Smiggle to expand into 10 new markets in 2019
Solomon Lew’s Premier Investments increased group net profit 13 per cent over the first half of FY19 to $88.8 million, driven by strong online sales and global performance by Smiggle, as well as a record outcome for Peter Alexander.
Online sales grew 35.2 per cent to $75.7 million, with the business’ e-commerce effort to be expanded in New Zealand over the second half, with transactional websites for Just Jeans, Smiggle, Portmans, and Jacqui E slated to be opened.
According to Premier’s chief executive Mark McInnes the result was a testament to the board and management team’s understanding of the difficult conditions retailers are trading under.
Smiggle enjoyed record global performance, with total sales for the half reaching $178.8 million, driven by strong 34.8 per cent sales growth in the Asian market.
As such, the brand will be expanded in the region, entering Korea, Thailand, Indonesia, the Philippines and the United Arab Emirates, becoming available in over 100 new locations as of July 2019.
It will also be expanded to Canada in late 2019, giving the brand its first exposure to a “key North American market.”
Due to “major structural changes to the global retail industry,” the brand will partner with Amazon Europe to launch in France, Italy, Germany and Spain between April and July 2019, and is in talks with Alibaba to bring the brand to countries where the brand does not currently operate.
The group’s apparel brands segment, which includes Just Jeans, Jay Jays, Jacqui E, Portmans and Dotti, saw like-for-like sales growth of 8.8 per cent over the half, while sales growth improved 7.5 per cent.
The discrepancy in like-for-like growth and sales growth was impacted by the closure of several stores over the half, with a number of further store closures announced for the second half.
Just Jeans flagship in Chapel Street, Victoria, opened 48 years ago, will be shuttered in April, while Dotti and Smiggle stores on Chapel Street slated for closure in calendar 2019 – “a direct result of unrealistic rent expectations and … a true symbol of the changing nature of the retail market.”
Additionally, Just Jeans will close its South Australia flagship in Rundle Mall in the second half of the year for similar reasons, “demonstrating the willingness of Premier Retail to walk away from stores with unrealistic rents that deliver unprofitable sales.”
Sleepwear brand Peter Alexander saw sales reach $130.4 million, an increase of 14.1 per cent on 1h18, with the strategic growth plan to deliver over $250 million in annual sales by 2020 “well ahead of plan.”
The brand plans to open four further stores over the second half of FY19, after opening five in the first half.
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