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Accent Group flags “enduring” shift to online after shutdown lifts

Accent Group has reported a significant uptick in digital sales over the past four weeks and says the shift to online shopping will last well beyond the global coronavirus pandemic.

In a trading update released to the ASX on Sunday, the footwear giant, which owns the Platypus, Hype DC and The Athlete’s Foot retail chains and several shoe brands, including Skechers, Vans and Timberland, said it expects online sales to represent a “much larger” share of total sales in the future.

“After years of investment by Accent Group in our digital team and technology, I am delighted with the growth in our digital sales,” Daniel Agostinelli, Accent Group’s CEO, said in a statement.

“It is clear that there has been a seismic and most likely enduring shift in consumer behaviour away from traditional shopping centres to shopping online,” he said.

“With 18 websites and our leading digital capability, Accent Group is capitalising on this trend. We will continue to drive digital growth as the number one priority in our company.”

Like many multichannel retailers, Accent Group closed its bricks-and-mortar stores last month, as foot traffic collapsed amid growing concerns over the spread of coronavirus and tightening social distancing measures implemented by Federal and State Governments.

But a core team remained in place to keep the online store up and running, and the company saw increased demand for footwear for essential workers, such as the Skechers range for health professionals, and active footwear and apparel during the shutdown.

Prior to stores closing, Accent Group’s average online sales were around $250,000 a day. In the last two weeks of April, they rose to between $800,000 and $1.1 million a day.

To support the surge in digital sales, the company turned its store network into ‘dark stores’, or mini-distribution centres. This has also created an opportunity for the company to trial new health and safety measures, such as hand sanitising stations and 1.5 metre social distancing.

These measures are now being implemented across the store network as the company progressively reopens to the public over the next two weeks.

“We will review and adapt these in-store measures as the environment evolves,” the company said.

As it looks to reopen stores, Accent Group has flagged the need for landlords to renegotiate rents, as foot traffic is not expected to recover for some time.

The company is seeking for rents to be calculated as a percentage of sales, meaning landlords would also share the burden of the economic crisis. While some landlords are on board, at least one major landlord is not, and the company has already announced the closure of 28 stores, where leases are set to expire over the next six months.

Agostinelli said he may be forced to take similar action for more stores in the future, and Accent Group’s strong digital capabilities may give it a competitive advantage on this front.

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