Kogan to re-assign staff from struggling division

Dean Blake

20th Nov 2018

Kogan.com last week reported 15.7 per cent growth in its exclusive brands division in the first quarter of FY19, but ongoing challenges in its global brands product division may see the online retailer re-assign staff to reduce overheads, which have grown faster than revenue as a result of increasing marketing costs, warehouse costs, and the cost of employees.

“Given the challenging conditions in the Global Brands Product Division, we may look to re-assign staff to support our growing business divisions,” Kogan.com founder Ruslan Kogan said at the company’s annual general meeting last week.

Kogan’s global brands product division saw a 27.4 per cent decline in revenue year on year in the September quarter, with sales in global brands down 48.4 per cent in October compared to last year.

“There’s no doubt that the GST fraud environment is somewhat of a challenge for our Global Brands Product Division,” Kogan said, echoing claims made by the brand in October, which led to a 32 per cent drop in shares.

While gross margin declined year-on-year during the September quarter, it saw an improvement across October to levels above those seen last financial year.

The business has seen its consumer base continue to grow. Kogan reported year-on-year growth of 37.9 per cent, or 1.4 million active customers, as of 31 October.

The retailer’s partnership with Vodafone has allowed the creation of Kogan Mobile and Kogan Internet, two verticals the brand expects growth in over the course of the year.

Kogan Insurance is seeing organic growth after its launch in early 2018 and the addition of pet insurance, life insurance and funeral cover in April.