Sales across Country Road Group have fallen by 6.2 per cent for the 26 weeks to December 29 last year, with comparable store sales down 7.8 per cent in the same period.
The group’s parent company Woolworths Holdings Limited (South Africa) confirmed the news in a trading update this week, citing a heavy promotional environment and price-sensitive consumers in Australia and New Zealand for the lower sales.
Country Road Group manages five Australian brands including Country Road, Mimco, Politix, Trenery and Witchery.
“Trade performance in the last eight weeks of the period, particularly over Black Friday, Cyber Monday and the festive season, improved over the previous eighteen weeks, with sales growth declining by a lesser 2.7 per cent on the prior period,” WHL reported.
“Trading space decreased by 2.4 per cent, while online sales contributed 27.1 per cent of total sales for the period, up from 26.8 per cent in the prior period.
The slip in sales for Country Road Group did not affect WHL’s group-wide revenue for the first half, which was up by 5.7 per cent and by 6.2 per cent on a constant currency basis.
WHL also manages a retail portfolio in South Africa, including Woolworths department stores and standalone retail for Country Road Group brands.
“In South Africa, whilst discretionary spend remains constrained, consumer sentiment is improving, supported by moderating inflation, interest rates easing, and the prolonged suspension of loadshedding,” WHL reported.
“In Australia, notwithstanding improved consumer sentiment and the uplift in retail sector sales buoyed by Black Friday, the sustained effect of high interest rates and elevated living costs continues to weigh on consumer behaviour and discretionary spend.”
WHL added that Country Road Group is currently in the midst of a “significant restructure” to reconfigure its operating model and reset its structural economics as a standalone business.
This comes after more than a year since its sale of David Jones to Anchorage Capital Partners for $100 million, and the successful separation from Country Road Group from David Jones - which included pushing the brands into Myer.
“Whilst the restructuring is on track to be completed ahead of the 2025 financial year end, this accelerated timeframe has necessitated increased internal focus during the period.”