Mosaic Brands is looking forward to the nationwide vaccine rollout to help boost its sales in the second half, the business has revealed in its first half trading update.
The retail giant reported a 28% decline in sales (excluding Ezibuy) to $299.1 million, compared to $414.1 million in H1 FY19.
Remaining at the whim of store closures and COVID restrictions in the short term, Mosaic reported that in the longer term - beyond the 'mask economy'* as it is calling it - the business will benefit as the vaccine rollout is completed.
"Given the unique demographic of our customers we did not see, nor expect, a short-term stimulus sugar hit to sales," CEO Scott Evans said.
"However, conversely we are now planning for a longer-term sustainable lift in sales due to post vaccine tailwinds as many of those same customers emerge from hibernation.
"As the vaccine rollout gets underway we expect our customers will more confidently return to spend in-store and shopping will resume as a social outing as opposed to a targeted mission," he said.
Despite the slip in sales, the business still delivered a positive EBITDA, up 38% to $45.1 million.
Evans added that this outcome was the result of a focus on four key initiatives.
"The result was driven by a number of initiatives to reset the Group for a post-COVID economy, including a continued focus on margin growth and reducing stock levels by $92m, or 55%.
"We also closed unprofitable stores and grew our online offering from 25,000 products to over 350,000 in just 12 months," he said.
The growth in online SKUs forms part of the business' digital 'department store' strategy, which paid off for Mosaic during the half.
During the period, the business recorded a 27% jump in online sales to $52.3 million and grew its categories from 14 to 30.
Online sales accounted for 17% of total revenue for the business in half, with it also welcoming an additional 50,000 VIP members.
Across the group, Mosaic reported that its total database was at 7.4 million at the end of the period, with 5.3 million email addresses and 5 million phone numbers.
Mosaic reported a total of 708,332 digital transactions, with 61% of its customers using a mobile to complete these purchases.
Overall, Mosaic reported a 3% increase in group margin to 61% and closed out the half with $65.3 million in net cash.
At the end of the period Mosaic was operating 1,210 stores across ANZ after closing net 123 stores during the half.
* refers to the face mask rules that many Australians have to comply with.