Country Road Group sales have continued to dive

Country Road Group has continued its sales dive, now down more than 13 per cent as the tough trading environment slams the brakes on fashion shopping.

A Country Road flagship store is Sydney's CBD. Picture: Britta Campion

Country Road Group has revealed a marked worsening of falling sales since July as a tough trading environment, frugal shoppers and tighter household budgets put the brakes on fashion and apparel shopping.

In a trading update to the market, its South African owner Woolworths Holdings said Country Road Group’s sales for the 18 weeks to November 3 had declined by 8.8 per cent and by 13.8 per cent on a same-store basis.

This is much worse than the results for fiscal 2024: in July Woolworths Holdings said sales for Country Road Group were down 6.8 per cent for the year, by 8 per cent on a comparable 52-week period and down 13.1 per cent in comparable stores.

Woolworths Holdings blamed the struggling Australian economy for the continued downward trajectory of its Australian fashion house, as well as ongoing restructures for its key fashion labels.

“In Australia, however, the sustained effect of high interest rates and elevated living costs continue to weigh on both retail footfall and spend,” it said.

Country Road Group, which was engulfed in a workplace scandal this year involving bullying and sexual harassment, owns Country Road, Mimco, Witchery, Trenery and Politix.

In 2022 Woolworths Holdings sold department store owner David Jones to private equity group Anchorage for $100m, having originally bought the business for $2.1bn in 2014.

This left it with the Country Road Group, and without the bulk of the David Jones stores has led to higher costs for its remaining Australian business.

Like other fashion retailers it is struggling to keep sales positive.

“Trading conditions in Australia and New Zealand continue to prove more challenging than anticipated, with the retail sector facing further declines in footfall (albeit that the pace of decline is easing), intense promotional activity, and the shift of spend towards value brands,” Woolworths Holdings said. “Notwithstanding the challenging macroeconomic backdrop, the Country Road brand remains resilient, and Trenery is delivering strong top-line growth.”

The company said it remained focused on improving the positioning and performance of the other brands, particularly Witchery, which are at different stages of their respective repositioning.