SFG bolsters e-commerce offer

Matthew Elmas

6th Feb 2018

Specialty Fashion Group stands on the precipice of becoming the first national retailer to offer cross-brand click-and-collect services after finalising the move of its suite of fashion brands into a new state-of-the-art distribution centre in Sydney.

The ASX-listed apparel giant is now fully operational as the anchor tenant of Toll Group’s new 32,000sqm automated DC, located in Sydney, after announcing its intention to aid the logistics business with the construction of the site in 2016.

With the $160 million site now complete, SFG’s general manager of logistics Alex Linton said the company has the capability to enable customers to order products online from one brand, such as City Chic, and collect it at a Rivers store, vice versa.

“The whole process is significantly quicker,” Linton said, adding that orders can now be processed within 30 minutes. “We’ve stepped up the way we handle click-and-collect and deliver it into our stores.”

Discussions with individual brand leads across the group – which includes Katies, Millers, Rivers, City Chic, Autograph and Crossroads – will now be undertaken with an eye on bedding down a plan to implement the service.

Aided by the new DC, the company is also now able to prioritise orders placed by loyalty program members, with Linton explaining that VIP orders can be pushed through quicker than others.

It comes amid a flurry of investment from Australian brands in more sophisticated online offers that can capture fast-growing demand for online shopping.

Linton said that retailers who haven’t invested in better fulfilment capabilities in the last few years are now on the back-foot and could struggle to keep up.

“Anyone that isn’t now where we are is on the back foot in the retail market, we saw that the requirement was there for unit level activity, whether that’s fulfilment to stores or ecommerce, we saw that three-four years ago and that’s why we started the project back then,” he explained.

SFG’s competitors are moving quickly to expand their own digital offers, with women’s fashion brand Cue launching three-hour delivery under a store-based fulfilment model last month.

Lenton said SFG had no current plans to launch three-hour fulfilment, saying that free delivery and click-and-collect were bigger priorities with its customers.

“The key thing is delivering what the customer wants [and] our customer isn’t telling us they want three-hour delivery,” he said.

Toll expects to recruit more retailers to lay down roots at the distribution centre, which is able to pack 70 million items per year, or 133 every minute.

Toll Global logistics president Chris Pearce said there’s more than $50 million worth of “advanced automation technology” within the centre, claiming that the facility is one of the most advanced DCs in the country.

“Retailers will benefit from the ability to deliver goods to their stores and direct to customers faster and more efficiently…this advanced automation technology will increase our productivity fivefold,” he said.

SFG made the decision to invest in the Toll DC under outgoing CEO Gary Perlstein, who has previously flagged the partnership as a key initiative for the company, which has been struggling to keep up with retail’s digital transition in recent years.

Perlstein is due to step down later this month though after he was linked to a take-over offer for the Group in the wake of a profit warning last October that foreshadowed another earnings hit due to persistently slow trading.

As of its latest guidance ahead of half-year reporting later this month, SFG expects underlying earnings before interest, tax, depreciation and amortisation to be between $14 – $17 million, compared to $30.4 million last year.