Accent Group boosts RCG

Platypus Shoes 2Footwear retailer, RCG Corporation, has lifted its underlying Net Profit After Tax (NPAT) 16 per cent to $13.7 million in the 12 months to June 30, 2015.

RCG, which owns Athlete’s Foot and Merrell, completed the $203 million purchase of Accent Group, owner of the Platypus Shoes, Skechers, Vans, and Timberland stores, in May.

RCG’s statutory NPAT, which allows for $3.6 million of one‐off costs associated with the acquisition of Accent Group, fell 10.4 per cent to $10.5 million.

Accent contributed Earnings Before Interest Tax and Depreciation (EBITDA) of $3.3 million to RCG’s earnings, on sales of $29.5 million. Like for like sales grew 31 per cent and total sales growth for the period exceeded 80 per cent.

“The ongoing performance of the Accent business is unprecedented in the current retail climate, with over 30 per cent like for like growth over the last 12 months and double digit like for like growth in each of the two years before that,” said CEO of RCG Corporation, Hilton Brett.

“We are naturally delighted with the ongoing performance of the Accent business and we are providing all the necessary support to the Accent team to enable it to continue to outperform the market and maintain its current momentum.”

At The Athlete’s Foot (TAF), like for like sales grew of 1.2 per cent for the year ended 28 June 2015, after a difficult start to the year. TAF delivered full year EBITDA of $13.1 million, a 1.1 per cent up on the prior year.

Brett said he was pleased with the performance of Athlete’s Foot in a tough market.

“The business’s uncompromising focus on service and the customer experience provides it with a clearly differentiated and defensible market position that sets it apart from all other market participants. As a consequence, it has been able to maintain its position as a premium full‐price retailer, despite ongoing aggressive price activity in its sector,” he said.

A strategic review of TAF’s market position and consumer offering is underway and the outcomes will begin to be implemented in the coming months.

Across RCG Brands (RCGB) EBITDA grew 24.3 per cent to $8.6 million. Total sales grew 35.6 per cent to $63.2 million, comprising wholesale sales growth of 24.3 per cent to $37.0 million, and retail sales growth of 55.7 per cent to $26.2 million.

During the period, the business opened three new Merrell retail stores, taking the total number stores to 18. Together with the nine store Podium Sports business, RCGB now operates 27 stores across Australia.

“The outstanding results are a testament to the efforts of the team and the quality of the brands that they distribute,” Brett said. “We are particularly pleased with the performance of Saucony, CAT and Sperry with all three brands experiencing growth both through existing and new channels.

“This growth has more than compensated for the lacklustre performance of the Merrell brand, which has been impacted by a lack of innovative lifestyle product. These issues are being proactively dealt with by Wolverine Worldwide Inc, owner of the Merrell Brand,” he added.

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