SFH 1.24% $1.22 specialty fashion group limited

Noni B v SFH: skill v excuses

  1. 2,012 Posts.
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    The difference in managerial skill couldn’t be more stark than when again comparing the recent fortunes of these two. What soft consumer sentiment? It is the product offering and selling skill stupid!

    Basically same target market.
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    by Yolanda Redrup, AFR, 9/1/17
    As retailers are closing stores left, right and centre, there is one unlikely winner emerging in the space that seems to be bucking the trend.

    On Tuesday Noni B issued a trading update and said it was expecting a jump of more than 50 per cent in underlying earnings before interest, tax, depreciation and amortisation to $22 million for the first half of the 2017-18 financial year. The company's like-for-like sales for the half were also expected to grow by 3 per cent to $190 million.

    The positive guidance from the business pushed its shares up 4.5 per cent to $1.98 and came on a day when footwear brand Diana Ferrari (owned by Munro Footwear Group) announced it would close 14 stores. The PAS Group, which owns brands such as Review, Marco Polo and Metalicus, also issued an update saying its like-for-like sales from the Review and Black Pepper brands would be down in the first half due to "ongoing subdued consumer sentiment" and an "elevated promotional environment".

    Scott Evans, chief executive of the specialty retailer (which also owns the Rockmans, beme, W-Lane and Table Eight), said the company's target demographics across its brands were more loyal than Millennials, but also pinpointed investments in customer service as the main drivers of the company's ongoing success.

    "We have a really really loyal lady. We have her trust and she knows how the clothes fit and the fabrics we use. She trusts us to a degree that you don't get in that 15-year-old age bracket. My kids are as loyal as a bar of soap," he said.

    Customer experience

    "We have to focus on how to give her the experience she wants, not the experience we want her to have.

    "We've basically focused all of our efforts on the brands and improving the customer experience, the quality of the products, and we've focused on sales training. We have a great bunch of ladies working across the stores and they often get given presents from customers at Christmas time."

    Noni B and W-Lane caters to an older demographic of retired women, while beme designs clothes for curvy women, Rockmans has a younger demographic and specialises in bright prints with a bohemian feel, but at an affordable price, and W-Lane has a focus on fashion for middle-aged women.

    The retailer has also chosen to position its stores outside of city centres and says its typical customers see its stores two to three times per week when they come to do their grocery shopping at nearby Coles, Woolworths or Aldi supermarkets. To keep the store looking fresh to these repeat visitors, it updates its shopfronts twice a week.

    In 2014 Noni B was taken over by investment and advisory firm Alceon, which still owns 40.4 per cent of the company.

    Significant turnaround
    Knowing it needed to turn around the business which had fallen from turning a profit to being loss-making, in early 2015 Alceon appointed Mr Evans, who was the former boss of Bras N Things, to the top job and Sue Morphet, who was credited with restoring growth at Bonds and Sheridan, joined the board.

    In 2016 it then acquired James Packer's Pretty Girl Group for $75 million, making it one of the largest specialty apparel retailers in Australia.

    Since then the company has undergone a significant turnaround under Mr Evans' leadership and for the year to June 30 Noni B exceeded guidance and recorded underlying EBITDA of $22.9 million, a statutory after-tax profit of $3.3 million and revenue jumped 187 per cent to $316.8 million.

    Mr Evans emphasised the importance of retailers being agile and making continuous, iterative improvements. He said brands needed to shake things up every five years at a minimum in order to meet customer needs.

    "I don't see retail getting any easier. Online will continue to grow exponentially and it means you have to change," he said.

    "It's probably going to become more difficult ... if you stand still you go backwards and if we're prehistoric it will hurt us. You have to be agile."

    Read more: http://www.copyright link/business/...as-earnings-fly-20180109-h0fms5#ixzz53gislq5Q
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