Cotton On’s big profits and worldwide operations revealed for the first time

Reclusive Geelong billionaire Nigel Austin has built one of the biggest Australian retail success stories in recent decades, accounts reveal.

Nigel Austin at the Cotton on Marquee for the Geelong Cup.

A rare spotlight has been thrown on one of Australia’s biggest but most secretive retailers, revealing for the first time the big pre-tax profits and revenue being generated by the Cotton On clothing chain.

Founded by low-profile Geelong billionaire Nigel Austin, who started his career aged 18 by selling denim jackets from the boot of a Ford Bronco at the Beckley Market in his home town, Cotton On has become a ubiquitous presence in shopping malls and high streets across Australia.

Cotton On sells casual-style dresses, T-shirts, jackets, jumpers, activewear, underwear, shoes, sleepwear and other fashion 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.

While he has owned horses that have raced in the Melbourne Cup and watched on from the packed mounting yard, the 46-year-old Austin has deliberately shunned the spotlight for decades after opening his first store behind a butcher’s shop in 1991.

Nigel Austin has kept a low profile since starting Cotton On.

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 usually and eventually owned by Mr Austin – a member of The List – Australia’s Richest 250 – and cousin Ashley Hardwick.

But financial documents lodged for the first time with the corporate regulator, just before Christmas, reveal the extent of Cotton On’s national and international success and give the most extensive picture yet of Austin’s retailing success.

The maiden accounts lodged for a company called COGI Pty Ltd (named Cotton On Group Investments Pty Ltd until last July and only formed in June 2019) show a group that has almost $300m in pre-tax profits and revenue of more than $1.2bn across Australia and around the world.

COGI made earnings before interest and tax, depreciation and amortisation of about $295m for the year to June 24, 2020 from revenue of $1.25bn, according to the accounts.

A depreciation, amortisation and impairment expense of $221m was a big contributor to profit before tax, being about $13m after finance costs of almost $62m. After paying corporate taxes of about $24m, the group made a statutory net loss of $11.4m.

The accounts show the breadth of Cotton On’s international presence. About $275m of the group’s revenue came from Asia, the biggest source internationally, though that figure was down from almost $320m in 2019.

Another big source was the US, which accounted for $213m including wholesale income, a slight increase on the previous year, while revenue in Africa was $185m. But the African result was down from $205m revenue in 2019. Other territories increased about $10m to $44m for the group’s 2020 financial year.

Typo Queensland area manager Karley Duff. Picture: Adam Head

COGI has about $150m in cash on its balance sheet and bank loans of about $189m. It has total assets of almost $1.4bn and net assets of about $120m after liabilities.

A spokeswoman for Cotton On would not comment on the accounts other than to say they do not reflect the performance of the group in its entirety.

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

The financial document COGI lodged with the Australian Securities and Investments Commission says the business employs about 15,700 people.

Cotton On has claimed it has more than 20,000 employees in total, which suggests about 75 per cent of the group’s operations now fall under the COGI umbrella and all of the international operations of the group.

Another entity solely owned by Mr Austin, which mostly receives dividend payments and is listed as an entity with an ownership stake in COGI, has net assets of more than $300m, according to its last financial report lodged with ASIC.