Fashion giant Country Road Group has addressed issues of “significant disruption” within the business and unveiled its future strategy.
Following the company's annual general meeting yesterday, Country Road CEO Iain Nairn discussed the challenges facing the company and opportunities for evolution going forward.
“The online economy is burgeoning with international pureplays rising rapidly to prominence, and business and consumer confidence has been subdued for a sustained period of time,” he said.
“Despite this the opportunities for growth remain attractive, and we now have a more sustainable and scalable business model that better positions us to compete and grow through clearer brand positioning and differentiation, an enhanced understanding of the customer, and proven channels to reach our customers conveniently and efficiently.
“The internal environment has also seen significant disruption from the acquisition and subsequent integration program. We have focused considerable effort in establishing and planning our integration and change program framework, and the project teams have delivered outstanding results within this framework to date.
“This change program will continue for the next financial year and beyond as we seek to fully realise the synergistic benefits of the business combination.”
Nairn also confirmed that total sales for the retailer had increased by 68.6 per cent, compared to last year's $706.3 million. This includes sales for the Witchery and Mimco brands from and including September 30, 2012.
Total Australasian sales for the period were 77.7 per cent up on last year, with sales in comparable Country Road and Trenery stores increasing by 12.0 per cent.
According to Nairn, all four brands – including Country Road, Trenery, Witchery and Mimco – grew market share and improved gross margins and cost efficiency relative to last year. The group also achieved an online penetration of six per cent of total sales this year.
Going forward, Nairn said the company expects the market to remain “highly competitive” due to cautious consumer and business confidence and growth in market share of new entrants.
“We are focused and confident in our strategic and risk mitigation plans to continue to grow the business in both Australasia and South Africa, and to improve the productivity of our asset and cost base so that we can further improve returns to our shareholders,” he said.
Nairn also outlined the key strategic initiatives for the Country Road Group in the new financial year as:
• Expansion of the Witchery and Mimco brands in South Africa to complement further growth in Country Road and Trenery stores and concessions.
• Continuation of the integration and change program to fully realise the synergistic benefits of the business combination and deliver robust, efficient and scalable systems and process platforms as a key enabler of strategic plans.
• Continued development of omni-channel focus incorporating growth in digital, social media and store locations to meet the needs of customers.
• Investing in the development of store and head office teams.
• Enhancing the value of rich data through further investment in analytical and delivery capability for the benefit of customers.