That 0.9% jump in retail sales in November certainly didn’t help too many retailers, judging by the death toll since then.
Some enthusiastic analysts saw the rise as being ‘good news’ but the harder heads saw it as representing the impact of the so-called ‘Black Friday’ sales trend at the end of the month (mimicking the huge traditional US sales push after Thanksgiving).
Denim specialist, Jeanswest joined that list of victims yesterday with KPMG had been appointed as voluntary administrators of the retailer’s Australian operations. Overseas outlets are not included in the administration.
The collapse takes the list of failures in Australian retailing in the past year to more than one a month.
KPMG’s Peter Gothard and James Stewart will oversee the process, with the business seeking to “restructure”.
Jeanswest opened its first store in Perth in Western Australia in 1972, and up to yesterday employed 988 people in 146 stores across the country.
KPMG partner Peter Gothard said Jeanswest will “continue to operate while the administrators conduct an urgent analysis of the business”.
“The administrators will be looking at all options for the restructure or sale of this established Australian retail business and are seeking urgent expressions of interest from parties interested in acquiring or investing in the business,” he said.
On January 7, Harris Scarfe, which collapsed in late 2019 confirmed that it would be shutting 21 of its stores across five states, then McWilliams Wines (which has been under financial pressure for the best part of three years) collapsed and was put into voluntary administration, ending more than 140 years of family ownership.
Women’s fashion chain, Bardot fell over late last week and will be shutting 58 stores across the country by the end of the first quarter. On top of that EB Games is closing at least 19 of its outlets in the next couple of weeks after it ran into problems.
On Monday it emerged that Curious Planet, the renamed Australian Geographic will be closing 63 outlets after its parent, Co-op Bookshop, failed to find a buyer.
Besides Harris Scarfe in December, other failures in 2019 included men’s retailer, Ed Harry, Skins, the Australian sportswear group, Napoleon Perdis, the beauty empire with 58 outlets; Shoes of Prey, a women’s footwear group, Karen Millen, the British fashionwear group is shutting down its local presence, as is UK retailer, Debenhams.
Dimmeys, a small Victorian based retailer also collapsed, as did a leading fitness group and a couple of small food chains.
The factors common to these collapses include reduced support from customers whose spending slowed sharply in 2019 as wages growth stagnated and living costs continued to edge higher. The retailing bloodbath has arrived despite the lob jobs boom that started in 2016, still creating new work for Australians (the December jobs report is out a week today – next Thursday).
On top of that many customers moved deeper into online buying with older consumers joining their children in seeking bargains from internet based retailers.
While many analysts point the finger at the arrival of Amazon.com, other retailers have fixed up their online offerings and are fighting back. Coles and Woolies both sell more than $1 billion a year each on line across food and other products.
Department store chains like Myer, David Jones, Kmart, Target and Big W are doing it tough as well as sales growth disappears and the reluctance of consumers to spend sees continual discounting and margin erosion.
And on top of this there’s the impact of the bushfires. Mosaic Brands, which controls Millers, Noni B and Rivers among a clutch of female skewing fashion brands, revealed this week that its first half sales will see an 8% slip on a comparable sales basis because of the impact of the fires. That’s despite gross profits rising 32% for the half year and the company maintaining dividends.
