Solomon Lew moves to reassure shareholders

Solomon Lew (right) and Premier CEO Mark McInnes o

The owner of Smiggle stationery chain and pyjama retailer Peter Alexander says its sales in the first half have hit a record $588.6 million.

Premier Investments, which also owns a string of clothing retailers including Just Jeans and Portmans, says it wanted to update the market following “recent press speculation around 1H17 earnings risks for retailers in Australia, including Premier”.

The group, due to release results on March 21, expects underlying earnings before interest and taxes to be between $92-$93 million for the six months to January 28, up from $84.1 million last year.

The early update comes after the sudden collapses of fashion retailers David Lawerence, Marcs, Herringbone and Rhodes & Beckett have weighed on on the company’s shares – with pessimism weighing on the company’s shares.

Speaking to Inside Retail, Matt Newell, executive strategy director at retail strategy firm, The General Store, said the level of emerging and international competition is growing faster than the number of local customers, so there is likely to be some fallout for the industry.

“It’s a tough environment for established retailers with large infrastructures because it’s difficult for them to evolve as quickly as emerging businesses. They need to balance the benefit of their size with the need to keep changing, which isn’t easy,” said Newell.

“Mid-market and upper-middle markets tend to be the most exposed in difficult conditions, as they end up getting flanked on both sides. The low price retailers and high end retailers tend to fair better.

“I think there’s a big opportunity for retailers with physical stores to drastically improve their instore experience. The internet can’t be beaten on commodity style purchases but online retailers can’t match the immersiveness of physical retail. Retailers with stores should play to that advantage as hard as possible.”

What can stop the rot for fashion retailers in Australia? Have your say in our comments section below.

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