Cotton On owner Nigel Austin strikes gold as earnings hit $501m

The retail chain mostly owned by quiet billionaire Nigel Austin is booming, making it one of the most profitable in the country.

Cotton On sold $335m of retail apparel in North America, up from $233m in 2021, to make that region its biggest outside of Australasia. Picture: Steve Pohlner

Cotton On, one of the country’s largest fashion retailers, has defied the gloom in the sector to double its profits and pay its reclusive owner a big dividend.

Earnings reached $501m for the retail chain mostly owned by billionaire Nigel Austin, making it one of the most profitable Australian retailers in recent history.

Net profit more than doubled to $126.4m as revenue surged to $2.13bn, the company’s most recent financial report, obtained by The Australian, reveals. The Cotton On results compared to a $61m net profit in 2021 and revenue of $1.32bn.

Mr Austin took home most of the $56.48m dividend that Cotton On paid during the financial year.

Financial accounts lodged by Cotton On’s parent company COGI with the regulator for the year to June 26 show the sheer scale of the company that now employs 18,000 people and has 1500 stores in 22 countries. Cotton On made pre-tax profits of $153m, up from about $83m last year, and the company has almost $1.6bn of total assets.

Nigel Austin has spent the last two years tidying up Cotton On’s corporate structure.

While its retail outlets have been hit by three successive years of pandemic shutdowns, a note in Cotton On’s accounts said its “omni channel capabilities, and the strength of its customer loyalty program has enabled it to pivot between channels to meet customer demand through home delivery and click and collect”.

While Cotton On has been a big success as a private company and made profits across three decades, Mr Austin has spent the last two years tidying up Cotton On’s corporate structure, bringing in a string of entities and trusts all under the COGI banner.

That has led to speculation that Mr Austin could be considering an initial public offering and that the company has been fielding plenty of approaches from investment bankers.

Mr Austin started his career aged 18 by selling denim jackets from the boot of a Ford Bronco at the Beckley Market in his hometown. Cotton On has since become a ubiquitous presence in shopping malls and high streets.

The success of Cotton On means Mr Austin is a prominent member of The List – Australia’s Richest 250. His wealth was estimated at $2.01bn when 2022 figures were published in March.

Cotton On sells casual dresses, T-shirts, jackets, jumpers, activewear, underwear, shoes and accessories in more than 600 stores across Australia.

It has also expanded around the world, and the group owns accessories and footwear brand Rubi, stationery chain Typo and youth fashion business Factorie.

The accounts also show the breadth of its international expansion. It had about $1.2bn sales in Australia and New Zealand during the year, with revenue from businesses in other parts of the world now approaching $1bn.

Cotton On sold $335m of retail apparel in North America, up from $233m in 2021, to make that region its biggest outside of Australasia. Sales reached $206m in Asia, $200m in Africa and about $49m in other regions.

Nigel Austin enjoying a day at the race track.

While Mr Austin has owned horses that have raced in the Melbourne Cup and watched on from the mounting yard, the 47-year-old has deliberately shunned the spotlight for decades after opening his first store in 1991.

That strategy has extended to Cotton On and its associated entities being spread across a labyrinthine collection of corporate entities in Australia and abroad, all eventually owned by Mr Austin and cousin Ashley Hardwick.

The COGI accounts says it consolidates Cotton On International, Brandnine and other Brandnine entities, the Cotton On Clothing Trust, Cotton On Body Unit Trust and several unit trusts for Cotton On Kids, Factorie, Rubi Shoes, Typo and T-BAR. Other subsidiaries include Supre Holdings and Supre NZ.