Oroton Group has confirmed store closures are on the cards for 2012, but also hinted at plans to increase its retail presence in Australia, despite the tough trading environment.
The company, responsible for luxury brands Oroton and Polo Ralph Lauren, released results from its annual general meeting this morning and admitted that “Australian market conditions have been considered challenging by many retailers”.
However, despite this, the group's businesses achieved seven per cent growth in like for like sales overall in the past financial year. Oroton CEO Sally Macdonald also revealed that “the positive momentum achieved last year has continued in the first 17 weeks of this financial year”.
The positive growth seems to be fuelling the group's appetite for expansion, with Macdonald alluding to plans to expand Oroton's retail footprint in Australia.
“In Oroton this year we have so far launched an Oroton fragrance collection to strong initial sales, celebrated our fifth birthday in Oroton.com, opened two new stores – one store in suburban Adelaide and one new store for lingerie only in Sydney – and closed one store in Auckland on lease expiry,” she said.
“Moving to growth plans in 2012... in Oroton, we also have a number of possible store expansions in Australia in negotiation and one more store closure planned at lease expiry in May.”
In contrast with expansion plans, Macdonald said there may also be more store closures on the way.
“We are contemplating other store closures on lease expiry with no decision made yet. Whilst these stores are profitable, with the extraordinary growth of online, we believe it makes strategic sense to close some lower volume stores at expiry and expand some stores in strategic locations to showcase our full range,” she said.
“We have expanded our Oroton Indooroopilly and Parramatta stores so far and are pleased with the results. We may continue with some existing stores but with shorter lease periods or more flexible terms. It will be decided on a case by case basis.”
Macdonald said the group is also planning to build its retail network in Asia, with four new stores scheduled for launch next year, as well as a factory outlet in Singapore to open this week.
“In summary, in this financial year, we are planning for at least 10 new stores in the group, with six already opened and the balance of four of these stores to still be opened in Asia. Including the two store closures in Oroton domestically, this brings us to a net increase of eight new stores this year, on top of our 85 stores at the end of FY11.”
The group is also looking to boost its online potential, with Oroton.com currently rating as the fastest growing store in the company, and increase its product offering.
“This year we have renewed our investment in CRM, otherwise known as customer database marketing, as it continues to drive our success in converting online research and brand engagement into online and retail sales at Oroton,” Macdonald said.
“We also look forward to launching a small capsule collection of Oroton women's apparel in around eight Oroton stores and online.”