Gary Perlstein is moving away from bricks and mortar to a stronger online presence. Photo: Dom LorrimerSpecialty Fashion Group, which owns a portfolio of women’s fashion banners such as Millers and Katies, is prepared to incur little or no immediate return on its investment in expanding its online presence to prepare for the once-in-a-generation revolution in retail.
Chief executive Gary Perlstein said the company was committed to closing up to 120 of its stores over the next three years – it closed 47 in 2012-13 – as it recalibrates its business away from expensive leases in shopping centres in favour of higher-margin online sales.
Specialty Fashion had made large investments in its IT infrastructure and staff over the past two years to build its omni-channel platform, he said, as well as employing in-house design and sourcing teams that would protect margins in the face of cut-throat competition in the discretionary retail sector. ”All the investments in IT and the online strategy, we won’t see all the benefits we want for now but it’s important to be made,” Mr Perlstein said.
”We have embraced digitisation, we are making the investment not just for today but the future. There is a cost to be borne for that but when you’re facing a change that is once-in-a-generation you have to ensure you don’t crawl into a hole, but make those investments even if you can’t see the return tomorrow.”
Specialty Fashion unveiled a full-year net profit of $13 million despite choppy conditions marked by low consumer confidence and industry-wide discounting.
The retailer’s burgeoning websites were again a standout performer within the group, with online sales up 50 per cent to $21.9 million, against $15 million the year before.
Its online sales now represent 3.8 per cent of total revenue. Stripping out its Millers chain, which appeals to an older demographic, its online sales made up 6 per cent of total group sales.
The retailer actually recorded a loss for the June half of $5 million, but strong momentum from the first half of fiscal 2013 helped push the company into profit territory. It posted a $2.8 million loss in 2011-12.
Revenue for the year was $569.5 million, down 0.5 per cent.
A final dividend of 2¢ per share was declared, taking the total payout for the year to 4¢ per share.
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