Country Road, Trenery, Mimco owner eyeing off international growth for Aussie fashion brands

The owners of Country Road, Trenery, Mimco and Witchery will invest up to $82m to open new stores and potentially expand overseas.

The South African owners of Country Road want the brand to be seen as the most admired lifestyle brand. Picture: AAP Image/Mick Tsikas

The South African owners of Country Road Group, whose fashion brands include Country Road, Witchery and Mimco, have unveiled plans to transform the business into Australia’s most admired “lifestyle brand house”, investing up to $82m to improve operations, open new stores and potentially expand overseas.

Woolworths Holdings is now more heavily focused on its Country Road Group after selling department store David Jones last year to private equity for around $100m, and is keen to expand the reach for its remaining fashion and apparel brands in Australia.

This recently saw its Witchery, Politix, Trenery and Mimco brands, as well as Country Road Kids and Country Road Home, re-enter Myer while Country Road Group has also launched a wholesale model to broaden its product reach to more regional towns in Australia.

Writing to Woolworths Holdings shareholders in the latest annual report, chief executive Roy Bagattini said Country Road Group would now play a bigger role within the South African company’s performance and this would be backed by fresh investment in its back-office operations.

Mr Bagattini said after the sale of David Jones, Country Road Group was now able to realise the full potential of its existing brands. Picture: AAP Image/Mick Tsikas

This would be backed up by more investment in its Australian fashion chains.

“In the case of Country Road Group, there is significant runway for the business to more fully leverage its competitive advantages – its strong brands, leading omnichannel capabilities, and its sourcing and distribution scale, allowing it to fulfil an even greater role within the Woolworths Holdings Group,” the report said.

“As is the case in our Woolworths business, this will be supported by an investment upwards of 1bn rand ($82.3m), most notably in back-end capabilities, which will unlock further synergies and efficiencies to improve profitability across each of the brands and the Country Road Group stable as a whole.”

Mr Bagattini said after the sale of David Jones, 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.

Woolworths Holdings has now set itself the goal for the Country Road Group to be “the most admired Australian Lifestyle Brand House”.

“Central to this is unlocking the full potential and value of our existing brands by accelerating the growth of Country Road, which continues to perform exceptionally well, scaling Trenery, stabilising and growing Witchery, consolidating Mimco, and relaunching and growing Politix,” he said in the report.

“Our strategies will be enabled through the creation of a common platform of capabilities across our brands, delivered by an agile operating model to ensure that both our systems and processes support our growth trajectory.

“We are building a world-class distribution network to facilitate the growth of our brands.

“This includes rationalising unproductive space, opening new stores and pop-ups in strategic locations, and investing in refurbishing our existing stores to ensure our brands provide our customers with a unique, differentiated, and compelling in-store experience.”

This could see an end to Country Road Group’s strategy of reducing space – in the last three years it has cutting floorspace by 10 per cent.

“We are now in the position to once again pursue space growth in our apparel business, which we will do in a considered and deliberate manner. This includes ensuring relevance in both format and location and, to this end, we have identified several opportunities across each of our businesses, primarily in the convenience and smaller format space, which we are actively pursuing,” Woolworths Holdings said.

The annual report said Country Road Group would explore channels and new markets to attract new customers, which could include an offshore expansion for its flagship Country Road label.

“Recently, for example, we re-entered Myer, Australia’s largest department store, and launched a wholesale model which broadens our product reach to more regional towns in the country. We are also exploring the potential for entering new markets through international expansion, particularly for the Country Road brand.”

In 2023, Country Road Group sales grew by 12 per cent and by 12.4 per cent in comparable stores, underpinned by strong growth from the Country Road, Politix, and Witchery brands. While sales growth in the second half slowed to 0.6 per cent, it remained ahead of the market. Adjusted operating profit increased by 25.6 per cent to $151m.