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E-commerce

Review to launch new site, open on Amazon

Women’s apparel retailer Review will launch on a new ecommerce website in the coming weeks as part of a broader push from parent PAS Group to bolster the brand’s digital credentials in the new year.

Review will also launch on Amazon’s Australian marketplace and on Alibaba’s Tmall platform in the next month, PAS Group, which also owns swimwear brand JETS and wholesaler Designworks said in a trading update yesterday.

Review’s new website will emphasise ease-of-shopping and enabling transactions with foreign currencies as part of a broader ambition for the brand that could see it launch into other international markets in Asia and America in the coming years.

The announcements cushioned a downgrade in PAS’ earnings guidance, with the dual wholesale/retailer saying that difficult trading conditions have persisted over Christmas.

PAS now expects first-half earnings before interest, tax, depreciation and amortisation (EBITDA) of between $8 and $8.5 million, around 28 per cent lower than the $11.6 million in earnings it booked for the first-half of FY17.

The guidance includes $1 million in non-recurring costs relating to Coliseum Capital’s takeover bid, strategic consulting costs and an unfavourable NZ customs duty ruling.

Like-for-like sales in the Review and Black Pepper businesses were down on last year in the first eight-weeks of FY18, but the company did not specify how its individual brands performed over Christmas.

In an interview with Inside Retail Weekly to be published today, PAS CEO Eric Morris said the local apparel landscape is undergoing substantial cyclical and structural changes as international players continue to exacerbate ailing consumer conditions.

“There are the somewhat economic…energy prices and various other household costs which are going up,” Morris said.

“Then structurally there’s a big shift with the way people are shopping and how they’re researching online, gone are the days that there was a captive market.”

In response Morris believes PAS needs to embrace market changes with open arms, hence the deals with Amazon and Alibaba.

PAS has brought on Boston Consulting Group to begin testing Review products in the states, a market that its swimwear brand JETS already trades in.

“It looks quite encouraging, but we’re not at a stage yet where we can definitely say we’re launching in the US – we’re still researching it,” Morris said.

PAS also today announced that Designworks has secured a distribution license for UK-based sportswear brand Lonsdale, with shipments to be delivered to its major retail partner Target before the end of the month. Further negotiations are ongoing for the acquisition of a further ‘major sports brand’, which Morris said could be announced as soon as next week.

It follows Designworks winning a tender to design and supply Coles’ new range of apparel for its women’s Mix program, which is expected to deliver $15-20 million in revenue annually starting in FY19. Morris expects the initiatives to put the wholesale arm of the company on better footing, after it booked a 9.5 per cent decline in revenue in FY17.

Although the Lonsdale and Coles arrangements will do little to bolster FY18 prospects, Morris said.

“Unfortunately, a lot of things don’t necessarily affect this financial year, there’s a small element of Lonsdale that comes into this year, but the big full-year effect is FY19, Coles also comes into FY19 – from a future perspective there’s a lot happening,” he explained.

“In apparel it takes time.”

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