NATIONAL: Australian retailer Country Road has attributed strong sales growth to a shift in its business model.
The listed group ceased its wholesaling activities over the 2007 financial year, opening 74 concession outlets in Myer and David Jones and upping its retail presence to 57 stand alone stores. In an address to shareholders late last month, company CEO Ian Moir said total sales were up 15.9 per cent on last year with the second half 28.6 per cent on the equivalent period. Its stand alone stores were also 15.1 per cent up against last year.
"The cessation of wholesale and the creation of a retail-only business model was a significant strategic move for the business," he said. "It simplified our systems and processes and allowed us to regain complete control of the brand."
Moir said lowered prices and better value for money, particularly in the womenswear category, had seen a significant increase in the number of units sold.
"We also introduced distribution of our product from an outsourced Hong Kong based distribution centre with product picked and packed by store and distributed direct," he said. "This has reduced our lead times and our operating costs."
Moir said to sustain the company's current growth, Country Road would open new sites, expand existing stores and refit around 18 department store outlets within the next year. He said the brand would also expand the categories of products sold, with the developers already introducing sleepwear and sweats ranges since the end of the financial year.
"Whilst the forward momentum is strong and the first quarter result pleasing, we are heading into the most significant trading period of the year. At this point, we expect sales and profit before tax to continue to grow on last year."