Recent hiccups across the economy are putting a dampener on future goals set by some of the biggest apparel and footwear companies in Australia.
Accent Group, in particular, is adamant it can hit $1.9 billion in annual sales with an EBIT margin of more than 9 per cent and have at least 950 stores by 2030. This means lifting total annual sales by $300 million, bumping up its EBIT margin by around 260 basis points and adding around 100 more stores to its network.
That is a big task for the company behind The Athlete’s Foot, Hype DC, Platypus and the local distributor/licensee for Hoka, Lacoste and Sports Direct.
But first, it has a few hurdles to overcome, not least of which include external, uncontrollable business pressures such as starkly low consumer confidence, rising business costs including leasing and wages, and geopolitical tensions that are wreaking havoc on the economy.
Accent Group is also dealing with an ASIC investigation into alleged insider trading as well as what feels like a hostile takeover bid by Frasers Group that seems to be getting hotter by the second.
On the ASIC investigation, Accent Group shared no updates with Ragtrader when we asked them, but management noted they will share any future updates on the probe with the market as per its ASX reporting obligations.
As for Frasers’ takeover bid, with the company offering Accent shareholders $0.65 per share, Accent Group has established an independent board committee (IBC) to tackle it. Since the launch in July, Frasers has extended the offer period through to the end of September. It appears no shareholders have budged on the offer so far, with the IBC consistently telling shareholders to reject the bid.
“From my point of view and my team, we are totally focused on selling more shoes and focused totally on running this business,” Accent CFO Matt Durbin says. “We've done some really good things to get us set up and aim for that $1.9 billion dollars. My hope is that we beat it.”
In recent years, total sales – including The Athlete’s Foot franchises, which Accent has been acquiring bit-by-bit recently – are not growing at the rate it needs to be, with FY26 sales nudging up just 0.9 per cent, or by $14 million, to $1.64 billion compared to the prior year. Since FY23, total sales at Accent Group have lifted by $69 million.
But during COVID, Accent saw a massive uplift in sales, with total revenue growing by $687 million between FY20 to FY26. The company also held an EBIT margin of 9.9 per cent in FY20, albeit from a smaller revenue base.
Brokers also appear to be a little confident about Accent’s future, with Citi in particular upping its 12-month share price target to $0.77 from its past $0.65 following Accent’s FY26 results.
Citi told investors in a note that FY26 was a transition year for Accent, with the company on track for improved margins and earnings in FY27 from cost out, foreign exchange benefits, The Athlete’s Foot buybacks and the Sports Direct rollout – “all factors within the company’s control which is positive given that the macro environment remains challenging.”
This is dependent on the cost-out program, which Citi noted hopefully won’t compromise the customer experience and company culture, and the successful execution of the Sports Direct rollout and/or paying down bank debt.
Accent Group CEO Daniel Agostinelli concedes that a lot needs to change in the near future to help bolster the company’s trajectory. This includes a softening in economic challenges, including high petrol prices and jobs.
“The unemployment rate is now 4.5 per cent across the country,” Agostinelli says. “We employ 9,000 people. We're having to make decisions that we don't want to make either. But you simply need to in order to keep the cost measures in play with what the reality is of what's going on out there.”
Agostinelli says that sentiment is down, rents are going up, with these challenges more dramatic in Victoria where Accent’s head office is located.
“We really see what's going on from country towns right through to the CBDs,” Agostinelli says. “Sentiment has been down. But what has been helping us a lot is anything to do with sport has been resilient.
“So The Athlete’s Foot is very strong, and the brands within that business, one in particular being Hoka. That’s one of ours, too.
“Hoka has been trading exceptionally well on its own on its own DTC and within our stores and within the people we supply it to.”
The local drive of Hoka matches global sales trajectories, with the brand’s parent company Deckers Brands reporting a 7 per cent lift in Hoka sales to US$703 million in the first quarter of 2026. Deckers also runs the Ugg brand globally.
The CFO and the CEO of Accent Group also have high hopes for Sports Direct, with the pair adding that Dave Forsey – a general manager at Frasers Group who currently sits on Accent’s board – appears to be pleased with what’s going on with the sporting retailer. Forsey was also once the managing director of Sports Direct up until 2007.
While Forsey is not involved with the IBC and the Frasers takeover bid given the conflict of interest, Agostinelli says he remains a go-to for anything to do with Sports Direct and offers advice and input on other commercial decisions in the business.
This is a stark contrast to how the Frasers company is dealing with Accent Group as a major shareholder, with the UK company turning up the heat on Accent, sharing concerns over trading and commercial decisions, and recently calling for Accent Group chair Lawrence Myers to resign from his role. A spokesperson at Accent labelled the recent call a "stunningly self-serving" move from a group that is "trying to take control of the company without paying a premium."
In its recent statement, Frasers claimed Myer had failed to steer the company through recent difficulties, two earnings downgrades, as well as failing to take decisive action to address the fall in Accent's share price.
Accent's share price has fallen from a recent high of $1.20 to around $0.72, with many other apparel and/or footwear entities seeing similar declines through 2026. Myer dropped from a high of $0.49 in late January to around $0.21 today.
Premier Investments has had a rocky road through 2026, starting the year at $13.83, slipping to $11.27 in May, peaking at $14.96 at the end of June, and then slipping back to under $12.00 in recent days.
Step One, the underwear brand, has also seen a slide in its share price through 2026, albeit from a lower base, as has plus-size retailer City Chic.
In fact, the only fashion-centric entity listed on the ASX that is doing well, share-price wise, is Universal Store, with that business winning in the more resilient youth market.
Frasers also cited poor capital allocation at a time of material earnings pressure, partly attributed to the dividend pay out by Accent for FY26, and took issue with the goodwill write-down that Accent Group issued in FY26 of $48.6 million.
Frasers also noted that inventory grew by 8 per cent year-on-year to $334.8 million, despite owned sales only rising by 4.7 per cent.
Accent noted in its trading update last week that the inventory uptick was due to the timing of goods in transit (+$5.8m), The Athlete’s Foot reacquisition program (+$5.1m), Hoka expansion (+$2m), Sports Direct (+$8.9m) and Lacoste (+$10.3m).
"The remaining increase relates to wholesale expansion and the timing of new stock purchases."
Frasers also noted that when management was asked directly how it will hit a 9 per cent EBIT margin target given this margin backtracked in FY26, Accent pointed to currency and cost-out assumptions, and reportedly admitted that this remains to be seen in trajectories.
When it initially launched its takeover bid, Frasers also took issue with the rollout trajectory of Sports Direct stores, pointing out shifts in commentary by Accent Group over the last year. Initial statements by Accent noted that 50 stores will be open in the next six years, with a goal of up to 100 in the long-term. More recent commentary by Accent shows the company is targeting 30 stores by 2028.
Durbin and Agostinelli are confident they will hit 30 stores in the next three years.
“It's a matter of record that we've got some firm obligations to Frasers around getting 30 stores open and then 50 stores later, and we're very mindful of that,” Durbin says. “We're going hell for leather to get those stores open, albeit in a responsible way. We don't want to be overpaying for rents and all of those sorts of things.”
Durbin says these are bigger stores, at around 1,000 square metres in size, noting that it takes time for landlords to help them get them. “We've been out talking to many landlords about many different sites, and they've now had 12 months to think about how they can fit us in, and those opportunities are starting to ramp up.”
Agostinelli adds that it can be difficult in Australia in particular, given how tight the retail property market is right now, but he says the team is focusing on the right site first and foremost.
“It’s true about what’s going on with landlords in the A-grade shopping centres,” Agostinelli says. “Many of them are not building or expanding. So, of course, space is going to get tight.
“Equally, we have 850 stores. We know all the landlords very well at the highest level, and when the right location comes along, we are top of mind. So we're not concerned about finding the space.
“It's being responsible and making sure you don't overpay. Otherwise, you're going to end up with 30 stores that make no money, and that's just not the forward plan.”
Frasers’ takeover bid of Accent Group comes as the UK business takes on more shares of Hugo Boss, hitting just under a 50 per cent stake. The business also acquired Harvey Nichols from administration recently.