Country Road Group sales dive as retail slows

The South African owners of Country Road Group say the sombre conditions now engulfing the retail sector have worsened, with its own sales growth collapsing.

The South African owners of Country Road Group, whose stores include Country Road, Witchery and Mimco, say the sombre conditions in the retail sector have deteriorated to the point where its fashion chains are suffering a double-digit collapse in sales growth.

Country Road Group sales have slumped to a 10.7 per cent decline over the 20 weeks to mid-November, compared to the healthy 12.4 per cent same-store sales growth witnessed over fiscal 2023.

Woolworths Holdings, the South African owners of Country Road Group and former owners of department store David Jones, said in an update to its local market that their fashion outlets had succumbed to the deteriorating conditions across the Australian retail sector.

“The difficult trading conditions in Australia and New Zealand which arose in the second half of the prior financial year, and which affected the entire retail industry, have softened further throughout the current period, resulting in a marked decline in retail sales, across both store and online channels,” Woolworths Holdings said.

At its full-year results Woolworths said sales growth for Country Road Group had slowed to just 0.6 per cent in the second half.

When Woolworths sold DJs last year to private equity firm Anchorage Capital Partners for around $100m, it kept Country Road Group, which also houses Trenery and Politix.

The stable of fashion stores had improved greatly over 2022 and 2023 but now its sales growth has collapsed with a sharp sales decline.

The Woolworths Holdings trading update reported that for the first 20 weeks of fiscal 2024, Country Road Group sales declined by 8.1 per cent and 10.7 per cent in comparable stores.

“This should be seen in the context of a particularly high prior-period base in which sales grew by 36.2 per cent, driven by a strong recovery post the Covid-impacted lockdowns.

“The Country Road brand continues to deliver a market-leading performance across key categories.

“We are making good progress in the expansion of our wholesale and concession offering, in support of our growth agenda,” Woolworths Holdings said.

Last month Woolworths Holdings unveiled plans to transform its remaining Australian fashion business into Australia’s most admired “lifestyle brand house”, investing up to $82m to improve operations, open new stores and potentially expand overseas.

It has been expanding its reach into other retailers to recently launch its Witchery, Politix, Trenery and Mimco brands, as well as Country Road Kids and Country Road Home, and re-enter Myer. The group has also launched a wholesale model to broaden its product reach to more regional towns in Australia.

Woolworths Holdings chief executive Roy Bagattini said that after the sale of DJs, Country Road Group was now able to realise the full potential of its existing brands and explore new growth opportunities in line with its strategic objective.