Country Road follows retail route
Country Road will replace its wholesale arrangement with department store Myer to a concession only arrangement with at two-thirds of Myer's 60 stores - which currently account for 85 per cent of Country Road sales. Wholesale deals with around 20 clients nationwide are expected to wind down by the end of March 2007.
CEO Ian Moir confirmed a further 39 Country Road stores were planned, employing more than 150 new staff.
Strong retail sales - showing an increase of 9.6 per cent for the second half of the financial year and an rise in apparel unit sales of 27 per cent for the year as a whole - promised a solid future for the brand, Moir said.
"The retail business has been very successful and it's allowed us to move away from wholesale. The advantages of this are many. Firstly there's less complexity, we can operate under single centralised systems and processes; we can also control the production, the volume and the price."
The company had been working towards changing its arrangement with Myer for some time, and was pleased Myer's new guard had been sympathetic to the plan, he said.
Efficiencies emerging from the restructure would enable cost savings to be passed on to consumers in the form of price reductions of between 10 and 15 per cent over the next 12 months, building further on Country Road's price cuts of recent years, he said.
The Myer concession model - essentially a rental agreement between Country and Myer - followed trends overseas and increasingly in Australia, where competition was driving brands to attain greater control over their destinies, he said.
"We can grow ourselves and our profitability. We know this brand better than anyone else does and we love this brand more than anyone else does. For us as a brand it's crucial to be able to control all aspects of the brand as well as our relationship with the consumer."