Online sales drive record retail results for Premier Investments

Written on the 20 September 2019 by Business News Australia

Online sales drive record retail results for Premier Investments

Solomon Lew's Premier Investments (ASX: PMV) saw its net profit after tax (NPAT) rise 27.7 per cent to hit $177.6 million in FY19, backed by growth across multiple brands in both offline and online retail.

Underlying earnings for Premier Retail rose 11.5 per cent to teach $167.3 million, as the company notched record sales for sleepwear brand Peter Alexander and stationery brand Smiggle.

Meanwhile, the group highlighted "exceptionally strong results" for its Apparel Brands, which has been in the midst of a transformation strategy involving the closure of stores but still managed to register sales growth of 6.9 per cent.

"In 2019, the Premier portfolio outperformed with strong growth in all our apparel brands, continued Online sales growth ahead of market, record Smiggle global sales and record Peter Alexander sales," says chairman Solomon Lew.

"We have clear growth strategies in place for each brand which the team executes on relentlessly, refines continuously and measures fastidiously.

"Capital continues to be invested in growth opportunities with great discipline."

Growth rates were substantially higher for online, and from a substantial base too. The category delivered record sales of $148.2 million, up 31.7 per cent and contributing 13.4 per cent of total sales for Premier.

"We will continue to invest in this channel to maintain a leadership position. Online continues to deliver EBIT margin significantly higher than the group average," says Premier Retail CEO Mark McInnes.

Peter Alexander delivered sales of $247.8 million, and today the brand has announced a new plan for continued growth via the opening of 20 to 30 new stores over the next two years, as well as a "material expansion of online-only options in both children's sleepwear and P.A. Plus".

Smiggle's sales hit $306.5 million and the group has ambitious plans $450 million in annual global retail sales for the brand either in 2021 or 2022.

"Recognising the changing nature of global retail, in September 2018 Smiggle announced its Accelerated Global Growth Strategy. The strategy is being successfully delivered with performance to date far exceeding our expectations," says McInnes.

"Smiggle has now successfully launched its new wholesale channel in seven new countries and in 180 doors.

"The wholesale orders taken to date have the potential to deliver between A$35 million and $45 million in retail sales to consumers in 1H20.

McInnes says these retail sales alone would represent 20 to 25 per cent sales growth on Smiggle's first half in FY19.

"The brand sees the potential to grow with these existing seven partners to over 350 doors within the next 12 to 24 months. In addition, advanced discussions are also underway with new iconic partners in new markets," he says.

"Smiggle's online growth, both from our proprietary websites and third-party websites, has also far exceeded our expectations. Smiggle concession partnerships with iconic global retailers continue to accelerate whilst the brand's new store growth is to plan."

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