Rebel Sport and Supercheap Auto owner Super Retail Group has told investors it intends to buckle down and focus on growing its core business following a rocky period marked by two underpayment scandals and a $135 million acquisition.
The company, which also owns BCF and Macpac, is also embarking on a digital-first refit of its business as it seeks to sidestep the pain being felt by many bricks and mortar retailers.
Super Retail Group, the owner of Supercheap Auto, has laid out plans for a digital refit.
Speaking to The Age and The Sydney Morning Herald following the company's investor day on Friday, chief executive Anthony Heraghty said the retail industry was going through "structural change" with more customers shifting online than ever before.
"Having a pure-play, whether it's online or in-store only, will not be effective going forward," he said.
The group's 3.8 per cent total three-year compound annual sales growth rate (CAGR) has been almost entirely fuelled by online sales, which have increased 71.2 per cent compared to 1.7 per cent in offline sales.
Despite this, just 7 per cent of Super Retail's sales come via online channels, and just 11 per cent of customers shop at the brands' online stores.
Our challenge is to digitise the business to deliver the same super retailing experience in an omni-retail world.
Super Retail CEO Anthony Heraghty
"The future for our business is being an omni business, both bricks and clicks. That's much bigger and much more visceral than simply general merchandise," he said."
In tandem with its digital rejig, Super Retail will also seek to streamline its supply chain and focus more investment in its four headline brands, which the chief executive said had been lacking focus in recent time.
This will involve devoting further capital to growing and refurbishing the company's store network, with capital expenditure slated to sit around $90 to $95 million, and increasing margins on the business' private-label brands.
"What often happens is that you look for opportunities that sometimes fall outside of your core business when looking for incremental growth," Mr Heraghty said.
Super Retail Group CEO Anthony Heraghty.Credit: Attila Csaszar
"So instead of looking for something else that's off the table, we want to stay focused on the core things in front of us because they've got good organic growth prospects, very strong brands, and a good opportunity to grow organically."
No love from tax cuts
Mr Heraghty also echoed the views of other Australian retailers, saying he believed the recent tax and interest rate cuts had yet to have an impact on the retail market, with sales "far from consistent".
"If they were to have flown through by now, we would have seen strong performance in the market," he said, referring to September's weak retail figures.
"At this stage, they haven't had an impact, but we've still got the biggest retail period to come."
However, the company is far from confident about its Christmas trade, with Mr Heraghty "exercising caution" as the weeks roll towards December.
Super Retail's shares closed up 1.25 per cent at $9.71. Since the start of the year, the company's share price has increased by nearly 50 per cent.