News

Department store Myer has bolstered its management team, appointing a new head of media and general manager of marketing.

Gemma Hunter will take up the role of leading Myer’s marketing team, bringing more than twenty years of experience to the role. 

Hunter comes from almost ten years as executive creative director at advertising firm MediaCom, where she led content strategy, creative, production, SEO, social, and data analytics teams. 

“Myer is a loved and respected brand, and I can’t wait to join the inspiring team,” Hunter said. 

“To be a driving force in the work that is underway, reigniting passion in the brand by focusing on customer experience and emotive storytelling is a once in a lifetime opportunity.”

Additionally, Aaron Achurch joins the Myer team has its new head of media, bringing 15 years of experience in media teams at businesses such as Diageo, Bankwest, Vodafone, and the Australian Rugby Union.

Both Achurch and Hunter will report to Myer chief customer officer Geoff Ikin. 

“I can’t wait to be part of the journey that Myer is on, and I believe there is enormous potential through their advertising and communications to show to the Australian community the positive changes that are underway with the addition of new brands, offers and experiences that you will only get at Myer,” Achurch said.

The department store chain has been rebuilding its management team since it axed around eighty store management and support teams earlier in the year – including Hunter’s predecessor Andrew Egan. 

“With the key appointments of Gemma and Aaron to these roles we are bolstering our marketing and communications capability,” Ikin said. 

“The experience that Gemma and Aaron will bring to these roles will be instrumental in delivering the work that is underway to re-engage with our customer, putting them firmly at the heart of all that we do.”

Zara-owner Inditex saw record revenue and profits during the first half of FY19, though flat gross margin caused share prices to dip.

Net sales rose 7 per cent year on year to €12.82 billion ($20.6 billion), while net profit rose 10 per cent to €1.55 billion ($2.5 billion).

According to Inditex executive chairman Pablo Isla, the results reflected strong first half performance, with like-for-like growth across all brands and geographies.

“The investments we have made in the stores as well as in logistics and technology have been key elements in the development of our customer focused integrated online and offline store platform,” Isla said. 

However, gross margin stayed steady at 56.8 per cent, up from 56.7 per cent. As a result, shares fell from a high of €28.59 per share ($46 per share) on the 10th, to a low of €26.97 ($43.48 per share) per share on the 12th.

According to Isla, the business works to maintain gross margin, rather than maximise it.

“We are always thinking about the medium and the long-term evolution of the company,” Isla told analysts. 

“Gross margin is a combination of many different things. You have, of course, the like-for-likes as growth. You have the product mix. You have the fashion trends. You have currencies. You have raw material costs. There are many, many elements involved.”

The business noted it opened, enlarged and refurbished stores across all geographies during the half, and continued to expand its online platform into new markets – seeing 7,420 stores open across 96 markets, with 62 sporting the group’s online platform.

During the beginning of its second half, Inditex has seen sales in local currencies increase 8 per cent for the period between 1 August and 8 September. 

The business expects like-for-like sales growth of between four and six per cent in FY19. 

Pioneering online beauty retailer Adore Beauty is expanding in Australia and overseas after founder and Young Rich lister Kate Morris sold a 60 per cent stake to Quadrant Private Equity.

Ms Morris started selling beauty products from the garage of her Melbourne home 20 years ago, when e-commerce was in its infancy, and with the help of husband James Height has built Adore into Australia's leading online beauty platform.

Sales have grown six-fold in four years - from $16 million in 2016 to an annual run rate of more than $100 million in 2020 - as Adore took share from bricks-and-mortar retailers such as Myer and David Jones.

But for Adore to achieve its ambitious growth plans the company needed to bring in external investors after buying back a 25 per cent stake acquired by Woolworths four years ago.

After six months of talks led by KPMG, Ms Morris and Mr Height have agreed to sell a 60 per cent stake in Adore to Quadrant's new $400 million growth fund.

Ms Morris, 40, was understandably apprehensive about selling control of her baby to private equity investors.

"I've had this business 19 years and I don't think I could have parted with any of it for someone I didn't really trust," Ms Morris told The Australian Financial Review on Monday.

Before agreeing to the deal, Ms Morris spoke to other business owners who have teamed up with Quadrant, whose previous investments have included Kathmandu, Burson, QSR Holdings, Amart and Barbecues Galore.

"Finding a partner who was going to respect the culture and values that have enabled Adore to deliver the results that it's delivered and is part of what makes us special ... was super important," she said.

"All the founders I spoke to had had a positive experience and said it was something they would do again and if we had the opportunity to work with Quadrant we should do it."

Ms Morris and Mr Height are selling down a portion of their 100 per cent interest, and Quadrant is investing additional capital to accelerate the company's growth.

Adore, which sells more than 220 beauty brands, plans to expand into new verticals such as fragrance, ramp up marketing to attract new customers and invest in technology and content to improve customer engagement.

"Consumers are more engaged with the category than they have ever been and looking for more information and education - the information we've been able to provide as a brand-agnostic retailer seems to be really resonating with consumers," Ms Morris said.

"We're acquiring more and more customers, and the customers we have are spending more with us every year."

After entering the New Zealand market two months ago, Adore plans to take advantage of strong interest from international customers, which accounts for about 45 per cent of site traffic, and explore expansion into Asia, adapting its site to include localised content, brands and currencies.

"We have so many international consumers coming to our site for the content it kind of makes sense to sell them something at some point," she said.

The sale price was not disclosed. But based on average valuations for e-commerce businesses of about 1.1 to 1.2 times revenues, Adore is estimated to be worth more than $110 million, valuing Quadrant's 60 per cent stake at more than $60 million.

Quadrant managing director Justin Ryan, partner Simon Pither and investment associate Youngsoo Kim will join the Adore Board.

The Adore stake is Quadrant's first pure-play online retail investment and the third this month founded by a woman.

"It's different to what we've done in the past - we've done a lot of consumer work and in bricks and mortar - but we all agree the future is in e-commerce and we really like what Kate and James have done," Mr Ryan said.

"They've built an unbelievable culture, it's a big market and they've carved out a nice niche - I think it has a very exciting future," he said.

Earlier this month Quadrant agreed to buy majority stakes in Love To Dream, which designs baby swaddles and sleepwear, and ModiBodi, which makes leak-proof apparel, underwear and swimwear.

Quadrant's exit options include an initial public offering, trade sale or sale to another private equity fund.

Ms Morris, who debuted on The Financial Review Young Rich List last year with an estimated wealth of $30 million, has not ruled out selling her entire stake in the future.

"Every business at some point is either sold or wound down so that's a potential outcome at some point ... right now I'm super excited about the growth that we have ahead of us - it's so much fun at the moment."

NEW YORK (AP) — Nordstrom opened a new store in Manhattan on Thursday — without any merchandise.

Instead, the store offers services like tailoring and allows customers to pick up or return items, including online orders from any retailer.

The push to open these local hubs comes as Nordstrom, like many department stores, is trying to reinvent itself as it sees customers shopping more online.

“We believe this is our model for the future,” said Erik Nordstrom, the retailer’s co-president. “So we have to figure it out and tweak it. The more we engage our customers, the better it is.”

The Upper East Side location is the first Nordstrom “mini store” in New York. The company opened three others in Los Angeles and plans another one in New York’s West Village later this month. The company’s co-president declined to say how many Nordstrom will open in total.

Last month, retailer trimmed its earnings and sales outlook for the current fiscal year after it reported profit and sales declines in the second quarter. Sales at its full-priced stores dropped 6.5%.

At the Nordstrom mini stores, which average about 2,000 square feet, customers can get fittings and alterations from tailors on the premise, even if they buy their clothes elsewhere. The stores will also accept not only returns of items purchased at Nordstrom but from any online retailer. Customers bring the packaged items, with or without the pre-printed labels, and a salesperson will ship them out. There is no service fee.

Each local store is tailored to the neighborhood it’s in. For example, the Los Angeles stores offer manicures while the Manhattan Upper East Side store has an area where parents can drop off their baby strollers to be cleaned for a fee.

Nordstrom told The Associated Press that the local strategy focuses on gaining share in the company’s most important markets by making its customers more engaged through the services it offers. The retailer has said its business is highly concentrated in its top markets, with the top 10 accounting for 60% of its overall sales.

So far, Nordstrom is seeing success with its local stores in Los Angeles. Customers spend two and a half times more on average. In addition, product returns are coming in eight days faster than usual, giving Nordstrom a better chance at reselling them.

Heritage boot brand RM Williams has revealed plans to open 18 new stores in the US and UK, more than doubling its current international store footprint amidst ongoing talks of a sale.

The expansion, reported in the Financial Times on Tuesday, is expected to help the Australian brand double its sales to $300 million within the next five years. 

As part of this push, RM Williams in March appointed Hugh Jackman as its first global boot ambassador. The A-list celebrity, who also holds a 5 per cent stake in the company, was the face of the brand's Undeniable Character campaign that launched globally in April and focused on the craftsmanship of RM Williams’ $600 boots. 

Founded in 1932 in South Australia by Reginald Murray Williams, RM Williams still makes its boots by hand from a single piece of leather in a factory in Adelaide. 

According to Queensland University of Technology professor Gary Mortimer, this heritage presents a strong point of difference for the company, especially as its owner L Catterton Asia pursues a sale through Goldman Sachs. 

“Having a strong brand — the intellectual and intangible property of a company — is of great value to businesses today,” he told the Financial Times.. 

L Catterton Asia, a private equity firm associated with the luxury conglomerate LVMH, acquired a majority stake in RM Williams in 2014 and has invested in growing the brand both in Australia, where it launched an e-commerce site, and overseas. 

“While everyone else is restructuring and laying off people, we are hiring,” Raju Vuppalapati, RM Williams’ CEO, told the Financial Times. “The brand is ready to take its next big leap.” 

RM Williams declined to provide further comment on its expansion plans. 

RM Williams has bricks-and-mortar stores in Australia, New Zealand, the US, the UK and Denmark, and sells through retail partners in these and other countries. 

It reportedly saw revenue growth of 11 per cent to $155 million in FY19, and earnings before interest, tax, depreciation and amortisation growth of 46 per cent to $23 million, according to the Financial Times.

Melbourne-based online furniture brand Brosa has opened its first bricks-and-mortar showroom to the public, following in the footsteps of e-commerce pioneers, such as Warby Parker and Bonobos, that have gone offline to grow their business and allow customers to touch and feel the product. 

The showroom, located amidst a cluster of furniture retailers including Great Dane and Matt Blatt on Johnston Street in Melbourne’s Fitzroy neighbourhood, features a curated range of living room, dining, bedroom and outdoor furniture sourced from the brand’s network of global ‘makers’. 

Each piece is tagged with a QR code, so customers can look up specific details about the product on their smartphone, and so Brosa can keep track of which items are trending in-store and swap out less popular products. There is also a touchscreen showing a live feed of the products people are looking at online, and digital ‘mood boards’ where customers can see what different products look like together. 

Interior designers are on hand to guide customers through the showroom, give styling advice and, for those who opt-in, provide value-add services, such as 3D visualisations of redecorated rooms in their home. 

“It’s a culmination of retail as it should be,” Ivan Lim, Brosa’s founder and CEO, told Inside Retail Weekly. 

Brosa has tested this concept over the past two years with appointment-only showrooms in Melbourne, where the business is based, and Alexandria in Sydney. 

But the new showroom, called Studio+, allows the retailer to scale up the experience and reach a new demographic of offline shoppers who have never heard of the brand before. 

“The other showroom was hard because people were getting in each other’s way [and] you could only take one or two appointments,” Lim said. 

“I think there’s a real opportunity here for us to make it a hub for customers to experience the brand,” he said about Studio+. 

“We’ve talked about doing workshops and collaborating with other brands.” 

Tapping into industry experience 

Lim started Brosa, which means ‘smile’ in Icelandic, in 2014 to provide designer furniture at an affordable price point. The business works directly with manufacturers – whose faces and stories are featured across its website and showroom – cutting out the middleman and associated markup. 

Over the past five years, Brosa has raised $8 million from investors including AirTree Ventures and Bailador, which it has put into its underlying technology, building up a team of delivery trucks and drivers and making several key hires. 

The business last February appointed Flipkart’s former head of private label Rushabh Sanghavi as its chief merchandising officer. While at Flipkart, Sanghavi was responsible for building up the company’s entire furniture private label supply chain from scratch. 

And in July, Anna Stockley, former head of marketing and online at cosmetics retailer Mecca, joined Brosa as COO. Before Mecca, Stockley worked at US online fashion brand Bonobos, where she was responsible for rolling out its bricks-and-mortar showroom strategy. 

At the same time, Brosa has been improving its backend technology and operations to enable many of the digital integrations in the new showroom, and to handle the growth it is anticipating off the back of it. 

As a ‘digital-first’ business, Brosa builds its technology in-house, a key differentiator between Brosa and most other furniture players in Australia, according to Stockley. 

“Coming from a bricks-and-mortar business, it’s just jaw-dropping to me what we can do; the ease with which you can then respond to the customer’s needs,” she told Inside Retail Weekly. 

“Other categories have been disrupted. We’ve got fantastic apparel players like The Iconic. But the furniture sector hasn’t had that player. We’re it.” 

Mr Gutman who founded Assembly after Westfield was taken over by Unibail Rodamco last year has hired ex-Invesco and Corval's Tim Meurer to head up the search for investment opportunities for the fund.

After this initial round of capital raising, the fund will raise another $150 million from local and foreign high net worth family offices and institutional investors in the next one to two years to reach $300 million, demonstrating there is plenty of liquidity in the market for real estate deals.

With a planned leverage of 40 per cent, the fund will have a total of $450 million to allocate.

It had already struck a preferential equity and senior debt deal for two mixed-use residential projects in Sydney and Melbourne, and was prepared to look at emerging and alternative investment opportunities such as repurposing retail properties or empty offices, Mr Gutman added.

Alceon, headed by Trevor Loewensohn and Phil Green, will provide back office support, fundraising and pipeline opportunities to AFM.

Kathmandu on Tuesday announced it has become a certified B Corporation, making it the biggest B Corp in Australia and New Zealand. 

B Corps are for-profit businesses that meet the highest standards of social and environmental performance, public transparency and legal accountability.  

Started in the US in 2006 as a way to raise awareness of purpose-driven businesses by giving them a recognisable seal of approval, there are now more than 3000 B Corps worldwide, and more than 300 in Australia and New Zealand, which is the fastest growing region per capita for B Corps. 

Local retailers with B Corp certification include Outland Denim, Etiko, Koala, GlamCorner, Bellroy, Flora & Fauna, KeepCup, Good Day Girl, Koskela, Arndsorf and Kester Black. 

The addition of Kathmandu to this list reflects a shift in the way many large companies view sustainability – no longer as a niche topic confined to the CSR team, but rather a core value that permeates every part of the business. 

“Sustainability is part of Kathmandu’s DNA  and is integral to our entire operation, from our supply chain, to our materials and products and our operational footprint,” Xavier Simonet, Kathmandu’s CEO, said in a statement. 

Online tool tracks impact

To receive B Corp certification, organisations need to earn a certain number of points on the B Impact Assessment, an online tool that asks around 200 questions in five key areas: governance, workers, community, environment and customers. 

The tool is administered by B Lab, a nonprofit with locations in 26 countries, which sets the global standards, awards B Corp certification and advocates for the adoption of ‘benefit company’ status at a state level. 

In the US and other countries, businesses can register as a ‘benefit company’, which means they are legally required to consider the impact of their decisions on all stakeholders, such as employees, suppliers and the planet, not just shareholders. This locks in their purpose, no matter who owns or runs the company. 

Benefit companies currently have no legal status in Australia, though B Lab Australia and New Zealand is actively campaigning for an opt-in legal form to be introduced through a minor amendment to the Corporations Act. 

This issue will become more critical as publicly listed companies like Kathmandu join the B Corp movement. 

T2, which is owned by Unilever, is also in the process of becoming a B Corp, and B Lab Australia and New Zealand is taking the opportunity to encourage other big businesses to get on board.

“Kathmandu’s announcement as New Zealand’s first B Corp-certified multinational retail business, and Australasia’s biggest B Corp, is a significant milestone for Australia, New Zealand and the wider B Corp movement,” Andrew Davies, CEO of B Lab Australia and New Zealand, said in a statement.

“Certification is open to all sizes of business, and we are seeing increasing interest from large corporations across the world, Kathmandu’s certification sends an important signal for other big businesses to follow in their lead.”

Gender equality among Australia's top chief executive ranks could be 80 years away, with the latest survey showing female appointments are going backwards and some companies have no women at all in their leadership teams.

Key points:

• Women hold 6 per cent of ASX 200 CEO roles, down from 7 per cent last year
• 17 companies have no women in executive leadership teams
• 114 companies have no women in "line" roles reporting to leadership team

Of the 25 chief executives appointed to lead Australia's top 200 companies in 2019, only two were women, with the percentage of women in the top role slipping to 6 per cent from 7 per cent a year earlier.

The annual census by Chief Executive Women (CEW), which represents 560 of Australia's most senior female corporate leaders, slams "slow progress" in achieving gender balance with 17 companies still having no women in their executive leadership teams.

CEW president Sue Morphet, a former Pacific Brands chief executive, said the latest gender reading was disappointing, lamenting that gender equality at the CEO level could be generations away.

"There are some figures saying that we'll be waiting about 80 years for it to be equal, which means my granddaughter will be 84 by the time we have equal representation," Ms Morphet told the ABC.

"It is nonsense that in 2019 there are two female appointments as CEO out of 25 because there is such good talent in our organisations.

The two female CEO appointments in 2019 include Shemara Wikramanayake at Macquarie Group, who replaced Nicholas Moore, and Jolie Hodson at Spark New Zealand Limited, who took over from Simon Moutter.

Male CEO appointments include Brett Redman at AGL Energy, Francesco De Ferrari at AMP, Rob Adams at Perpetual and Renato Mota at IOOF.

The appointment of women to chief financial officer (CFO) roles has improved to 16 per cent of ASX 200 companies, from 12 per cent in 2018.

However, 114 companies still have no women in "line" roles answering to executive leadership teams, although that is a slight improvement from 119 in 2018.

Ms Morphet said company boards are short-sighted, thinking they can check a box by appointing women to roles outside the top leadership team.

"We have to be mindful that boards just don't bring women in and say 'we've got one women and we're going to pop her in human resources and then we've done the job'," she said.

Ms Morphet said many women with CEO potential were giving up because of the attitude of male-dominated boards.

"We will lose generations of really, really talented women," Ms Morphet said.

"They do give up because they just can't see that women make it to the top.

"So they get to a certain point and they leave corporations. The talent pool is being depleted."

But Ms Morphet does not agree quotas for female CEOs is the answer in the quest for equality.

"It's more than quotas," she said.

"Society has been for so many centuries the case that the man goes to work and the woman stays at home.

"But I do think it is nonsense now that we are not being treated equally when it comes to opportunity in corporate Australia."

Ms Morphet said company boards should review selection criteria for CEO roles and direct head-hunting firms to properly consider the pool of available female candidates.

The 17 companies with no women in their executive leadership teams include Evolution Mining, Afterpay Touch, Soul Pattinson and Whitehaven Coal.

Standards Australia has today announced the appointment of Adrian O’Connell as Standards Australia’s new Chief Executive Officer.
 
Adrian has been Standards Australia’s Deputy CEO since 2014 and Acting CEO since March 2019.
 
Adrian’s appointment follows a detailed and considered Board process of CEO selection undertaken over the last few months.
 
Announcing Adrian’s appointment, Standards Australia’s Chairman Richard Brooks said “The Board is delighted to confirm Adrian as our Chief Executive Officer. Since joining Standards Australia in 2006, Adrian has been instrumental in driving innovation and change to deliver greater value for stakeholders and the end users of Australian Standards.
 
Leading departments across the business including stakeholder engagement, standards development, corporate services, and international engagement has given Adrian a deep understanding of all the functions of the organisation, and importantly how we work with our network of thousands of stakeholders on a daily basis. Through the selection process, the Board found Adrian's experience, commitment and vision for Standards Australia compelling.”
 
Adrian also has diverse and extensive experience representing Australia internationally and is widely respected and recognised for his contributions in international governance positions and regional leadership roles.
 
In responding to his appointment, Adrian O’Connell said “This will be one of the most demanding periods in the history of Standards Australia as we continue to adapt to market and community expectations in the digital age. To be leading the team through this next period of change is a tremendous honour. I look forward to working with all of our stakeholders in Australia and internationally as we strive to deliver even more value to the Australian community.”

CEDA is delighted to announce the appointment of Melinda Cilento as CEO, effective from Tuesday, 3 October, 2017.

CEDA National Chairman Paul McClintock AO said Melinda was chosen after an extensive and extremely competitive selection process.

“Melinda is an outstanding choice, bringing a wealth of experience from both an economics and business background,” he said.

Ms Cilento is currently a Commissioner with the Productivity Commission and holds several non-executive roles including with Reconciliation Australia, Woodside Petroleum and Australian Unity.

Previously Ms Cilento was the Deputy CEO and Chief Economist with the Business Council of Australia and has also held senior roles with the Federal Department of Treasury, Invesco and the International Monetary Fund.

“This appointment marks an exciting new chapter for CEDA and the Board is looking forward to working with Melinda to ensure CEDA continues to deliver on its remit to produce rigorous research and policy discussion to influence good public policy,” Mr McClintock said.

Commenting on the appointment, Ms Cilento said she was excited to be taking on the role.

“CEDA holds a special place as one of the few independent bodies contributing to discussion and debate around national economic and social policy,” she said.

“I look forward to working with members to ensure CEDA continues to deliver high calibre speakers and quality discussion on the CEDA stage.

“Priorities when I begin will be to meet with members, many of whom I already know through my previous roles, and begin planning CEDA’s 2018 research agenda.

“CEDA is in great shape and I’m looking forward to exploring how we can expand the reach and influence even further of CEDA’s robust research agenda and events program.”

Ms Cilento takes over the position from Professor the Hon. Stephen Martin, who led CEDA from 2011 to 2017.

Woolworths kicks off its garden collectables campaign today at stores across the country and online, with an extensive marketing campaign and website to draw in consumers 

The green campaign is designed to encourage shoppers to grow their own fresh produce, with 24 varieties of vegetable, herb and flower seeds available to collect including thyme, basil, spinach, carrots and pansies. 

Customers have the option to collect a seedling kit with every $30 they spend in store or online, while stocks last. 

Woolworths is also using the opportunity to encourage more fruit and vegetable purchases, with a bonus seedling kit offered when customers spend $15 on fresh fruit and veg in a $30 shop in-store. 

The retailer has launched an aggressive marketing campaign to support Discovery Garden across TV, radio, press and digital, alongside social media influencers and out of home advertising including street furniture. 

Woolworths has even integrated Google Home into the program to provide tips throughout the growing process. 

A Discovery Garden website is now live to advise shoppers on growing the seedlings, and with recipes that incorporate the fresh produce, and there is a free interactive growth chart and learning book offered in-store and online. 

“As the fresh food people, we have a role to play to engage families and empower Aussies of all ages to understand how their food grows,” Woolworths Group chief marketing officer Andrew Hicks said.

Hicks said the team at Woolworths have been working on this “community campaign” for the last 12 months. 

“Providing solutions, helpful tips and content as well as driving community and school engagement to deliver on fresh food educational outcomes is also incredibly important to us,” he said.

NEW YORK (AP) — Nordstrom opened a new store in Manhattan on Thursday — without any merchandise.

Instead, the store offers services like tailoring and allows customers to pick up or return items, including online orders from any retailer.

The push to open these local hubs comes as Nordstrom, like many department stores, is trying to reinvent itself as it sees customers shopping more online.

“We believe this is our model for the future,” said Erik Nordstrom, the retailer’s co-president. “So we have to figure it out and tweak it. The more we engage our customers, the better it is.”

The Upper East Side location is the first Nordstrom “mini store” in New York. The company opened three others in Los Angeles and plans another one in New York’s West Village later this month. The company’s co-president declined to say how many Nordstrom will open in total.

Last month, retailer trimmed its earnings and sales outlook for the current fiscal year after it reported profit and sales declines in the second quarter. Sales at its full-priced stores dropped 6.5%.

At the Nordstrom mini stores, which average about 2,000 square feet, customers can get fittings and alterations from tailors on the premise, even if they buy their clothes elsewhere. The stores will also accept not only returns of items purchased at Nordstrom but from any online retailer. Customers bring the packaged items, with or without the pre-printed labels, and a salesperson will ship them out. There is no service fee.

Each local store is tailored to the neighborhood it’s in. For example, the Los Angeles stores offer manicures while the Manhattan Upper East Side store has an area where parents can drop off their baby strollers to be cleaned for a fee.

Nordstrom told The Associated Press that the local strategy focuses on gaining share in the company’s most important markets by making its customers more engaged through the services it offers. The retailer has said its business is highly concentrated in its top markets, with the top 10 accounting for 60% of its overall sales.

So far, Nordstrom is seeing success with its local stores in Los Angeles. Customers spend two and a half times more on average. In addition, product returns are coming in eight days faster than usual, giving Nordstrom a better chance at reselling them.

Luggage and handbag retailer Strandbags launched a new concept flagship store in Chadstone Shopping Centre over the weekend – the first step in a new bricks-and-mortar strategy which will see some stores triple in size over the next three to five years.

With handheld payment devices freeing up staff and digital screens showing video and digital content, the Chadstone flagship store is Strandbags’ effort to deliver a world-class shopping experience.

Strandbags managing director Felicity McGahan told Inside Retail the store was fitted to be unique and engaging, but also to give customers the freedom to shop for what they want, how they want, when they want. 

“Digitisation is giving the customers complete control. They’re in control of us, they’re savvy,” McGahan said. 

“Sixty-four per cent of our customers have already researched online before they walk into our stores. So, how do we create a space that supports that? Where they can come in and really engage with the brand?

“We’ve got to give them a reason to get off the couch and come in-store, and not let them down when they get in there. Trying to find that balance has been really important.”

Fixing what isn’t broken

According to McGahan, the Chadstone flagship is the first in a new line of Strandbags stores, underpinning a complete redesign and refresh of the core brand.

Contrary to many of its peers, this refresh is not part of a turnaround strategy, or an effort to stave off slowing sales – with the business selling a handbag every five seconds, a wallet sold every six seconds, and a suitcase every 12 seconds.

“There’s a saying: The time to fix the roof is when the sun’s shining,” MacGahan said. 

“It’s not a broken business, and I’ve spent a lot of time understanding what makes it successful. This is about evolution. We’ve got to keep moving, keep changing. Retail is changing, and the experience is very important.”

The luggage retail market is growing at a rate of five per cent year-on-year, according to McGahan, which has enabled the brand to quietly grow its footprint.

In the last year, Strandbags has up-sized 25 of its stores, and is looking to do the same across many more over the next three to five years with the improvements seen in the Chadstone flagship to be rolled out across its store fleet.

“We see a mega-store opportunity. We see large stores as well, and then obviously core stores as well. Chadstone is just another proof point to say that this is the right strategy,” McGahan said.

Myer  laser focus on cutting costs and shrinking stores has rewarded the department store with its first profit growth in nine years, sending shares soaring.

Myer's underlying profit before one-off costs rose 2.2 per cent to $33.2 million, slightly ahead of analyst consensus forecasts of $32.7 million and a significant improvement on last year's $494 million loss.

This profit boost was not driven by sales, however, with comparable store sales dropping 1.3 per cent. Instead, a $32.6 million reduction in costs and a halving of capital expenditure helped return Myer into the black.

Myer shares rose 10.5 per cent to 63 cents on Thursday, which followed a 5.5 per cent rise on Wednesday.

Myer chief executive John King labelled the result as "disciplined", with the company putting a focus on closing stores and reducing how much staff it had in its stores during non-peak hours.

The company's cost of doing business, which includes labour costs, decreased 3.1 per cent.

Significant opportunities remain across our network for space hand-backs or closures, and these discussions will continue with landlords

"We have progressed a number of strategic initiatives, but recognise there is much more to be done to transform this business in the interests of customers and shareholders," Mr King said.

However, the chief executive pointed to a "challenging macro environment" in the year ahead, and noted the store was continuing to pursue additional store closures.

Myer reduced its gross lettable area by 29,000 square metres over the past 12 months, and has flagged that an additional 5 to 10 per cent reduction in store space was still under discussion.

"Significant opportunities remain across our network for space hand-backs or closures, and these discussions will continue with landlords," Mr King said.

Last week, Myer's biggest rival David Jones announced plans to "aggressively" shrink its store footprint,  targeting a 20 per cent reduction by 2026. With both department store owners historically in lockstep, it was expected Myer would follow suit.

Despite Myer's profitable result, some analysts were cautious. Citi's Bryan Raymond rated the stock a sell with a target price of 49 cents, saying the outlook for 2020 was poor.

"Myer has delivered earnings growth and good cash flow, which debtholders will be satisfied with," he said.

"However, the source of improved earnings was from lower costs and may impact future sales growth, in our view."

Online, exclusive brands to boost growth

Total revenue decreased 3.5 per cent to $2.99 billion, but came in stronger than analyst forecasts of a 5.1 per cent drop. Earnings before interest, tax, depreciation and amortisation also beat estimates, up 7.2 per cent at $160.1 million.

Sales for Myer's private label brands increased 1.9 per cent, and the company flagged an expansion of its 'Only at Myer' brands, with 90 new labels set to arrive in-store by Christmas.

Mr King said these new brands, which include Oasis, Vero Moda and Karl Lagerfeld Paris, were "outperforming their peers".

Online was a point of significant growth for Myer, with digital sales up 21.9 per cent to $292.1 million, generating 9.8 per cent of total sales and matching the sales at Myer makes at its largest store.

Mr King said the company was still expanding the range of products it had available online and aimed to match its store and online ranges by the end of 2019.

Myer's balance sheet improved over the financial year, with net debt falling $69 million to $39 million, which is its lowest net debt position for more than a decade.

One-off costs totalled $8.7 million, consisting of redundancy costs, costs for onerous leases and asset writedowns.

The company did not pay a dividend, continuing to keep it suspended.

When Miniso initially entered the Australian market in 2017, the Chinese retailer said it would open 300 stores across the country. But 32 stores and two years later, plans have changed slightly. 

“What we found is that the market is a bit different than what we thought in the beginning,” Richad Li, vice president of Miniso Australia, told Inside Retail.

“The logic at the beginning was based on population,” he said, referring to the “ideal number” of shops per capita that Miniso uses when it enters a new market.

“But you need to think about how your traffic will be impacted by the density of the population.” 

Miniso on Thursday announced plans to open 100 stores across Australia by the end of 2020, an impressive number to be sure, but also a significant drop from its initial goal.

Australia is notoriously difficult for businesses like Miniso, and arguably Amazon, that rely on high population density to make their model, built on economies of scale, profitable. 

Li clarified that the company still wanted to open 300 stores in Australia eventually, but that this number would include other brands in the Miniso stable that sell different products and target different customers. 

“The reason [we want to open 300 stores] is not only to chase the huge goal,” he said. 

“We need more shops and more business to reduce our per unit cost.” 

As Miniso’s footprint expands and its turnover increases, the cost of shipping goods to Australia, warehousing and distributing them to stores comes down. 

“Even if we’re selling products cheaper than our competitors, we have more gross margin because of volume,” he said. 

“Then we have enough volume to optimise our supply chain to reduce per unit cost, and this can increase our margin. It’s a positive feedback circle.”

Marvel-lous Miniso 

Founded five years ago by Japanese designer Miyake Junya and Chinese young entrepreneur Ye Guofu, Miniso is a low-cost retailer offering a wide range of household products. 

The chain positions itself as a Japanese brand, though it is headquartered in China and many of its products are manufactured there, and has 3869 stores in more than 80 countries. 

In 2018, the company had a turnover of US$2.5 billion ($3.7 billion) globally. Turnover in Australia was around $30 million, according to Li. He expects that figure to triple by the end of next year, as the company’s physical footprint expands.

The company has forged profitable partnerships with globally recognised characters, including Hello Kitty, Pink Panther, Sesame Street and most recently the Marvel superheroes, including Captain Marvel, Iron Man and Captain America. 

East coast in focus

Li said Miniso would focus its expansion efforts on the east coast of Australia, given the location of its warehouse in Sydney.

“We have shops in Perth right now, but the challenge for Perth is the logistics. It costs more to ship products from Sydney to Perth than from China to Perth,” he said.

But he said it was not only good for consumers but for Miniso’s “branding” to have a footprint there.

Miniso currently has stores in some of the country’s top shopping centres, including Chadstone in Melbourne and Westfield Parramatta, and Li said the retailer would continue to seek locations in newer shopping centres, where it is easier to secure a good position than in existing centres.

New York-based luxury accessories and lifestyle house Tapestry has ousted its CEO suddenly due to the company’s poor sales results and plunging share price. 

Tapestry – parent of Coach, Stuart Weitzman and Kate Spade – has lost more than half of its value within the last year, from US$50 to $20.44 on Tuesday. 

The company announced overnight that CEO Victor Luis would leave both his executive role and his seat on the board with immediate effect. He has been replaced by Jide Zeitlin (pictured above) as CEO, the board’s current chairman who will continue in that role as well.

The company has also named Susan Kropf, a current member of the Tapestry board, as lead independent director.

Luis has led Tapestry for five years and in its announcement, Zietlin paid tribute to Luis’ achievements. 

“Early in his tenure, he was a critical part of Coach’s development outside of North America, first as president and CEO of Coach Japan and then assuming responsibility for the brand’s entire international organisation. Over the past five years as CEO, Victor was instrumental in the successful transformation of Coach and the establishment of Tapestry as New York’s first house of modern luxury lifestyle brands.”

Luis oversaw the acquisition of luxury footwear brand Stuart Weitzman. However, three weeks ago Tapestry disappointed shareholders and analysts after its latest add-on Kate Spade, showed weak growth. Fourth-quarter profit fell from $212 million to $149 million on sales of $1.5 billion.

Zeitlin said the board remains committed to Tapestry’s multi-brand model, while recognising the need to sharpen its focus on execution, 

“Given the continued strength and momentum at Coach – the largest brand at Tapestry – our top priority remains driving significantly improved performance at our acquired brands.”

Myer has released its full year 2019 results, reporting that despite a decline in total sales the digital sales for the business increased by 21.9% to $292.1 million. 

While total sales declined by 3.5% to $2,991.8 million compared to $3,100.6 million in 2018, the digital sales – which comprise of online sales and sales via in-store iPads – now represent the largest store in the business and make up 9.8% of total sales. 

The business also reported that comparable store sales declined by 1.3% in 2019, however the cost of doing business improved by 3.1% to $1,002.4 million compared to $1,035.0 million in 2018. 

Myer CEO and MD John King cited store improvements and closures and the Customer First Plan as reasons for the results. 

"This result demonstrates our focus on profitable sales, a disciplined management of costs and cash, as well as deleveraging the business.

"In the first year of the Customer First Plan, we have progressed a number of strategic initiatives, but recognise there is much more to be done to transform this business in the interests of customers and shareholders.

"We have made progress working with landlords, through a portfolio partnership approach, to reduce our footprint and refurbish stores to transform the customer experience, whilst simultaneously delivering material cost savings.

"We announced with Scentre Group a plan to refurbish our store at Belconnen to create an enhanced shopping experience across a reduced floor space. 

"Similarly, we will hand back a floor and refurbish our Cairns store from January 2020. We have also agreed to exit level four of Emporium in Melbourne from May 2020," he said. 

King also cited improvements in the back-end operations, the relaunch of the website and improved staff training as factors in the results. 

"Pleasingly customer service metrics have improved during the year reflecting back office efficiencies, the new labour model that ensured more appropriate service levels at peak trading times, greater training levels and improved product knowledge.

"The rollout of new and ‘Only at Myer’ brands continues with a significant brand refresh currently underway across all stores, with more than 90 new brands expected to be added to our range by Christmas 2019.

"The continued strong growth in digital sales, now representing our largest store and 9.8% of total sales, was particularly pleasing. 

"This growth reflects both the upgraded website that was launched in September 2018 and a significant increase in products available online, which included the addition of several concessions. 

"We aim to match our store and online ranges by the end of this calendar year and are confident that there are significant opportunities to continue to grow this channel.

"During the year we reduced costs by $32.6 million reflecting the enhanced new staffing model in-store, more focused marketing spend, reduced store occupancy, as well as efficiencies and reduced waste across all areas of our business," he said. 

Further in the results statement, Myer said that it believes it can implement additional cost savings in its supply chain. 

Myer released its full year 2019 financial results on September 05.

At variety retailer Miniso –  a cross between The Reject Shop and Japanese chain Daiso – same-store sales are growing more than 20 per cent as customers fill their baskets with budget-priced cosmetics, accessories, stationery, homewares and novelty merchandise from brands such as Marvel and Pink Panther.

After opening its first store in Australia in early 2017, Miniso plans to open  as many as 10 franchised stores a month over the next 15 months, lifting its footprint from 32 stores  to 100 by the end of 2020 and increasing pressure on competitors such as The Reject Shop.

The China-based retailer, owned by the Aiyaya Group, is also close to launching a new brand in Australia to accelerate its growth and tap new parts of the market.

"One thing never changes – customers always want something that's a good price, not cheap, but a good price," says Miniso Australia vice-president Richard Li.

"What we try to do is optimise everything we can to give the best price to customers.

"We also find customers like to buy things they've never seen before – last year we kept pushing things like Pink Panther products and Sesame Street – those kinds of things helped us a lot."

Co-founded in 2011 by Chinese entrepreneur Ye Guofu and Japanese designer Miyake Junya, Miniso is one of the world's fastest-growing retailers. It has almost 4000 stores in more than 100 countries and sales have more than doubled to $US2.5 billion ($3.7 billion) in three years.

Miniso's aesthetic is similar to that of Japanese retailers Muji, Uniqlo or Daiso, but the chain differentiates itself from rivals with low prices (most products cost between $5 and $10) and exclusive products designed in-house or with brand partners.

"We find a lot of the product in the Australian market is kind of overpriced," said Mr Li. "What we try to do is find a sweet spot between price and production and give the benefit to the customer."

Refresh its range

Miniso releases 200 to 400 new products a month to refresh its range and encourage customers to shop frequently in store. As a result Miniso, which does not sell online, attracts strong foot traffic to shopping centres and has been able to negotiate attractive rents with landlords such as Scentre Group.

Sales in Australia reached $30 million in 2018 as the company opened 17 new stores and turnover at existing stores rose between 20 and 30 per cent.

"We did some crazy things in the first year – we find if we expand too fast we can make mistakes – so we slowed down a bit to build up a solid foundation," Mr Li said.

He said the Miniso brand was not yet well known in Australia outside Asian communities but was well regarded by investors because of its strong growth overseas.

"Many franchisees are overseas investors. They see it as a good opportunity. That's how we can expand so quickly ... all the shops are profitable so the franchisees are all happy," he said.

The fashion at Myer’s spring-style showcase in Melbourne yesterday reflected the retailer’s approach to business: considered, confident, consolidated … and accessible to everyone.

With the embattled department store due to report its latest financial results next week, chief executive John King was exuding quiet confidence about the retailer’s future, saying its “customers first” plan was progressing well.

“I’m excited about the future,” he said.

“We’ve spent the last year trying to reconnect to our roots and, more importantly, with our customers, to make sure we’re relevant in this changing face of retail.”

The chain had already started to follow a more mid-priced offering, to differentiate itself from David Jones, which is chasing the aspirational end of the market.

But the fashion on show yesterday looked every bit as covet­able for the coming season.

The retailer has recently added about 90 new brands, Australian and international, many of them exclusive, including Hansen & Gretel, Husk and popular Scandinavian brands Rotate and Rodebjer.

Collection highlights were showcased by a diverse range of models across size, age and background.

Clare Hurley, Myer’s category manager womenswear, said: “Whether you’re young, old, looking for activewear, casual wear or something for the races, we’ve got newness for her in every segment.”

Ms Hurley said the focus this season was on the evolution of existing trends rather than bringing in entirely new aesthetics.

Among these, colourful tailoring would continue to be a big trend.

“Coloured suiting will be so prevalent this season. We’ve got beautiful lilac, strong, vibrant reds and the pink suit — you’re going to see every other person in a pink suit,” she said.

“It’s just eye-catching. Also it’s versatile — you can wear the jacket with a pair of jeans, the pant with a T-shirt and denim jacket.”

On that note, she added that there had been a slight move away from dresses to separates.

And in case you were wondering, this year’s most ubiquitous item is digging its claws in.

“Six months on, everyone is still in an animal-print skirt with an oversized knit, and in three months’ time it will be with a white T-shirt.

“Animal print is still really strong,” Ms Hurley said.