Best & Less admits to being late off the mark for online shopping

Best & Less chief executive Rodney Orrock concedes the general merchandise retailer was late to the party when it came to online shopping.

Best & Less Group said its online sales for the 12 months were up 80 per cent to $57m, representing 9.1 per cent of total sales.

Best & Less chief executive Rodney Orrock concedes the general merchandise retailer was late to the party when it came to online shopping, having only kickstarted a click-and-collect service last week, but with a string of profits behind it the chain could be lined up for a sharemarket float soon.

Private equity-backed general merchandise retailer Best & Less Group, which includes clothing, baby and kids wear chain Postie in New Zealand, has reported that in the year to November 30, it generated total sales revenue of $629m, with like-for-like sales growth of 8 per cent and total sales growth of 2.9 per cent.

Bought by Allegro Funds last year from the teetering Steinhoff International, Best & Less Group said its online sales for the 12 months were up 80 per cent to $57m, representing 9.1 per cent of total sales.

The local subsidiary of Steinhoff, Greenlit Brands, sold off a range of businesses including Best & Less and plus-sized women’s brands Postie to Allegro last year as part of the clean-up of the Steinhoff operations in the ­region. While Allegro bought ­department store Harris Scarfe (also from Steinhoff), that business was quickly put into administration whereas Best & Less had managed to string together a few years of profitability despite the highly competitive nature of the general merchandise sector, which is dominated by a few national chains such as Target, Kmart and Big W.

Mr Orrock said Best & Less was “highly profitable”, although he would not disclose the levels of those profits, and that the chain was a strong competitor.

“I think we are a specialty apparel retailer in the value sector for the family,” Mr Orrock said. “Our focus is 100 per cent on clothing mum and her family and her kids, and from that perspective we bring a real capability to that product set.

“We have a 55-year relationship with mum and her family, and we have generations of mums that have shopped with Best & Less. So the [competing] discount department stores do a lot of other things, and as a consequence of that where we really excel and where we differentiate is [being] very strong on value and very strong on what value means in both quality and price where it sits around clothing.”

Between 2017 and 2020, online sales for Best & Less grew 50 per cent in terms of compound annual growth rate, as the business invested in digital initiatives including click-and-collect.

Click-and-collect was only launched this month, and Mr ­Orrock conceded it was late.

“Last week we launched click-and-collect and early next year we will bring a mobile application into the market place,” he said.

“But we are working hard on it and obviously understand the ­attraction that ‘mum’ has in the importance of the mobile device.

“We are very late to the party. And I think as a value retailer you take things, when it comes to how you set up your inventory profile, how you service that customer appropriately and you want to make sure that you have things nailed down like the availability of product, that it is a service ­addition not a service distraction.”

Mr Orrock said no decision had yet been made with regards to an IPO of the group, although he said financial advisers had been appointed.

“We are certainly assessing what our future capital infrastructure needs to be, the options that we need to fund our growth strategy,” he said. “Part of that whole conversation is that there is a potential for an IPO.”