Australian fashion house Country Road Group has reported a full-year loss attributable to shareholders of its parent company Woolworths Holdings Limited (South Africa) of R1.43 billion South African Rand (~A$124.1 million). This is deeper than FY24 when this loss was down A$45.7 million.
This is matched by the group's operating profit falling into the red in FY25, hitting negative A$18.1 million, down from a positive operating profit of A$51.3 million in FY24.
The Australian fashion group's loss before tax runs deeper, hitting negative R1.89 billion (~A$163 million).
This comes amid a sink in total sales for the group, with its parent company Woolworths Holdings Limited (South Africa) confirming CRG’s sales were down 5.4 per cent, and down by 6.8 per cent on a comparable store basis. CRG’s total revenue remains just over A$1 billion.
The Australian fashion group manages five brands, including Mimco, Politix, Trenery, Witchery and Country Road.
“Following its successful separation from David Jones, CRG completed a significant restructure during the period to reconfigure its operating model and reset its structural economics as a standalone business,” WHL reported. “This transformation was undertaken in an accelerated timeframe and within a particularly unconducive macro backdrop, whereby sustained pressure from high interest rates and living costs continued to impact consumer footfall and spend.”
WHL added that CRG’s trade performance in the fourth quarter improved, declining by a lesser 0.3 per cent on the prior comparable period, with sales for the second half of FY25 (to June 29) declining by 4.5 per cent.
The Country Road and Trenery brands have continued to trade ahead of the rest of the CRG brands, WHL noted.
Trading space across the group also decreased by 0.8 per cent, while online sales contributed 28.6 per cent of total sales for the period, up from 27.7 per cent in the prior comparable period.
Higher promotional activity to manage inventory levels in a heavily discounting environment, coupled with the impact of a weaker Australian Dollar on input costs, resulted in a 390 basis point decrease in CRG’s gross profit margin to 56.4 per cent.
“Whilst expenses were well controlled and declined by 1.5 per cent versus the prior comparable period, the impact of the aforementioned factors amplified the degree of negative operational leverage, particularly in H2.
“As a result, CRG reported adjusted EBITDA of A$103.9 million, a decline of 41.1 per cent versus the prior comparable period, and an adjusted EBIT loss of A$18.1 million for the period.”
On top of this, WHL also recognised an impairment charge of R866 million (~A$75 million), relating mainly to the goodwill and brands in the Country Road Group, particularly in the Witchery, Mimco and Politix brands.
Despite the challenges at its Australian fashion subsidiary, WHL – which also manages Woolworths department stores across South Africa – reported total sales of over R80 billion (~A$6.95 billion).
The South African company’s overall profit was R2.44 billion (~A$211.6 million).