Accent Group almost doubled its digital sales over the year to June 30, and delivered a net profit increase of 22.5 per cent year on year to $53.9 million.
Online sales grew 93 per cent and now make up 15 per cent of total sales, while EBITDA rose 22.5 per cent to $108.8 million.
Accent Group chief executive Daniel Agostinelli told analysts he was delighted with the result, in particular in the performance of the group’s kid-focused offering The Trybe.
According to Agostinelli, all four stores are trading well ahead of the group’s expectations, with The Trybe now set to see further stores opened before Christmas 2019 and up to 12 stores opened by the end of FY20.
In the future, Accent Group sees the opportunity for up to 40 The Trybe stores spread across Australia and New Zealand.
“We started out wanting to get in the game, and to put some mini-me products in there,” Agostinelli told analysts.
“The success we’re seeing, particularly on Friday, Saturday, and Sunday, has allowed us to rethink that and to accelerate the offering.”
The group’s ‘vertical products’ – a range of branded socks, accessories, shoe cleaners and custom laces – also performed strongly for the business, generating $4.5 million in sales during FY19, and at gross margins of 70 per cent is expected to grow to $6 million in FY20.
These vertical products will be extended to The Trybe in the coming year.
Hype and Platypus will see their product assortments further differentiated to better serve their target customers.
Hype will further focus on the sneaker–obsessed teen, aiming to bring more quick-to-market products and expanded assortments – including more emerging brands such as Veja, Golden Wolfe and Superga to service the fashion conscious customer.
Platypus will strengthen its street and fast fashion offer, extending its offering of brands such as adidas, Dr Martins, Tommy Hilfiger, and Skechers.
In addition to expanding and growing Accent’s current staple of brands, Agostinelli announced a new footwear retail concept the group will bring to the Australian market in the second half of FY20 – Pivot.
A void in the market
Pivot will be a new lifestyle, casual, street, sport and training footwear chain, which will focus on showcasing a wide range of global third-party footwear brands for the value–conscious consumer – one which Agostinelli said is underserved in the Australian market.
“There seems to be a major void in this area in Australia,” Agostinelli said.
“It’s a Rebel space, and a few others, but we feel particularly with our vertically driven brands and the support from our third parties that we can put together a strong value offering.
“It looks like, and smells like, high end shoe but the price point will be around $90 to $100.”
The space will share no product with Accent Group’s other banners, and will not operate to capture the fashion crowd as a way to ensure the group’s brands aren’t cannibalizing one another.
“It’s not the latest and greatest,” Agostinelli said of the product range expected to be available in Pivot.
“Young, trendy, fashionable shoppers aren’t going to shop there, it’s not for them.”
The group is well positioned for growth, said Agostinelli, as it continues to avoid “lazy” discount-fuelled retailing.
“Sustainable margin improvement remains a key focus… [as is] increasing vertical brand and product mix and operating efficiencies,” Agostinelli said.
“Accent Group continues to be defined by strong cash conversion and the consistent strong returns it delivers on shareholders’ funds.”
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