Australian fashion business Country Road Group has reported an 8.8 per cent fall in sales in the last 18 weeks to November 3, 2024.
This is according to its South African parent company Woolworths Holdings Limited, and follows a 6.8 per cent fall in annual revenue for the last fiscal year to June 30, 2024.
WHL added that CRG sales also fell 13.8 per cent on a comparable-store basis for the recent 18-week period.
“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,” WHL reported.
“Notwithstanding the challenging macroeconomic backdrop, the Country Road brand remains resilient, and Trenery is delivering strong topline growth, following the repositioning and rebranding of its offering.
“We remain focused on improving the positioning and performance of the other brands, particularly Witchery, which are at different stages of their respective repositioning.
“Trading space decreased by 1.6 per cent during the period, while online sales contributed 26.6 per cent of total sales for the period.
“Notwithstanding our ongoing focus on costs, which remain well controlled, the impact of a weaker trading environment is resulting in continued negative operational leverage for this business.”
The fall for Country Road Group comes despite a 6.5 per cent lift in sales for the WHL group overall for the 18 weeks to November 3. This is also up by 6.8 per cent on a constant currency basis.
WHL reported that consumer sentiment is improving in the South African market, which also includes owned stores and concessions across the CRG portfolio, despite discretionary spend remaining relatively constrained.
The ease in consumer sentiment is supported by “moderating inflation, the start of easing interest rates, and the prolonged suspension of load-shedding, amongst other factors.”
“In Australia, however, the sustained effect of high interest rates and elevated living costs continue to weigh on both retail footfall and spend,” the group reported.