Woe for discount market as Dimmeys shuts up shop

An Australian institution is closing down, with 166 year-old discount chain Dimmeys announcing it will be shutting up shop.

The retailer took to Facebook to announce its closing down sale, marking 30 per cent off its goods in order to sell through as much inventory as it can. 

The post, which has garnered more than 2700 comments and has been shared over 1200 times, was met with sadness from many fans of the business. 

“So sad to see another of our long time retailers shut up shop,” wrote one commenter, while others planned to head to their local Dimmeys on the weekend to grab their final bargains. 

The announcement took some staff by surprise, with a staff member telling Inside Retail there hadn’t been an internal announcement prior to the Facebook post.

The chain, which has over 40 stores across Australia and was first founded in 1898 in Melbourne as ‘the Drapery store’, was acquired in 2014 by Cool Breeze Clothing after it collapsed into administration following a $3 million fine for breaching product safety laws. 

Dimmeys was fined for selling items, such as bath toys, children’s swimwear, cosmetics and basketball rings, that were hazardous or did not carry compliant warning labels. 

As part of the Federal Court ruling, the discount chain was also barred from selling merchandise that requires warnings or high safety standards until 2020. 

The discount store market has been in a difficult spot for the last few years, as customers increasingly look online for cheap and small goods, paired with an industry-wide drop in footfall. 

Category leader The Reject Shop recently saw a slight 0.3 per cent bump to same-store sales during the first 15 weeks of FY20  –the best comparable Q1 sales improvement the business had seen in four years – though ultimately lost $16.9 million during FY19. 

It isn’t all doom-and-gloom in the sector though, with Queensland-based retailer Silly Solly’s looking to expand out of its home state and into New South Wales.

“We’re negotiating already with people in NSW. We’d love to attack that market,” Stanton said. 

“We aim to disrupt by offering quality goods at the lowest prices. A lot of people sell cheap stuff, but we sell good stuff cheap.”

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