor Clover Moore. “Now we want to make these measures permanent, giving people more space to window shop, dine and walk while maintaining physical distancing.”

The famous street is home to various retail stores and dining venues, including the new premium IGA Locali grocer, the city’s Apple flagship and a giant Mecca store. New stores are set to open on George Street later this year, including the country’s largest Lululemon store and a flagship for Swiss luxury brand Bally. 

“We are working closely with businesses to minimise disruption,” Moore added. “Extending this public space with permanent, quality infrastructure will make the whole area more appealing for workers, visitors, residents and local businesses, and encourage walking through the centre of our city.”

Supported by all levels of government, the project will receive $7.05 million from the Australian government for the part between Bathurst and Goulburn Streets, and $1 million from the NSW government for the overall works. 

Carla Zampatti’s eldest daughter said her mum would have called it the best-dressed funeral she’d ever been to.

The iconic fashion designer was farewelled in a state funeral on Thursday morning at Sydney’s St Mary’s Cathedral before a capacity congregation of more than 1200 mourners.

Former foreign affairs minister Julie Bishop was elegant in the Velvet Feathered Stunner Dress in deep navy from the Autumn ’21 collection. Zampatti’s eldest daughter, Allegra Spender, wore the same style in black.

Former governor-general Dame Quentin Bryce went for the blue Celebration Caped Sleeve Dress (also Autumn ’21), while Carnival Corporation director Katie Lahey paid tribute in a well-cut timeless pair of the designer’s black trousers.

Sydney businesswoman Wendy McCarthy cut loose in a midnight-blue satin blazer and pants suit from the designer’s 2019 collection, which she had worn that year to meet Michelle Obama in Singapore.

Jewelry retailer Michael Hill has followed up its “outstanding” performance in the first half with a strong third quarter. Same store sales rose 16.4 per cent, while group margin increased by more than 200 basis points, during the period.

Digital sales, too, saw strong growth – up 69.2 per cent year-on-year, and 93.3 per cent year-to-date.

“I’m delighted by these results, delivering further margin improvement and double-digit sales growth in all markets,” said chief executive Daniel Bracken.

“Our strategic growth agenda underpins this performance as we accelerate digital innovation, embrace new ways to shop and elevate our brand.”

The impact of Covid-19, however, continued to be felt during the quarter. In Australia the business lost 332 trading days due to the closure of 14 Queensland, 36 Victorian and 22 Western Australian shops.

Likewise, operations in New Zealand were down 160 trading days, with 16 Auckland stores shuttered during the city’s lockdown.

Comparatively, the business’ Canadian operations had it much worse, losing 2,364 trading days due to 46 closed stores.

“Considering the ongoing challenges of navigating Covid-19, particularly in Canada, this result demonstrates the resilience of the Michael Hill business and further validates our transformation to a modern, differentiated, omni-channel jewelry brand,” Bracken said.

The Wesfarmers-owned hardware chain Bunnings has acquired Australia’s largest tile retailer, Beaumont Tiles, ending 61 years of the group’s family ownership.

Bunnings managing director Mike Schneider said the group would run Beaumont Tiles as a standalone business, separate to its chain of Bunnings stores nationwide. Beaumont Tiles has 115 retail stores around Australia and also runs large distribution centres in Sydney, Melbourne, Brisbane and Adelaide.

Bunnings operates 380 hardware outlets, most of them in the “big box” warehouse format, and will need approval from the Australian Competition and Consumer Commission (ACCC) for the acquisition. Bunnings has a substantial range of tiles in its own stores.

“The acquisition represents an opportunity to build on the success of the Beaumont Tiles business and invest in its future growth,” Mr Schneider said.

Beaumont Tiles services both trade customers and householders.

He said there were opportunities for strong growth in the segment. Home renovations are booming in the COVID-19 pandemic with overseas travel off the agenda and ultra-low interest rates fuelling spending on houses and apartments.

Bunnings’ sales rose a staggering 24 per cent to $9.1 billion in the six months ended December 31, with same-store sales climbing almost 25 per cent, while earnings jumped 36 per cent to $1.3 billion.

Beaumont Tiles executive chairman Bob Beaumont said the sale to an Australian company with strong values and a similar culture was a good outcome.

“After 53 years dedicated to a business that my dad started in South Australia, it’s time to retire,” Mr Beaumont said.

He said it had been a difficult decision to sell. The purchase price wasn’t disclosed. The Beaumont business began in 1960 when Mr Beaumont’s father started selling tiles to builders from a garage next to the family home in Adelaide.

Chief executive Danny Casey will remain at the helm of Beaumont Tiles and its national support office will stay in Adelaide.

Bunnings went through an arduous regulatory process for a previous acquisition of a standalone business in South Australia called Adelaide Tools, and finally gained approval last year for the bolt-on acquisition a year ago. The ACCC initially raised concerns about the impact on competition. Adelaide Tools has five stores, all in South Australia.

Lovisa has bolstered its support team in both its Melbourne and Germany headquarters as it readies to expand further across Europe following its acquisition of the Beeline retail business in November 2020.

The Australian jewellery retailer will enter Germany, Switzerland, Netherlands, Belgium, Luxembourg and Austria for the first time when the deal finalises in May 2021.

Of Beeline’s 114 locations, Lovisa will convert and open approximately 90 stores, with the remainder already closed or to be shuttered after completion.

MD Shane Fallscheer welcomed the expansion.

"We are very excited that this transaction gives us the opportunity to add six new countries to our global store network and provides us with a strong base and quality team to grow the Lovisa brand further in these markets and into the future." 

Lovisa will also launch local eCommerce sites in Q4 to support its new bricks-and-mortar stores, trading the websites in local currency and languages.

Lovisa welcomed the Beeline business with €11.8 million of cash in the business at handover, after paying only €70 (70 Euros) for the shares in Beeline.

The acquisition was cash-flow positive immediately, with the acquired cash offsetting €6 million in implementation costs and aggregate capex and working capital investment.

Tommy Hilfiger has launched a brand new 2,385 square-foot store in the Chatswood Chase shopping centre, bringing the brand’s global store concept to Sydney.

The new store fuses the brand’s heritage offer with “clean, modern” finishes and a bright aesthetic, while also taking into account the current retail environment – pandemic precautionary measures have been implemented around the store to ensure adequate social distancing and safety for all staff and customers.

The store showcases the latest Tommy Hilfiger collections, such as Fall 2020 and Spring 2021, which bring together sportswear, jeans, accessories, footwear and underwear for both men and women.

The launch is part of a larger expansion into Australia, as Hilfiger himself hinted at in 2019.

“We’re really energising our brand, we’re expanding our brand worldwide but here in Australia, we have a very large and growing fan base, so we’re bringing all the latest product here – a lot of new Tommy Jeans styles, a lot of new accessories footwear, all the new fashion from collaborations with Lewis Hamilton and Zendaya,” Hilfiger said.

“We’re really energising the brand in terms of opening new stores and really bringing the people in Australia the same exact energy and product that we have in Europe, the US and other parts of the world.”

The new owners of collapsed discount department chain Harris Scarfe are planning to open 50 new stores of the once-struggling chain in the next five years, despite increasingly staunch competition from corporate competitors Target and Big W.

In an interview with The Age and The Sydney Morning Herald, Spotlight Group executive deputy chairman and rich lister Zac Fried said the company had been very pleased with Harris Scarfe’s performance in the retailer’s portfolio, which also includes fabric retailer Spotlight and outdoors merchant Anaconda.

“Harris Scarfe is well on its way to its former glory, and we’re very happy with its performance to date,” he said. “Like Spotlight and Anaconda, we’re hoping it’ll be part of the business for many many years to come.”

Multibillion-dollar retail giant Spotlight Group is Harris Scarfe’s fourth owner in the past seven years, with the brand owned by South African retailer Greenlit until mid-2019 when it was acquired by private equity firm Allegro. Months later, it entered administration before being bought by Spotlight last March.

Mr Fried said since acquiring the business, Spotlight had been undertaking a full revitalisation of the brand, including re-educating staff, refreshing IT systems and improving the company’s marketing.

“We’re just about to sign off on a fairly large capex in the multimillion-dollar range to redo all the existing stores,” he said. “So that’s getting the signage up to date, tweaking store designs, and lifting Harris Scarfe up to the same level as Spotlight and Anaconda.”

With this revamp underway, Mr Fried - who runs the Spotlight Group alongside his uncle Morry Fraid - has now set his sights on opening new locations.

“There’s going to be a lot of growth there, we want to get it back to 100 stores fairly quickly,” Mr Fried said. “We don’t have to rush to do it over 12 months, it can happen over a five-year period, but we’re going to do it pretty quickly.”