Get the latest retail news straight to your inbox

    Don’t go searching for insights in the retail space, we deliver them direct.

Lovisa finds profit abroad

The AFR reported that affordable jewellery chain Lovisa has emerged relatively unscathed from the rocky global retail environment, delivering "pleasing" profits courtesy of its aggressive push into overseas markets. Lovisa opened 36 stores overseas in the six months to December 31, which helped lift interim sales 12.3%. On Wednesday the retailer said it planned more store openings in the United States and France this financial year to add to the 12 opened there during the period. Investors sent Lovisa's share price rocketing up 26.6% to $9.80 by midmorning following its interim results. Lovisa's share price has flip-flopped in the past year, hitting a high of $12.53 in June but dropping 1.3% overall in the past year. It has relied heavily on retail expansion to drive profits, with comparable sales down 1.8% for the period because of difficulties in the Australian retail environment and strong sales growth in the same period a year ago.

Coles resets after profit drops 29pc

The AFR reports that, in a frank assessment of Coles' prospects, new CEO, Steven Cain, says the food and liquor retailer faces multiple challenges, including costs rising faster than sales, fast-changing consumer shopping habits and margin dilution from the shift to online shopping. An observation that comes a little late given they just sold the business to the public. We have repeatedly warned that Coles (and Woolworths) have structural problems. This recent announcement confirms our observations.

Visa and Mastercard plan to raise fees in the US

The Wall Street Journal reported that credit card companies are increasing a range of fees that US merchants will pay to process transactions, putting new strain on retail. Some of the changes relate to so-called interchange fees. Card networks set the price of these fees, which merchants pay to banks when consumers shop with the cards they issue. Merchants often increase prices following such fee increases, in an attempt to protect their own profits. It's a vicious cycle. US merchants paid an estimated US$64 billion in Visa and Mastercard credit and debit interchange fees last year, according to the Nilson Report - up 12% from a year earlier and up 77% from 2012. The big question is when will the fee increases filter through to us Down Under?

New Zealand to target online giants with digital tax

Reuters reported that New Zealand plans to update its laws so it can tax revenue earned by multinational digital firms such as Google, Facebook, and Amazon, extending a global effort to bring global tech giants into the tax net. Highly digitalised companies, such as those offering social media networks, trading platforms, and online advertising, currently earn a significant income from New Zealand consumers without being liable for income tax, the government said in a statement released after the announcement. The revenue estimate for a digital services tax is between NZ$30 million and NZ$80 million. A number of countries including the U.K, Spain, Italy, France, Austria and India have enacted or announced plans for a DST. The EU and Australia are also consulting on a DST.

Beacon Lighting downgrades full-year guidance

The AFR reported that Beacon Lighting has downgraded profit guidance and now expects to deliver flat profits in 2019 because of "unpredictable" trading conditions triggered by the housing slump and tighter credit conditions. The lighting retailer's net profit rose 3.2% to $11.6 million in the 26 weeks ended December 23, falling short of consensus forecasts of about $12 million. This followed a 20% rise in net profit to $11.3 million in the first half of 2018. Group sales rose 4.8% to $128.3 million, buoyed by emerging businesses and three new stores. But same-store sales fell 0.6% and were down again in January. Beacon Lighting chief executive Glen Robinson now expects profit this year to be in line with that last year.

Amazon gives Catch Group a nice boost

The AFR reported that Catch Group says record sales growth in the December half is partly due to the arrival of Amazon. Catch Group's gross transaction value rose 62% to $254 million in the six months ending December, buoyed by the launch of a new online marketing place in June 2017. This followed a 72.9% increase in GTV to $99.4 million in the first quarter of 2019. Sales from's core in-stock offering rose 20% to $163 million, while marketplace GTV soared to $90 million from $20 million in the year-ago period. An IPO still seems imminent despite postponing plans to list last November, after rival Kogan reported weaker than expected first-quarter sales and margins, and as the market for new floats dried up amid weak discretionary spending.

Foot traffic lures car dealers to the mall

The AFR reported that $1.3 billion car dealership operator AP Eagers is emerging as a partial saviour for the ailing department store group Myer as it negotiates with a shopping centre owner to take over a large chunk of Myer floorspace in a new-age approach to vehicle retailing. AP Eagers said it was talking to a landlord to take up to 3000 square metres of space from Myer in a Brisbane shopping centre as it gets on the front foot in an industry bracing for big changes to traditional retailing models, with shopping centres offering more foot traffic to lure car buyers. Myer's new management aims to downsize some store footprints and reduce rents in a race to try to resurrect the fortunes of the venerable department store chain that has lost its way as online retailers chew into its market share.

Amazon ditches plans for New York hub

Reuters reported that Inc abruptly scrapped plans to build a major outpost in New York that could have created 25,000 jobs, blaming opposition from local leaders upset by the nearly US$3 billion in incentives promised by state and city politicians. The company said on Thursday it did not see consistently “positive, collaborative” relationships with state and local officials. Opponents of the project feared congestion and higher rents in the Long Island City neighborhood of Queens, and objected to handing billions in incentives to a company run by Jeff Bezos, the world’s richest man. Amazon said it would not conduct a new headquarters search and would focus on growing at other existing and planned offices.

Baby Bunting delivers 28% increase in half year profits

In results lodged with the ASX, Baby Bunting reported strong sales and profit growth in the first half of FY19, despite the major shake-up in the category following the of Toys ‘R’ Us and Babies ‘R’ Us at the start of the fiscal year. The brand expanded its store count to 52 stores, increased online sales by 61% to account for 11.5% of sales and focused on strong market share growth in the half. As a result, net profit after tax for the period grew 27.8% to $5.2 million, based off of a strong total sales result of $177.7 million – a 17.2% increase on the prior corresponding period. Looking at the remainder of the financial year, the group is expecting FY19 EBITDA to reach $25 to $27 million – growth of approximately 34 to 45% year over year.

Retail tech expectations for 2019

An article in Forbes states that it's no longer a question of if AI, predictive analytics and robotics will usher in a new era in business, but how this technology will continue to redefine the retail space. The piece postulates that winning companies will leverage technology at all levels of their organisation to gain mindshare with customers. It predicts that in 2019, the ability of 3D tech to dramatically streamline design and supply chain processes will become more mainstream. It also suggests that we will see the continued explosion of AI across retail, particularly as it relates to informing product recommendations for consumers. Personalisation will become more relevant than ever with innovative technology allowing brands to provide a deeper connection for consumers as they try out and explore purchasing items. And, finally, 2019 will not be the year of augmented reality changing rooms at apparel stores as technology providers and brands work to craft a customer experience that feels more natural and less intrusive.  

City Chic posts strong results

According to the results announced to the ASX, plus-sized fashion brand City Chic has done well in the first six months in FY19. Achieving 9.6% comparative growth is impressive, particularly in the current retail environment. Profitability and return on capital are excellent. It is clear that the decision to offload non-performing brands such as Millers, Katies and Rivers in June 2018 was a smart one. The brand, now trading as a part of City Chic Collective Ltd, reached revenue of $75.4 million. City Chic's CEO stated that the business has plans to expand its store portfolio further across Australia and New Zealand. Yesterday's ASX announcement was followed by a very positive review in today's Financial Review.

Ikea may launch an open online marketplace

The Financial Times reported that Ikea is exploring the launch of an online sales platform offering furniture not just from the famous flat-pack retailer but also from rivals as part of its big transformation. The world's biggest furniture retailer is finalising the details on its first test of selling on a third-party website such as China's Alibaba or Amazon. Ikea is not yet in talks with any of its rivals but it has noted that it would like to be involved in the creation of any industry-wide sales platform. Ikea is undergoing some of the biggest changes in its history as it tests concepts from leasing furniture and selling it on other websites to having city-centre shops and offering home assembly to its customers.