Premier Investments is taking a disciplined approach to store leases, following closure provisions and rent disputes during COVID-19.
According to its annual report, over 75% of Premier Investment’s retail store network either have their leases expiring in FY23 or are in holdover.
In his report, chairman Solomon Lew said the Group does not seek to close stores, but maintains an “unrelenting” focus on store profitability.
“Our landlords recognise the long-term strength of Premier and its seven iconic brands,” he said.
“With their support, opportunities exist to refresh, upgrade and or expand stores across all of Premier’s brands over the next three to five years as we simultaneously continue to invest in our online potential.”
The Group operates 1,100 brick and mortar stores across six countries, 15 websites across four countries and holds wholesale partnership arrangements internationally.
Its brands include Peter Alexander, Just Jeans, Jay Jays, Portmans, Dotti, Jacqui E and Smiggle.
For Peter Alexander in particular, the Group is focusing on larger format store expansion opportunities, which have been identified as a factor for further growth. Four new stores have already been confirmed to open in 1H23.
Lew further noted that Premier Retail’s ability to “leverage synergies” from centralised sourcing and supply chain functions, and a centralised support centre, sets the business apart from competitors.
The group operates distribution centres in four countries, including a fully owned centre in Australia.
“These distribution centres have enabled the business to be agile and scale up operations in response to customer shopping behaviours across channels,” Lew said.
“Over the past 12 months, additional distribution centre space has been leased in both Melbourne and Auckland to support ongoing growth and further drive efficiencies.”
The move to polish its omnichannel presence arises from a five-fold sales increase in the Group’s total online store channel to $340.1 million in FY22, up 400% on FY17’s $68 million.
This represents a 22.7% share of total Group sales for the financial year, which is up 14.3% on FY21 numbers.
For each of the seven brands, the most viewed window and the largest store is reportedly the brand’s online channel.
Lew said that each Premier Retail brand seeks to improve customer experience across its entire omni-channel operations.
“To support this, we have continued to invest in people, technology and marketing to improve our world-class platforms and customer experiences,” Lew said.
These investments mean Premier’s online channel continues to deliver higher EBIT margin than the retail store network, which it said provides significant operating leverage for future growth.