Retailer Country Road Group has recorded a record profit in the first half of the financial year, as the company reaps the benefits of its acquisitions of Witchery and Mimco.
With its net profit after tax up a massive 71.7%, its first-half profits surged to $38 million.
The company projects improved earnings for the full-year, although its growth will slow in the next half.
The company is very much bucking the current retail trend which has seen many retailers struggling.
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All four of the Country Road Group brands recorded their most successful summer trading performance ever, with sales up 27.4% to $422 million across Australasia and South Africa.
Comparable sales were also on the rise, lifting 6.6% overall.
Country Road chief executive Ian Nairn told SmartCompany the underlying performance of the brands was “very good” in the last half.
“We certainly see the customers spending a bit more, but we know we’ve also taken market share. It’s a very tough sector, but we have positioned our brand effectively… The strategies we believed we could deliver combining the brands has proven effective,” he says.
“One of the major reasons for our success is our omni-channel approach. There was a time when I thought systems weren’t the key to success in retailing, but now I know they are. A customer can come into any of our stores and we’ll find the stock in real-time and have it delivered to them.”
Nairn says Country Road implemented initiatives over Christmas and ran special promotions to make the stores more attractive for women.
“The next half will be pretty exciting. We’ll continue to focus on our omni-channel strategy and store rollouts, which will give us growth potential,” he says.
“We’re also launching Witchery and Mimco into South Africa at the end of March. Woolworths South Africa is our 88% shareholder, so there are lots of people on the ground there who understand the business. It also has a booming economy with strong growth similar to ours.”
Nairn says being from the southern hemisphere will also give the brands an advantage in South Africa because of the similar weather patterns.
“We can do a better job there than northern hemisphere businesses,” he says.
“We’ll also be doing a whole series of events for Country Road’s 40th birthday this year.”
Country Road is also set to continue with its omni-channel approach, with Nairn saying it is still the future of retail.
“Definitely omni-channel, but it’s not just about digital. It’s about understanding the customer, how they live, how they work and how they play and how we can fulfil their needs. Digital and social just happens to be a big part of that.”
Another brand outperforming other retailers is JB Hi-Fi, as its results revealed yesterday, the technology and appliances retailer lifted its profits by 10% to $90.3 million.
The brand’s total sales jumped by 6.8% and its comparable sales lifted by 2.8%.
Senior commercial director at Global Reviews, Che Carbis, told SmartCompany last month the retailer’s success was because consumers believed the retailer was price competitive and trustworthy, resulting in loyal customers.
“This is not to say that other retailers are not price competitive or trustworthy, but as JB Hi-Fi was the top preferred site (according to a study by Global Reviews) these were the main reasons for people selecting them and what people recognise them for,” Carbis says.