Shoe seller Accent Group saves by online surge

Footwear retailer Accent Group is thanking a ‘seismic’ switch to online sales for shielding it from coronavirus damage.

A Platypus shoe store in Brisbane. Picture: David Clark

Footwear retailer Accent Group says a “seismic” switch to online sales has offset the damaging impact of coronavirus shutdowns on its physical stores.

In a trading update, the company said it expects earnings before tax and interest for the 2020 financial year to be roughly 10 per cent above the $108.8m recorded in the previous financial year.

Accent, which has the local distribution rights for Hype DC, Doc Martens, Platypus and Timberland, said online sales jumped 150 per cent between April and June to date.

As at June 21, online sales represented 23 per cent of total sales for the current month. Digital sales for May were $29m.

Network like-for-like sales for May to June 21 rose 7 per cent compared to the same period in 2019.

Accent chief executive Daniel Agostinelli said the spike in online activity in the past two months has pushed its digital strategy ahead of its expected schedule.

“Through this period Accent has attracted many new customers online who have never shopped with us before,” Mr Agostinelli said.

“It is clear that there has been a seismic and most likely enduring shift in consumer behaviour.”

Accent chief financial officer Matthew Durbin said online spending has “buffered” the impact of coronavirus on traffic and sales.

Mr Durbin noted its network of Platypus stores are targeted towards an age demographic between 15 and 25, while its chains of HypeDC are positioned to 20 to 30-year olds.

Accent’s online surge coincides with research released by Illion and AlphaBeta revealing that 64 per cent of people who have dipped into their superannuation early have spent some of the money on discretionary goods.

According to the real time data, tax free super withdrawals have been spent on clothing, furniture, dining and alcohol.

Figures provided by Industry Super Australia to The Australian show if a 25-year old used their super to buy a pair of Nike Air Max 98 shoes at a retail price of $249.99, it would mean a loss of $1200 at retirement.

Meanwhile, Accent’s final operating profit for the current year was expected to include a non-cash impairment of assets of $3m to $4m, incurred as forced store closures hurt revenue.

The company said it was negotiating rent relief with landlords and would consider shutting some stores if they did not budge.

“It is important that we reach agreement with our landlords for sustainable and fair rental deals,” Mr Agostinelli said. “With landlords where this cannot be achieved, we will close stores.”

Government-imposed restrictions in Australia and New Zealand shut Accent’s 500 stores during the peak of the pandemic.

All Australian stores had reopened by May 11, followed by New Zealand stores on May 22.

Employees were able to access wage subsidy schemes in both countries.

Accent’s brands also include The Athlete’s Foot, CAT, Merrell, Skechers and Vans.