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HomeFashionFashion retailers Accent Group and Mosaic are posting solid sales

Fashion retailers Accent Group and Mosaic are posting solid sales

Owners of some of Australia’s biggest fashion brands have reported strong trading results for the December half, with Accent Group (ASX:AX1) and Mosaic Group (ASX:MOZ) both enjoying a sales boom over the holiday season.

Accent Group said revenue rose 39 percent year-over-year to $825 million, although the increase would have been just 33 percent without an additional week of trading.

That extra week brought in an additional $10 million, a significant portion of the $90-$92 million EBIT expected for the first half.

Accent Group shares rose 11 percent this morning on the news, which comes a week after retailers JB HiFi (ASX:JBH) and Super Retail Group (ASX:SUL) also had successful campaign periods during the Christmas period.

The positive results stand in stark comparison to the struggling plus-size fashion retailer City Chic He expects a loss of $2.5 million to $4 million in the December half after revenue slumped on key selling events.

The Accent Group also noted that January trading was in line with expectations, including a continued rebound from weaker trading last year.

“Trading conditions in November and December continued to be very positive and consistent across Accent Group’s retail and wholesale banners. Fresh new product shipments throughout the first half of the year and in the run up to Christmas helped drive sales higher than expected,” said Accent Group CEO Daniel Agostinelli.

“Despite the currency impact and the clearance of discontinued brands, we are pleased with the improvement in gross margin compared to the previous year.

“Overall, inventories are clean and well positioned for the start of the second half, reflecting a strong inventory position in core lines and early shipments of wholesale products for sale in the second half.”

Another Australian retailer experiencing a sales boom is Mosaic Brands (ASX: MOZ), whose profit doubled year-on-year to reach $15.8 million. At 23 percent, sales growth was not quite as pronounced as at the Accent Group.

The clothing retailer, whose portfolio includes Noni B, Katie’s and Millers, also announced that it will open 130 new stores over the course of 2023 and expects its online segment to reach up to eight million products by the end of the year.

While the company is yet to reach pre-pandemic levels for in-store shopping, Mosaic Group CEO Scott Evans said the number continues to rise month-on-month, with customers also spending more on an average transaction basis.

Online-only retailer EziBuy, in which Mosaic acquired a 49.9 percent stake two years ago, saw sales fall 51 percent, but the group noted it expects trade to improve towards the end of the second half will, as operational improvements have been introduced.

“Consistent with our last update in November, Mosaic’s retail recovery continues to gain momentum as customers increasingly return to shop in-store after three years severely impacted by COVID,” Evans said.

“While not yet at pre-pandemic levels, in-store shopping continues to increase month-on-month, with customers also spending more on an average transaction basis.

“This result underscores how Mosaic has transformed tremendously to not only weather the other side of COVID, but to become a stronger and more sustainable company in a very different retail environment than it was three years ago.”

Mosaic appoints new director

In connection with the trading update, Mosaic Brands also announced that Quentin Gracanin, CEO of Spotlight Retail, will join the group’s board of directors as a non-executive director effective February 22, 2023.

Gracanin spent 12 of his 30 years in retail as CEO and board member of private company Spotlight Retail.

“Spotlight was a key supporter of Mosaic’s 2021 capital increase in the depths of managing COVID,” said Richard Facioni, Mosaic chairman.

“As the group’s turnaround accelerates, Quentin brings a deep understanding of retail operations to augment the board’s existing expertise.

“We welcome Quentin to the Board of Directors and look forward to working closely with Spotlight, one of Australia’s leading retailers, and Quentin to drive shareholder value.”

Shares of MOZ are up 3.5 percent at 30 cents a share as of 11:55 a.m. AEDT.

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