Did we see a glimmer of light for the embattled retailer, The Reject Shop yesterday, or was it just another shuffling of deck chairs?
While the company’s annual meeting heard what sounded like a justified moan about the `the way shopping mail and other landlords are trying to raise rents, pre-meeting update suggests the retailer may be back on the rails.
The Reject Shop said Mr Fisher said comparable-store sales rose 0.3% during the first 15 weeks of the new financial year from the 2.5 per cent fall at its outlets in the second half of FY2019.
At the same time, the company revealed the name of a new CEO will be known in the next six to eight weeks.
Acting CEO, Ms. Dani Aquilina, said in the update “While only in the early stages of our turnaround, I am pleased to communicate a return to positive comparable sales. Our customers are responding positively to the changes that we are making, which re-engages with the company’s core DNA.”
“We have further work to do to provide our customers with the range and customer experience that they desire. However, I am confident, that we have fundamentally repositioned the company with a clear strategy that will deliver improved performance.”
“We encourage all shareholders to shop with us, particularly in the lead up to Christmas, and watch as our changes unfold.”
The shares recovered from being down 3.3% in early trading at $2.11, to end the strong day for the wider market up 1.37% at $2.22.
Chairman Steven Fisher told shareholders the company may more of its stores as the company promises a “more aggressive approach” with landlords intent on raising rental prices.
“It is not sustainable that rental increases are running at between two and three times the CPI index in an environment of low wage growth and record low-interest rates,” chairman Steven Fisher he told meeting on Wednesday.
“The company will have no hesitation in exiting leases where the occupancy costs do not meet our rent to sales criteria. This approach may see further store closures and in some cases relocation to more affordable opportunities”.
The Reject Shop closed down seven of its stores and posted a full-year net loss of $16.9 million for 2018-19 following a $16.6 million profit in the prior year.
