Katies, Rivers owner to swing axe on jobs, closes 300-plus stores

MORE than 1000 workers are expected to lose their jobs as the owner of fashion chains Katies, Millers and Rivers closes more than 300 stores.

Specialty Fashion Group chief executive Gary Perlstein.

THE group behind Katies, Millers and Rivers will close hundreds of stores as another traditional fixture of the nation’s retail scene falls on hard times.

SPECIALTY FASHION CHIEF GARY PERLSTEIN HAS NO REGRETS ON RIVERS PLUNGE

Speciality Fashion Group, whose stable of brands also includes City Chic, Crossroads and Autograph, has announced plans to close more than 300 stores as international competition, online shopping and subdued consumer spending takes its toll.

Anne McDonald, who chairs the group’s board, said on Tuesday the loss-making retail group would reduce its network from 1019 to about 700 stores — shutting close to one in every three — by 2020.

The bulk of the closures will happen next year, Ms McDonald told investors at the group’s annual meeting in Sydney on Tuesday.

Speciality Fashion, which was also hit with a swinging “first strike” against its executive remuneration report on Tuesday, did not provide further details around which stores will close.

It also declined to say how many employees would be affected, but at a strike rate of almost one in three shops, more than 1000 jobs are likely to be at risk.

Specialty Fashion Group, which owns Katies, employs 5000 people and has closed 76 stores over the past three years.

The group employs 5000 people and has closed 76 stores over the past three years.

Ms McDonald said the company was taking action to confront “subdued consumer confidence impacting discretionary expenditure and increasing competition, both from international and online retailers”.

“Store rationalisation is a key and immediate focus,” she said. “While we have made some progress in optimising the store portfolio, we are taking actions to more quickly reduce our store footprint.”

Losses at Speciality Fashion blew out to $8.39 million during the year to June as it took deep writedowns after deciding to close its fleet of City Chic stores in the US.

That sum was more than triple the $2.19 million loss it suffered the previous year.

Shares in the group — which was being eyed for takeover by an investment company controlled by the Qatari royal family earlier in the year — have more than halved over the past year.

In October, the group warned investors its underlying earnings were expected to halve during the year to next June.

Specialty Fashion Group chief executive Gary Perlstein.

Chief executive Gary Perlstein last week announced he was stepping down after 14 years at the helm.

On Tuesday, he said that while Specialty Fashion had made strong progress on operational issues, there was no escaping the fact trading conditions had been challenging. “The group is striving to be agile in navigating these conditions and is accelerating our change program,” he told shareholders.

“As a significant investor ... I am a believer in the long-term opportunities for the business.”

Almost 52 per cent of shareholders voted against Specialty Fashion’s remuneration report, easily clearing the 25 per cent hurdle needed to deliver a first strike.

If shareholders reject the remuneration report at next year’s annual meeting — delivering a second strike — they can then vote to spill the board.

Speciality Fashion is one of many traditional bricks-and-mortar retailers struggling to maintain their footings as international brands enter the nation and new online competitors emerge.

Shares in Specialty Fashion shed 2.5 per cent on Tuesday to close at an all-time low of 19.5c.

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