Underscoring the flat retail conditions in Australia, Pepkor has reported that its Australian retail business has recorded a loss in the latest financial year. Pepkor has owned and operated the 200 store Best & Less chain since 1998 and acquired Harris Scarfe last year, doubling annual sales to around $800 million. The company posted a loss of $8.1 million for the 2013 financial year, reflecting competitive retail conditions in the Australian market and integration costs for the Harris Scarf
fe acquisition.
Pepkor also owns childrenswear chain, The Kids Store, in Australia.
The results for Best & Less and Harris Scarfe parallel flat sales reported by the discount department store chains, Kmart, Target and Big W, and department stores, Myer and David Jones.
Large footprint retail brands in shopping centres have been struggling for growth for several years and seem to be losing drawing power.
Bernie Brookes, Myer CEO, has pointed to a growing divide in shopping centres between the premium malls and other centres, many of which have relied on stores such as Harris Scarfe, Best & Less, and the discount department stores as anchors.
While large footprint retail brands are not achieving growth in customer traffic, the stores are facing higher costs for rent, staff, and utilities and are being forced to shave prices and margins because of competition.
