Super Retail posts solid Q1 sales growth

The Supercheap Auto chain has become one of the first hit by Masters’ $500 million fire sale.

Supercheap Auto retail chain has witnessed slowing sales in tools.

Super Retail Group has outed itself as one of the first casualties of the $500 million fire sale triggered by the planned closure of Woolworths failed hardware chain Masters, telling investors today that its Supercheap Auto retail chain has witnessed slowing sales in tools due to the Masters clearance activity.

Meanwhile, Super Retail will also be without the services of former finance director of furniture group Harvey Norman and current chair of embattled law firm Slater & Gordon, John Skippen, who unexpectedly stepped down as a director of Super Retail at the AGM.

Mr Skippen stepped down from the board after lacklustre support from shareholders at the AGM, as 49.245 million shares were voted in favour of his re-election as a Super Retail director but 38.55 million were voted against, with 66.7 million shares abstaining.

Crucially for Australia’s $40 billion hardware sector it now looks as though the Masters shutdown and fire sale is triggering ripples.

Addressing shareholders at the AGM, Super Retail chief executive Peter Birtles confirmed the $500 million worth of stock being liquidated at Masters was squeezing sales for its auto retailer, Supercheap Auto.

“Sales performance in the automotive categories within the Supercheap Auto business has been solid, however, competitor clearance activity in the hardware retail sector has had a negative impact on sales in the businesses’ tools category,’ Mr Birtles said.

Masters is slated to close its doors on December 11.

Only two months ago Richard Goyder, the chief executive of Perth-based conglomerate Wesfarmers, which owns leading hardware retailer Bunnings, said the Masters fire sale was likely to lead to some “turbulence” as it washed through the sector.

Led by specialist firm GA Australia, which has provided an underwritten recovery for the value of Masters inventory, the fire sale kicked off recently and is causing some headaches among rival retailers and hardware specialists as the Masters stock is dumped on the market.

Bunnings will release its first quarter trading results on Wednesday, with analysts and investors keen to see if the Masters fire sale has dented Bunnings sales growth for the period.

But sport and leisure goods vendor Super Retail says it has still made a solid start to the 2017 financial year with all of its three divisions achieving sales growth.

Its Amart Sports and Rebel stores sport division reported sales growth of 7 per cent, with crucial like-for-like sales, which strip out store openings and closures, rising 4.5 per cent during the first three months of the financial year compared to the same period 12 months ago.

Sales from its auto division, dominated by Supercheap Auto, grew 3.5 per cent, with like-for-like sales up 2.5 per cent, while sales from its leisure division (BCF and Rays) lifted 1.5 per cent with like-for-like sales up 6 per cent.

with AAP