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Luxury fashion conglomerate LVMH has appointed Pietro Beccari and Bernard Arnault’s daughter Delphine Arnault as new CEOs for its two flagship fashion houses, Louis Vuitton and Christian Dior Couture, respectively.

The appointments mark the luxury empire’s most significant organisational changes in its history. 

Pietro Beccari, who has led Christian Dior Couture since 2018, will succeed Michael Burke to become chairman and CEO of Louis Vuitton. Subsequently, Delphine Arnault will head Christian Dior Couture as the brand’s new chairman and CEO after having served at Louis Vuitton as executive vice president since 2013.

Beccari joined LVMH as executive vice president of marketing and communications for Louis Vuitton before being appointed as chairman and CEO of Fendi in 2012. 

“Pietro Beccari has done an exceptional job at Christian Dior over the past five years. His leadership has accelerated the appeal and success of this iconic Maison,” said Bernard Arnault, chairman and CEO of LVMH.

Meanwhile, Delphine Arnault has been executive vice president of Louis Vuitton since 2013, overseeing all of the house’s product-related activities. The French businesswoman is also a member of the LVMH Board of Directors and the Executive Committee. 

“Under her leadership, the desirability of Louis Vuitton products advanced significantly, enabling the brand to regularly set new sales records. Her keen insights and incomparable experience will be decisive assets in driving the ongoing development of Christian Dior,” Arnault added.  

Meanwhile, Michael Burke will take up new responsibilities, reporting to the LVMH’s chairman. 

“He has extended Louis Vuitton’s lead over competitors and promoted the heritage of Louis Vuitton while anchoring it in modernity,” the chairman said. “I am delighted that Michael will continue by my side to share his experience and talent for the benefit of our companies.” 

In addition to the two major executive appointments, executive VP of Christian Dior Couture Charles Delapalme will take on new role as the label’s new MD and work closely with Delphine Arnault. 

Meanwhile, Stephane Bianchi, chairman and CEO of the Watches & Jewellery Division, will now also oversee Tiffany and Repossi. 

The management reshuffle follows the latest appointment of Bernard Arnault’s eldest son Antoine Arnault as CEO of family holding company Christian Dior SE a month ago. 

Last month, Italian fashion group Prada named former Luxottica chief Andrea Guerra as its new CEO to ease a transition at the helm to the next generation of the founding family.

When Vivienne Westwood, who created the torn tartan coattails the Sex Pistols rode to punk stardom in the seventies, accepted an OBE from Queen Elizabeth in 1992, her ability to confound expectations peaked.

To be fair, it wasn’t a complete curtsy to the establishment. She wasn’t wearing knickers (Westwood, not the Queen) for the ceremony, or to collect her damehood in 2006.

Westwood’s legacy as a designer and trend oracle is much clearer, following her death, aged 81.

The daughter of a factory worker and cotton weaver, she rose to notoriety clothing punks in torn T-shirts with pictures of the Queen with her lips safety-pinned, swastikas and bare breasts from her store on London’s Kings Road provocatively called Sex, later renamed Seditionaries, before becoming World’s End. Strangely enough, what followed was far more interesting.

Focusing on fashion in her forties, following her disillusionment with punk, Westwood mined galleries and literature for trends that continue to infiltrate the collections of her peers, evident from her first runway show in 1981 for the Pirates collection.

Those conical bras that made Jean Paul Gaultier a star in 1987 and became the uniform of Madonna’s Blonde Ambition tour, are pointedly apparent in Westwood’s Buffalo collection of 1982.

Controversial designers Dolce & Gabbana built an empire and Kardashian client base on corsets, revived by Westwood in 1991. Mini-crini’s from a 1985 runway show packed with dishevelled Marie Antoinettes turned up the volume for the pouf skirts that followed from Christian Lacroix.

“Vivienne Westwood’s contribution to fashion is unique, perhaps unparalleled,” British fashion journalist Alexander Fury writes in Vivienne Westwood: Catwalk. “She is certainly the most important fashion designer of the latter quarter of the 20th century.”“Our appreciation of every fashion designer today, how the fashion world is today, how we view fashion, is different because of Vivienne Westwood,” milliner Stephen Jones told Another Magazine in 2017. “And that goes for John Galliano, Alexander McQueen, Rei Kawakubo, Martin Margiela – everybody has been influenced by her.”

Westwood’s talent was often obscured by a love of stunts, almost greater than that of her ex-partner, Sex Pistols promoter Malcolm McLaren. There was her 1989 Tatler magazine cover as a disturbingly convincing Margaret Thatcher, sending Naomi Campbell down the runway in 1993 in platform shoes that toppled the supermodel like a wounded giraffe and that confident twirl outside Buckingham Palace in 1996 that amply revealed her disdain for underwear.

Often these stunts were staged to promote causes, such as her commitment to climate change and nuclear disarmament. Westwood also took the counterintuitive move of encouraging customers to buy fewer clothes.

The protests didn’t get in the way of a push for profits by the independent business, with Westwood designing the cabin uniforms for Virgin Atlantic airlines, collaborating with Burberry in 2018 and more recently Asics sneakers. Westwood also designed the extravagant dress worn by Sarah Jessica Parker as Carrie Bradshaw for her aborted wedding in the Sex and the City movie.

Since Paris Fashion Week Autumn-Winter 2016, Westwood’s creative partner and husband since 1993, Andreas Kronthaler, designed the runway collections, refining the label’s language of tartans, pirate paraphernalia, corsets, platforms, heart-shaped lapels and meringue silhouettes.

Kronthaler, 56, who met Westwood as a student, also picked up on Westwood’s rebel spirit. The brand was accused of plagiarism in the autumn/winter 2017/18 collection. T-shirts with the slogan “We do big sizes! 2XL 3XL 4XL 5XL!!!! We do very small sizes!!” had been lifted from designers Louise Gray and Rottingdean Bazaar.

A statement appeared on the brand’s social media in 2018 saying: “We are sorry. The use of your graphics on our T-shirt was only ever meant to be a celebration of your work. We got caught up in a last-minute frenzy and did not contact you to ask for your permission. We are truly sorry about this mistake and want to make it up to you.”

The apology only deepened Westwood’s reputation as a responsible rebel.

In a statement, Kronthaler made it clear that he will continue Westwood’s work.

“I will continue with Vivienne in my heart,” Kronthaler said. “We have been working until the end and she has given me plenty of things to get on with.”

Westwood also maintained her contradictions until the end.

“I don’t even like fashion,” she said in an interview with NME in May. “Well, sometimes I do.”

Department stores and the foodservice sector drove “unprecedented” Boxing Day sales growth across Australia according to data from the Australian Retailers Association and Westpac DataX. 

And the ARA says the data shows pre-Christmas spending hit a record $74.5 billion – 8.6 per cent ahead of last year, a figure that “defied all expectations”. 

“This is without a doubt, the biggest festive season spend on record – it is unprecedented,” said ARA chief Paul Zahra.

On Boxing Day, Australians splurged $1.23 billion – up 15.3 per cent on 2021, with department-store sales of $149 million up by 23.6 per cent and the restaurants, cafes and takeaway food sector accounting for $124 million, up by 22.8 per cent year on year. 

Spending on household goods accounted for the highest share on Boxing Day, reaching $314.76 million, up by 14.3 per cent, followed by food and grocery retailing, up by a more modest 7.6 per cent to $264.52 million. 

Spending on apparel and accessories surged 19.8 per cent to $217.59 million. 

Prior to Boxing Day, there were some concerns in the retail community that higher-than-expected pre-Christmas spending combined with the impact of inflation and interest rates onc consumers’ discretionary spending might mute the traditional Boxing Day splurge-fest. 

But Zahra said the unprecedented pre-Christmas spending did not diminish the spending appetite of Aussies leading into what he described as the year’s “marquee retail savings event”.

“It is remarkable that in this period of economic turbulence, traders have well and truly smashed it out of the ball park as consumers reveled in ‘freedom’ spending. The last three years have been incredibly challenging for everybody – and retail traders were certainly no exception. The resilience and agility of the industry has been remarkable,” he said.

“Boxing Day has once again cemented its status as the Grand Final of Australia’s favorite sport, shopping.”

He said multiple elements drove the record spend, including a sense of ‘reward’ after the challenging period brought by Covid-19 and restrictions on movement and shopping. He also believes many Australians were motivated to buy now ahead of price rises driven by inflation – “and leverage savings during the sales events”. 

Westpac DataX used de-identified card-spend data to calculate the spending figures and provide insights during the key trading time.

“The data shows that despite a year of increasing living costs, Australian retail sales have remained strong over the holiday period, improving on last year,” said Jade Clarke, head of Westpac DataX. 

Private equity firm Anchorage Capital Partners is reportedly in the final stages of acquiring David Jones from Woolworths Holdings, the South African retail giant that bought the department store chain for $2.1 billion in 2014. 

The Australian Financial Review reported on Wednesday that Woolworths Holdings’ deal with Anchorage Capital was imminent and estimated to be between $120 million and $130 million, a fraction of what the company paid for David Jones eight years ago. 

Multiple reports suggest the deal will be done by Christmas. 

Inside Retail contacted Anchorage Capital Partners about the reports, but they declined to comment. David Jones had not responded to Inside Retail’s request at the time of writing. 

Speculation about the sale of David Jones has increased in recent months, following reports in April that its parent company had been meeting with banks. 

It comes after a tough few years for the department store, which was impacted by forced store closures during the Covid-19 lockdowns, and a failed foray into food halls, which were shuttered after a strategic review in 2020. 

Scott Fyfe, the former CEO of Country Road Group, which is also owned by Woolworths Holdings, took over as CEO of David Jones in 2020. 

Since then, he has overseen the reinvigoration of the department store, including the refurbishment of its flagship stores in Sydney and Melbourne, and the exploration of new trends, such as fashion rental and resale. 

In 2021, the retailer reportedly turned a profit for the first time since 2018, thanks in part to a number of costly impairments coming to an end and the Australian government’s JobKeeper wage subsidies. 

In October, Woolworths Holdings’ CEO Roy Baggatini wrote in the company’s annual report that David Jones was “debt-free, self-funding, and has a clear roadmap to improving profitability”. 

As such, he wrote that Woolworths Holdings was now in a “favourable position to explore all future options in respect of this business, and how best to further unlock value for the group and our shareholders.”

According to the Australian Financial Review, Fyfe will remain CEO of David Jones after the sale is complete.

Brosa, the upmarket online furniture brand, has been placed in voluntary administration, citing a decline in trade since Covid-19 restrictions enabled consumers to shop at physical stores again. 

Last February, Brosa’s co-founder and CEO Ivan Lim told Inside Retail the business grew more than 100 per cent last financial year, in line with other online furniture retailers. 

Fuelled both by existing customers increasing their order frequency and average order value during the pandemic, and new customers, who sought out online furniture retailers when stores were closed, the company seemed assured of success, its sales tripling. 

“There’s still so much growth, and we are really fortunate that we built a leading position as far as a digital-first experience goes for home and living,” Lim said.

But this week the dream was over, with KordaMentha Restructuring commencing a sale process for Brosa, and Richard Tucker and Michael Korda appointed as voluntary administrators.  

“The business faced challenges when sales declined after the Covid-19 restrictions were lifted,” said Tucker. 

“This caused short-term cashflow pressures after a period of phenomenal growth.”

KordaMentha is seeking expressions of interest in the business as a going concern. 

Tucker said Brosa had developed a strong customer base and technological capabilities “that would be an asset to many other furniture retailers”. 

“I expect that there will be strong interest in the Brosa business. The company was embarking on a campaign to reduce its inventory holdings and refocus itself as a make-to-order business.”

KordaMentha is planning a stock clearance from the company’s warehouses in Sydney and Melbourne. 

David Jones, the country’s highest profile department store, is in the hands of private equity investors after its South African owner Woolworths Holdings sold the company to Anchorage Capital.

The firm has agreed to buy the David Jones operating business – without its flagship Melbourne property – and says it will accelerate its growth aspirations despite the retail sector facing significant economic headwinds in 2023.

David Jones chief executive Scott Fyfe, who will stay on to run the business, said there would be more investment in its stores and customer experience but refused on Monday to confirm if Anchorage’s playbook would include job losses among its more than 7500 staff once it officially grabs hold of David Jones in March.

Woolworths boss Roy Bagattini at a press conference on Monday declined to disclose the sale price for the David Jones business, saying it was “complex” and that final sale price would “become clearer” in March.

He also declined to explain if the final price Anchorage would pay for David Jones would depend on how the department store performs over Christmas, but described the sale price as “a little bit of a moving target”.

However, sources close to the transaction said David Jones had been sold for around $100m, crystallising substantial losses for Woolworths, which spent eight years trying to turn around the department store.

Woolworths will retain ownership of the flagship Melbourne CBD store, which could be worth as much as $250m. It is believed Woolworths will also attempt to extract as much as $200m in dividends from David Jones before it is handed over to Anchorage.

Woolworths acquired the then ASX-listed David Jones for $2.1bn in 2014, at the same time buying out businessman Solomon Lew’s stake in Country Road for $209m.Woolworths will keeping that business, which also includes the Mimco and Witchery brands.

The Australian first revealed that the South African company had brought in investment banks in the hope of offloading the department store in early April, a move denied by Woolworths.

In buying David Jones, Anchorage gets control of Australia’s premium omnichannel department store owner, with 43 stores and two distribution centres across Australia and New Zealand, as well as a rapidly growing e-commerce business.

Mr Fyfe told The Australian that the company was “back under Australian ownership and we are going to unleash the full potential of this amazing brand”.

“Anchorage has got a very clear strategy for the business, it is a growth strategy which is really important, they’ve obviously come on board with their financial capital investment in the business which is fantastic,” Mr Fyfe said, although he declined to rule out job losses.

“We need to set this business up as a stand-alone business now, so I think it will provide great opportunities for our people.

“I’m not in a position to say whether there will be or will not be (job losses) at this point in time and clearly that is a discussion I need to have with Anchorage.”

Anchorage declined to comment. The private equity firm has extensive experience in retail and consumer investments over 25 years. This includes Anchorage buying Dick Smith Electronics from supermarket group Woolworths for under $115m in late 2012 and then only one year later flipping it on the ASX for a value of $520m. Dick Smith later collapsed, leaving creditors owned hundreds of millions of dollars.

Mr Fyfe said there were a number of strategies Anchorage and his management team could pursue to resuscitate earnings.

“The first place is the capital investments. The last few years has been very challenging for us in terms of the recovery from Covid and we have been capital constrained as we have worked through these periods,” he said.

“So an injection of new capital is fantastic for us.

“And we will use that to prioritise on consumer facing areas, whether that is a customer, or omni-channel business perspective, or an online perspective.

“And we will really scale this business up for success and we can now move at pace. Clearly having an ownership structure in Australia is really beneficial for us. And we can go on and really maximise the opportunity.”

He said he wasn’t daunted by the feared slowdown in spending in 2023 as the impact of interest rate rises, spiking energy bills and soaring inflation threatened to curtail discretionary spending – especially at a luxury retailers.

“We are very clear about the headwinds that are coming, particularly recent interest rate rises that put challenges on consumer confidence and consumer spending,” Mr Fyfe said.

“We have got strong momentum, I’ve been really encouraged by our trading through Black Friday, Cyber Monday and into peak Christmas trading both from a physical and a digital perspective, probably actually more from a physical point of view because we really invest in our premium luxury assortment. We have actually seen consumers trading up.

“We are very aware of calendar year 2023 there will be some headwinds, and we are constantly focusing on value for money across this assortment we offer and making sure that customer base – who have got a higher affluence than the average in Australia – really stick with us.”.

Mr Bagattini, who was brought on board as CEO in 2020 to fix and ultimately sell David Jones, said the acquisition hadn’t turned out as initially envisaged.

“David Jones is just a phenomenal brand. It is an iconic retailer. It’s stature as an iconic retailer just goes on forever. And when you part company as it were there’s a level of sentimentality,” he said. “At the end of the day I’m feeling good about the fact that we are able to set David Jones up with a very positive opportunity to drive forward.”

He declined to name the actual total sale price, only saying it would be more than David Jones current value of $290m in its own accounts – which includes the Melbourne CBD store.

In the years following the acquisition, led then by former Woolworths chief Ian Moir, there were more than $1bn in writedowns. The company launched, and quickly ended, several strategic initiatives including opening dozens of David Jones food courts and locating food services in BP service stations.

The latest accounts showed David Jones had a net profit of just $14.5m in 2022, from $84.3m in 2021 – an 82.7 per cent decline.

It’s not by chance that the only person actually named in the press release announcing the sale of iconic department store David Jones to private equity firm Anchorage Capital Partners was Scott Fyfe, who has led David Jones since October 2020 and will continue to run the business for its new owners.

While sources said Anchorage managing partners Beau Dixon and Simon Woodhouse have led the transaction for the private equity firm over a marathon 18 month process, the pair was not speaking publicly following the deal.

This was a deliberate choice to emphasise how central Fyfe is to Anchorage’s decision to pay South Africa’s Woolworths Holdings Limited a reported $100 million for David Jones.

In the eyes of Anchorage, Fyfe is one of three keys to the turnaround that Anchorage hopes to execute.

Fyfe, who arrived in Australia in 2017 to run Woolworths’ other big Australian investments, Country Road Group (which also owns the Mimco, Witchery, Politix and Trenery brands), is seen as having built good relationships with the Australian retail ecosystem of suppliers and supply chain partners.

The veteran Scottish retailer, who spent 20 years at iconic British retailer Marks & Spencer, is viewed by Anchorage as having delivered the first stages of a strong turnaround at David Jones in the last year or so, tweaking the group’s store portfolio, reducing costs and improving customer experience.

Fyfe’s growth plan, which is called Vision 2025 and seeks to make David Jones a more integrated omnichannel retailer, will largely remain in place. But what Anchorage will bring is capital and focus – this is the second plank of the turnaround strategy.

Woolworths has been an increasingly distant owner of David Jones, both geographically and with the level of resources it has been prepared to inject into the business.

David Jones has clearly been more of an annoyance to the Woolworths board than an asset.

But for Anchorage, the David Jones turnaround takes centre stage. Rather than an owner making decisions from Cape Town with limited knowledge of the store network outside David Jones’ flagship Sydney and Melbourne stores, Fyfe can now call on an owner who is focused on making quick decisions, knows the entire business, and has capital to invest.

That is no small change.

Granular approach

The Anchorage camp emphasises that it will not be taking dividends out of the business along the way – all profits and cost savings will be reinvested into Fyfe’s turnaround plan.

A focus of this investment will be improvements to David Jones’ broader store network, not just its flagship stores. Taking a more granular approach to getting the right mix of range, staff and customer experience across every floor of every store, will be a big part of this process.

A good example is at the Warringah Mall store in Sydney, where Fyfe and his property team were able to work with the centre’s landlord to improve the operations of the store itself and the mall more broadly.

Ironically, Anchorage was beneficiary of this through the Brand Collective retail business it sold last year; Brand Collective had one of its Shoes & Sox children’s footwear stores at the mall, and noticed a clear pick-up in foot traffic after David Jones invested in store improvements.

This model of working with partners such as landlords and concession holders in David Jones stores to help fund improvements will no doubt be an important part of the turnaround.

The retail industry is legendary for its ability to use other people’s money to fund their own businesses, be it through supplier rebates, promotional levies, or jointly funded redevelopment deals.

Mostly, such deals reflect the symbiotic relationship between retailers and landlords, and between retailers and brands – all parties need each other to prosper.

But as we saw when the Dick Smith retail business collapsed in 2016 – two years after Anchorage sold out – in part because it became too reliant on supplier rebates in its procurement, such relationships do need to be carefully managed.

The final plank of Anchorage’s David Jones turnaround is the brand’s heritage, which manifests in a large and loyal customer base and an unusually loyal pool of employees, who will be key to accelerating Fyfe’s turnaround plan.

Unique challenges

As private equity firm TPG found with its purchase and sale of Myer in 2009, owning and running an iconic retail chain brings its own unique pressures.

But the flip side of that coin is this is not some investment in a mid-sized industrial business that no one cares about – consumers will feel invested in Fyfe and Anchorage’s plans to improve customer experience, and integrate online and bricks and mortar channels in seamless ways.

Those customers – who are typically more well-heeled than your average consumer – may also be important in weathering any economic downturn next year.

Of course, history can be a burden too, and the track record of private equity in retail in Australia is hardly anything to get excited about.

As The Australian Financial Review’s retail guru Sue Mitchell pointed out recently, private equity-backed retailers that have collapsed or gone into voluntary administration in the last decade include Harris Scarfe, Seafolly, Tigerlily, Crumpler, Ginger & Smart, PAS Group, Colette by Colette Hayman, TM Lewin, Toys R Us, RedGroup and Dick Smith, which went under two years after Anchorage sold a controlling interest.

The counterpoint to that is Anchorage’s recent experience with Brand Collective, which Simon Woodhouse chaired. The firm was able to help the footwear retailer reset its business and then grow, with particular success in online sales, a category that was previously seen as an omnichannel laggard.

Anchorage held that business for seven years before it was sold to Larry Kestelman’s private family office last June.

While the COVID-19 pandemic did interrupt that sales process, the view from inside the Anchorage camp is that there is no deadline on an exit from David Jones. The firm sees this as a back-to-basics turnaround that will require time.

That’s sensible. Recent history says hunting quick wins in a business like David Jones – extracting outsized dividends, cutting costs too hard, failing to reinvest in a retail sector that is in constant flux – only creates pain down the track.

The reported terms of this transaction are evidence enough of that; Woolworths paid $2 billion for this business and will walk away with an estimated $500 million, the vast majority of which will come via a deal to sell the underlying property of David Jones’ Bourke Street store in Melbourne.

In the retail sector, building resilience and sustainable profitability is a slog. Anchorage’s capital will be crucial for David Jones, but its patience could be even more important.

It’s 12pm in Sydney’s central business district, with only four days to go until Christmas, and shoppers seem to be in short supply.

There’s a long queue outside Haigh’s Chocolates on George Street and a longer one outside luxury retailer Hermes a few streets down.

But most people crossing the retail hotspot of Pitt Street Mall are visibly missing the tell-tale pre-Christmas shopping bags on their arms.

“For the kids, it’s just one big present and a few other smaller things on the side,” says Brooke Weston, who’s just been to Zara, Culture Kings and Foot Locker.

“Probably a bit more conscious on the spending this year because we don’t want to go over the top given the climate. It just feels a bit unusual to be spending more.”Over at the Queen Victoria Building, Tim Gurto, a computer programmer and Ella Zmudzki, a product manager are off work and dressed up for an afternoon of Christmas shopping. The haul so far is iPhone stands for Zmudzki and a tie for Gurto.

“I don’t think mine’s been affected that much compared to last year,” says Gurto.

“Australia seems to be doing fairly OK compared to other countries. We were just in the US and everything is much worse there – clothing, food, cocktails which once you add up everything are $40,” he said.

Weston and Gurto – one sombre, one upbeat – are typical of shoppers who retailers (and their investors) have been trying to get a read on in the lead-up to the Christmas period, which can account for two-thirds of their sales for the whole year.

Also upbeat is The Australian Retailers Association, which is tipping Christmas retail sales (November 1 to December 24) to be 6.4 per cent higher this year at $66 billion, including apparel, household goods, restaurants and others. It reckons inflation will weigh on retailers’ margins and spending, but not until next year.

Economist Frank Shostak disagrees. He thinks the 2022 Christmas shopper has lower savings after central banks’ money printing in recent years, which he thinks has also left businesses confused.

“I doubt that retailers can have a stronger period than last year. Obviously, surprises can happen, but people are poorer and if it happens, it will be at the expense of the next year in a big way.

“It would be totally irresponsible. It’s like somebody with little money, goes to buy Mercedes and nice luxurious stuff and he doesn’t have money enough for food and can die of starvation,” Shostak said.

Fund manager Richard Ivers, who can invest in ASX-listed retailers from his fund at Prime Value Asset Management, has a similarly pessimistic view of shopping appetite.

He went defensive on retail early in the year, keeping small allocations to kitchen appliance-maker Breville and beaten-down stock Hello Travel.

“We are hearing retail [was] strong up to a month ago [but we are] not sure about the last three weeks,” Ivers said.

“Our concern heading into 2023 [is there are] some early signs the economy is softening and rate rises continue to pressure household cashflows, and so we don’t want to be holding highly discretionary names.

“Retailers have benefitted from strong demand and less discounting – which supports margins. Both could reverse in 2023,” he said.

Brick-and-mortar’s hot, e-commerce slowing

Without a crystal ball and with most Australian retail giants publicly listed and gagged on sharing bellwether pre-Christmas sales data, smaller retailers are investors’ best bet for getting a read on the spending this year.

Suitcase seller July straddles the retail-travel divide and is a direct beneficiary of travel reopening, but its shoppers often make a purchase months before they are due to travel.

Its co-founder Athan Didaskalou says its customers are usually fashion-conscious women making between $100,000 to $250,000 a year, and they seem to be doing just fine.

“I don’t think rate rises are affecting their appetite. I know discretionary retail should be afraid of inflation. But by the time they come to us to buy luggage, they’ve already spent $3000 to $4000 on things like tickets and flights.

“People are just a little sceptical of what they see in the news. They just want to get on with their lives,” Didaskalou said.

He says July’s brick-and-mortar stores are pumping, making up 32 per cent of November sales (compared to 10-15 per cent last year) as shoppers head out and try to skip the Australia Post delays. Supply chain issues haven’t been a problem, although it had to compete for production slots at factories with other businesses building up inventory.

Staffing has normalised and costs of shipping containers are back to $8000 to $10,000 each, which is higher than $2000 to $3000 before the pandemic but still half of the $20,000 odd retailers had to stump up last year.

For shoppers that do splurge this year, shirts and skirts online retailer Ozsale is seeing a similar preference for brick-and-mortar over e-commerce.

“It’s been a bit of a 180-degree turn this Christmas period. Right now, they want to go out. E-commerce will continue to grow, but it’s just going through a funny period now,” OZsale chief executive officer Kalman Polak said.

Polak says there’s no doubt cost of living pressures, including servicing mortgages, are weighing on shoppers’ minds. Things they wouldn’t have thought twice before buying in the pandemic have become a conscious decision to be pored on. Meanwhile, retailers will have to think about cost pressures of their own.

“Last year it was about getting a handle on the stock. This year supply has not been a problem at all but the big challenge is keeping prices in check, from everything like purchasing automation for warehouses to Australia Post deliveries,” he said.

“If I think of 2023, retailers will be tightening their belts a lot to combat the costs. As a result, we may see lay-offs.”

The COVID pandemic has given us new words, record-low interest rates and the largest explosion in government debt outside of World War II - and is continuing to upend the way Australian households spend their money.

An update by the Australian Bureau of Statistics to the way it tracks inflation shows that almost three years after the start of the pandemic, consumers continue to spend more of their weekly budgets on everything from hairdressing to cavoodles while new shoes and books are left on the shelves.

Every year, the bureau reviews the nation’s collective spending patterns to help it accurately weight the various components of the basket of goods and services that are tracked to determine the rate at which consumer prices are changing.

Traditionally, changes in the spending patterns of Australian households occur gradually.

When the bureau first compiled its measure of what was described as the “interim retail price index” in the late 1940s, food accounted for 31.2 per cent of the total spending basket.

Meat made up 8.7 per cent of the basket while dairy products - milk and cheese - accounted for 8.2 per cent. Housing’s share of spending was 11.6 per cent, just a little more than the 11 per cent that households devoted to alcohol and cigarettes.

In its 2017 update, spending on food and non-alcoholic drinks accounted for just 16.1 per cent of the inflation basket. Meat and seafood had fallen to 2.2 per cent while dairy products were down to less than one per cent.

In its stead, expenditure on housing - which includes utilities such as electricity - had grown to 22.7 per cent.

Then along came COVID. By 2020, as the country began a nationwide housing frenzy due to record-low interest rates, housing accounted for 24 per cent of the entire inflation basket. Food spending, which lifted during the COVID lockdowns of the period, increased to its highest proportion since the turn of the century to 17.4 per cent.

In its most recent update, the bureau reports food has edged down from its 2020 pandemic hoarding highs but Australians are still putting more of their weekly grocery bills towards such things as beef, chicken, milk, coffee, soft drinks and vegetables.

Eating out, be it in a restaurant or via takeaways, is now at its highest share of our weekly spending since the bureau started officially measuring this sector in the mid-1970s.

As a proportion of the inflation basket, eating out accounts for 6.81 per cent of total spending. That is an increase of 16 per cent over its pre-pandemic level and a bigger share of our expenditure than petrol (3.6 per cent), domestic holidays (2.4 per cent) and electricity (2.2 per cent).

Our spending patterns changed in other ways. The surge in lockdown pets, and their associated veterinary bills, means the proportion of our spending devoted to furry friends and their health needs is 28 per cent above its pre-pandemic levels.

Expenditure on clothing is 11 per cent up (although the share devoted to shoes is down by 11 per cent), the share of our spending devoted hairdressing and personal care is up by 16 per cent while health spending is 16 per cent higher.

To make way for this extra spending, the proportion we devote to other goods and services has fallen. The biggest drop has been on transport fares, down 53 per cent on 2017 levels while the share devoted to the cleaning, repair or hire of clothes has dropped by 42 per cent.

International travel came to a standstill when the Morrison government closed the borders. Despite surging by 2213 percent from its 2020 level, the share of expenditure devoted to overseas trips is still down 41 per cent on its pre-COVID level.

AMP senior economist Diana Mousina said COVID and its restrictions on our way of life had changed our spending patterns which were now reflected in the inflation basket used by the ABS.

She said spending should return to pre-pandemic patterns, but it was taking longer than expected and could change even more as higher interest rates start to bite.

“We’ve seen the price of goods go up and that’s contributing to the inflation we’re seeing. I think services are going to return as spending on goods falls back as interest rates continue to rise,” she said.

“Retail spending remains at elevated levels, and you can see that in the inflation figures, but over time it is going to come back a bit and we’ll see that in a change in our spending patterns.”

While housing’s share of the inflation basket reached an all-time high in 2020, it has now fallen below its pre-pandemic level.

The bureau does not include house prices in its measure of inflation, but takes in rents, utilities and costs associated with purchase of newly built homes.It said that while spending on rents had grown over the past two years, total expenditure across all goods and services had grown by more. Electricity consumption has also dropped which, combined with rebates offered to households by some states to offset surging prices, had pushed down its share of the inflation basket.

The online furniture and homeware retailer announced last week it had fallen into voluntary administration, today Kogan.com has revealed it has purchased the company.

Kogan.com has purchased the Brosa business out of administration. The company is reporting Brosa was purchased at $1.5 million, and additional logistics support for thousands of customers with undelivered orders. This purchase includes the assets of intellectual property, goodwill and stock, and excludes all leases and other liabilities. This means Brosa joins Dick Smith, Matt Blatt and Mighty Ape in the Kogan Group to expand the Kogan Group’s furniture offering. According to this morning’s media release, Brosa.com.au will eventually relaunch with expanded range and value under the new owners. The purchase was funded from Kogan’s cash reserves.

Last week, the company was placed into voluntary administration following a rough year in the wake of a pandemic sales boom that failed to maintain momentum. The administration was overseen by Richard Tucker and Michael Korda of KordaMentha. The administrators expected a strong interest in the company, and announced that around 30 investors had approached them, just days after the company was placed into voluntary administration.

“The acquisition of Brosa by Kogan will broaden the online furniture offering of the Kogan Group, providing unprecedented range and value to Brosa customers, while also expanding the range of furniture and homewares available to Kogan customers,” said Kogan.com COO and CFO David Shafer. “We are pleased to be able to offer a lifeline to Brosa customers, to be able to save the Brosa brand, and to relaunch Brosa.com.au very shortly. Following years of investment in brand-building and marketing, Brosa is a well known online furniture brand in Australia, and we are delighted to be able to bring the brand within the Kogan Group.”

KordaMentha has this morning released a statement that Kogan.com had emerged as the successful bidder. “Kogan.com is a white knight for the business and particularly customers who are awaiting delivery of orders where the stock was held by Brosa. Unfortunately, the Administrators were unable to fulfil these orders due to  challenges in the logistics network. Kogan.com is providing a great outcome for customers to get their product where possible and subject to commercial arrangements.”

Kogan.com intends to continue to operate www.brosa.com.au and offer delivery for customers who have already paid, where Brosa has the product in stock. In the announcement last week, the administrators claimed that this would likely be the case.

Mr Tucker said the priority for the Administrators now is to pay employees as soon as possible. He thanked the employees who had assisted the Administrators in extremely difficult circumstances. “The sale of Brosa is a fantastic outcome for the creditors of Brosa,” Mr Tucker said.

Riding a wave of momentum of the back of this year’s “Freedom Christmas”, retailers are now facing a nervous wait for the tide to turn.  

You don’t need to be a clairvoyant to gauge that a period of uncertainty lies ahead for households and businesses as the inflationary pressures increase in 2023.  

Retailers have done a phenomenal job fortifying ahead of the metaphorical long winter. Our forecasts for the all-important Christmas trading period had sales at a record and the new year’s transition certainly hasn’t dampened the appetite for shopping- most celebrating their new-found liberties after three challenging years living with a pandemic.   

Post-Christmas sales are projected to notch another record of $23.5 billion, up 7.9 per cent.  

But the adage of calm before the storm may ring true here – with many economists flagging a widespread economic slowdown at some point in 2023.  

Tumultuous economic conditions certainly aren’t unchartered waters for retailers. They have been in a permanent state of disruption and rolling with the punches particularly through the pandemic.  

Pleasingly, CBD retailers who were hardest hit are saying weekends are back to pre-pandemic levels and some weekdays are slowly recovering – predominantly suffering from the segue to working from home. 

The CBD retail machine has been permanently disrupted – now requiring a new strategy to attract shoppers who are not workers.  

The key is in the ideation of a 24-hour economy and shifting focus from day to night. Twilight hours are important to ensure it’s a full experience. Indulging the five senses is key. Go for lunch, shop, stop to recharge with a coffee and top it all off with a live performance or show onto dinner and possibly a club or bar afterwards. Take in the sights and sounds that only a city can provide.  

Shopping remains Australia’s favourite sport and the resilience of travel retail in particular, is a great modern-day Rocky tale. Some experts declared travel agencies, holidaymakers and the like would be down for the count. But slowly and surely, they’re getting back up.  

There are still challenges; holiday costs are at a premium and some travellers are wary of a COVID-derailed itinerary – but for the most part, the sector has slipped the jabs thrown their way with prowess.  

The playing field for hairdressers and beauty therapists has also changed. They’re running a team relay race, but the fourth runner is nowhere to be seen. The biggest hurdle for this sector is a crippling shortage of talent, exacerbated by the lack of foreign workers- labour shortages lingering from the pandemic.  

The Australian Retailers Association (ARA) has been sounding the alarm on labour shortages throughout 2022 and we must see this addressed in 2023 to allow a true economic recovery.  

The ARA has championed change in this area – successfully advocating for the extension of extended international student working hours, the introduction of the mature worker tax incentives and a national approach to minimum age workers. There isn’t necessarily one silver bullet fix for labour shortages, but rather the need for a multifaceted approach.  

We are calling on the government to diversify the workforce by removing barriers to participation, streamline immigration processes, invest in skills and connect jobseekers to employers through vocational training and pathways to secure jobs and simplify and modernise the award system, creating flexibility to benefit both employees and employers. 

The reality in our own Back to the Future, in 2023, is very different from that of which we would have anticipated even just four years ago.  

We can’t hit the Flux Capacitor and turn back the clock. We need to adapt to change.  

The pandemic accelerated trends that were already occurring in the industry. The move to online shopping and the need for the shopping experience to both be seamless and contactless have been profound. It’s a known fact that crises drives innovation- the adoption of click and collect, the creation of direct to boot and the love of shopping cashless continued to be embraced by shoppers.   

The pandemic also reversed some trends. The move from globalisation to localisation with more manufacturing being considered locally to sure up supply chains. Buying and shopping local has rarely been more coveted.  

The stars may have fortuitously aligned during the pandemic, but much like astronomers, the industry is staring down a vast of the unknown. 

We are working and hoping as an industry that the universe will provide, but the word on the street is ‘batten down the hatches’.  

Winter is coming – but another Spring will be just on the horizon.  

Australians could be nursing a new year hangover from frenetic Christmas spending at department stores, cafes and restaurants, with some analysts viewing the big increase in retail spending as the last hurrah before the reality of higher interest rates and spiking energy bills hits households.

While the Reserve Bank will not be meeting in January, back-to-school costs, rising mortgage payments and higher energy bills will start to flow through to household budgets soon, likely bringing to an end the run of pre-Christmas consumer spending.

The latest data collected by the Australian Retailers Association and Westpac shows a festive season spending splurge that defied all expectations, reaching a record-breaking $74.5bn – up 8.6 per cent on last year.According to figures from the ARA in partnership with Westpac DataX, Boxing Day trading also recorded unprecedented growth – up 15.3 per cent from last year – to a massive $1.23bn spend for the day.

While economists believe that about two thirds of that higher spending can be explained by rising inflation – meaning we paid more for the same goods and services – there was also a lift in the volume of purchases by consumers heading in to the new year.

“This is without a doubt the biggest festive season spend on record – it is unprecedented,” said ARA chief executive Paul Mr Zahra.

“It is remarkable that in this ­period of economic turbulence, traders have well and truly smashed it out of the ballpark as consumers revelled in ‘freedom’ spending,” he said.

“An unrivalled $74.5bn spend leading up to Christmas still didn’t diminish the spending appetite of Aussies leading into the year’s marquee retail savings event.

“The past three years have been incredibly challenging for everybody – and retail traders were certainly no exception. The resilience and agility of the industry has been remarkable.“The success shared by department stores, in particular, is truly outstanding, defying many predictions by commentators.”

Mr Zahra said according to the data collected by Westpac, department stores drove the greatest sales growth on Boxing Day – up 23.6 per cent on last year – to reap $149.4m. Cafes, restaurants and takeaway food services were up 22.8 per cent, and clothing and ­apparel were up 19.8 per cent.

Mr Zahra said Boxing Day in particular was about “saving money” and could reflect a growing concern among households as they enter the new year and face tightening budgets due to interest rates, energy and the cost of living.

“Boxing Day has different dynamics; Boxing Day is about saving money,” he said.

“So if you think about it, people under household budget pressure are saying well actually, what do I need that I can buy at a discount now and save some money.”

Jade Clarke, the head of Westpac DataX, said spending remained strong despite the rising cost of living: “The data shows that despite a year of increasing living costs, Australian retail sales have remained strong over the holiday period, improving on last year.”

Sydney’s Pitt Street Mall was bustling on Thursday with shoppers eager to snap up discounts in festive season sales, hoping to beat the inflation crunch.

Psychology student Anne Hollerich said she had splashed some Christmas cash, but admitted she had not paid much attention to inflation until she looked to book flights home to see her family in Luxembourg for Christmas.

“It cost so much – thousands and thousands – to get home; it was just too expensive,” she said, so she is now spending new year in Sydney and her first festive season away from home.

New shoes, pyjamas, and beauty products were popular items snapped up by shoppers, with some saying they were getting their shopping done now before they face higher prices back home.

But for mother Chantelle Potgieter, shopping with her daughter Megan, 16, she can already feel the inflation crunch. “Every time I go to shop for groceries it costs 30 per cent more, no matter how I try to plan it,” she said. “I might not be thinking about it while we’re out spending Christmas money now, but you can tell it (inflation) does already have an impact.”

The Australian Retailers Association has welcomed the NSW State Government’s Back to School voucher program, saying it will provide financial support to small businesses and many families across the state.

From today, NSW parents can access $150 worth of vouchers through the program on uniforms, textbooks, stationery and other school essentials.

ARA CEO Paul Zahra said spending vouchers will help offset cost-of-living pressures and boost the retail economy.

“We warmly welcome this initiative, as an extension of the highly successful voucher programs previously introduced by the NSW Government,” Zahra said. “The ARA held ongoing discussions with the government through the pandemic about the power of government vouchers – we are grateful to have a government that listens to business feedback and responds.”

Zahra said that vouchers help bring people into shops, driving a positive flow-on effect for retail and surrounding industries.

He added that the Back to School season is an important time on the retail calender, with this year falling during high inflationary pressures.

“No doubt many NSW residents will appreciate the thoughtful approach as they consider their budgets with cost-of-living pressures continuing to bite,” he said.

“This is a powerful way to not only support budget-conscious NSW families but to also support small business and keep the retail and business economy moving in these challenging times.”

NSW Premier Dominic Perrottet said the summer holidays are a good time for families to start buying supplies for the new school year..

“The NSW Government wants to make sure every child attending school has the opportunity to strive for their best when they are in the classroom and providing access to essential items for learning is our priority,” Perrottet said.

“Parents, guardians and carers, including foster carers, can apply for three $50 Premier’s Back to School NSW Vouchers per child, which can be used at registered businesses towards items including bags, shoes, prescribed textbooks and lunchboxes.

“The end of year is an expensive time for many households with Christmas and family holidays to pay for which is why the NSW Government is investing $193 million into the vouchers to help ease those cost of living pressures.”

Treasurer Matt Kean said the NSW Government understands getting ready for the new school year can be expensive and encouraged parents to take advantage of the vouchers to reduce the costs of buying new school gear.

“From small uniform shops to larger stationery retailers, the pick-up from business has been strong already with more than 500 across the State registered to accept the vouchers and more expected in the coming months,” Kean said.

“Not only are the Back to School NSW Vouchers a big help for families in getting kids equipped with what they need, they’ll provide a real shot in the arm for businesses across the state too.”

Minister for Customer Service and Digital Government Victor Dominello said people can start applying for the vouchers from today, until they expire on 30 June 2023, giving everyone plenty of time to take advantage of the savings.

“Applying for the vouchers is simple and can be done in a matter of minutes using the Service NSW app, on the phone or by visiting a Service Centre,” Dominello said.

“Parents and carers can search for registered businesses in their local area by using the online Business Finder Tool and can use multiple vouchers in one transaction.”

The Premier’s Back to School NSW program is one of more than 70 government rebates and vouchers available through the Savings Finder program.

Woolworths, which also owns The Country Road Group, paid $2.1 billion for David Jones in 2014 and has since made over $1 billion in writedowns and sold the rest of its property portfolio to repay debts. It also was hit hard by the pandemic with rolling store closures.

The last significant jewel in David Jones’ crown is the Melbourne Bourke Street store – valued at about $250 million – which is in the middle of a major facelift. Under the deal, David Jones will enter a long-term lease for the flagship on market terms.

It is believed that any sale of this store – which sits on 3,984 square metres of land and 25,000 square metres of net leasable floor space – would occur when the CBD market was in better shape.

JLL head of capital markets Josh Rutman said Melbourne’s Bourke Street mall was going through a revitalisation where several buildings were being repositioned with the view of taking advantage of the next property cycle in the CBD.

“There is a good story for the mall. But potentially there is more value in the future based on the activity in the precinct,” said Mr Rutman, who was involved in the sale of David Jones menswear store across the road in 2021.

A clean exit

“There has been a huge influx in international capital taking advantage of the real estate market in Victoria. They see an upside for Melbourne real estate coming out of that post pandemic period.”

The David Jones sale would result in a clean exit after a near decade of ownership under Woolworths, which is being advised by Goldman Sachs. David Jones’ equity value on Woolworths books today sits at $289 million.

Anchorage, which is being advised by Rothschild & Co, plans to back Mr Fyfe and his team, and support his strategy to upgrade stores to create a more seamless omnichannel experience and cut unpopular brands while adding others. Mr Fyfe took over in October 2020 – making him the fifth CEO at David Jones in just five years.

Phil Cave’s private equity firm has made several high-profile deals in the retail space including Brand Collective, the footwear businesses which housed Volley and licensed brands such as Hush Puppies and SuperDry, and Shoes & Socks kid’s shoe chain.

Anchorage grew Brand Collective’s online sales from less than five per cent of total sales to greater than 20 per cent while managing a network of over 100 stores. In 2021, the firm sold the combined entity to Larry Kestelman’s LK Group.

But many investors in the sector have had trouble looking beyond consumer electronics retailer Dick Smith, which ended in heartbreak for creditors and left consumers holding $20 million in unused gift cards high and dry after it went under.

Anchorage snapped up Dick Smith for just $20 million from Woolworths in 2012. It introduced a new CEO, and went about its turnaround strategy that included introducing KPI dashboards rolled across all stores linked to staff incentives, opened a Hong Kong sourcing office for private label products, cleared out old stock and created a new digital platform.

The company’s $520 million initial public offer in late 2013 was lauded as a success. But just two years later the retailer fell into administration leaving creditors more than $260 million short.

Those close to Anchorage said Dick Smith’s performance was significantly improved during PE ownership, including a stronger balance sheet.

Mr Fyfe recently told The Australian Financial Review that David Jones was in a strong position to maximise profitability in the years ahead and be a leader in omnichannel retail. Woolworths flagged in November that sales increased by more than 55 per cent in the first 20 weeks of the new year. 

The positive start came after it posted a $14.5 million profit in full year 2022 and sales of $2.06 billion. Normalised earnings were up 18 per cent to $107 million.

One senior investment banker not involved in the deal called Anchorage’s IPO of Dick Smith “a masterful exit around the timing of working capital”.

The banker, who regularly works on complex special situations, said there would “likely be a massive operational slash and burn” at David Jones when Anchorage takes control of the 184-year-old department store.

The investment banker added that given the tough outlook for retail next year, perhaps being outside public markets was “not a bad thing” for David Jones.

Grocery giant Woolworths is preparing to move further down the four-legged, feathered and furred route, homing in on a deal to invest in dog and cat food and pet accessories business PETstock.

It is understood Woolworth is in late-stage talks to take a major stake in PETstock and invest alongside the group’s Victorian founders and management team.

Sources said PETstock had sounded out a number of potential investors, before focussing on recent efforts with Woolworths.

Having got out of pubs and pokies (at least as far as business lines go) and petrol in recent years, pets are emerging as a growth engine for Brad Banducci’s team. The country’s biggest and most valuable grocer has been pushing further down the pets route, trying to capitalise on increased pet ownership and owners’ propensity to spend more on their animals.

Woolworths’ pet interests start with petfood and accessories sold in its supermarkets, which makes it one of the biggest players in the sector, and includes its controlling stake in specialist online retailer PetCulture. It also has a pets JV with insurer Hollard Group.

Adding PETstock, or a stake, would be another way for the retailer to attack the market.

PETstock was founded 20-years ago by brothers David and Shane Young, who owned Ballarat Produce and started PETstock to expand their horizons.

Round of a-paws

The group has grown significantly, hitting nearly $700 million in sales and $54 million in profit before tax in the 2022 financial year. Revenue was up from $524.7 million in FY21, while profit increased from $29 million, according to accounts filed with the corporate regulator.

The group had $161.4 million net assets at July 2, its balance date. The biggest balance sheet line items were right-of-use assets and liabilities (leases) worth close to $240 million, while it had nearly $12 million in cash and $95.7 million inventories.

The accounts told a story of a healthy and fast-growing retailer. The group saw a $2.5 million increase in cash during the year, with a strong operating resulted matched by growth initiatives like buying out stores and paying for property, plant and equipment.

Woolworths declined to comment on its interest in PETstock on Sunday.

The potential deal comes only five months after PETstock acquired Best Friends Retail, a specialty pet retailer across eastern Australia, for $180 million. The group settled the acquisition using renegotiated loan facilities.

PETstock also acquired Pet City in Western Australia in July for $31 million.

Fashion platform The Iconic has launched The Iconic x FNFD Incubator Program for First Nations designers.

The collaboration is an extension of The Iconic’s long-term cooperation with FNFD (First Nations Fashion + Design), which combines the brand’s e-commerce experience and worldwide network as part of Global Fashion Group (GFG), with the insight and perspective FNFD provides from their community participation and industry impact.

The 2023 Incubator Program was created as a prototype to establish the tone for young creatives. Fashion designers, jewellery and accessory designers, graphic artists, and textile artists from various backgrounds and generations are eligible for the program.

“Interest in First Nations fashion has exploded in recent years, with designers like Nungala Creative and Clothing the Gaps piquing the interest of the mainstream with considered, sustainable and beautiful designs that pay respect to country and culture,” said Grace Lillian Lee, founder and CEO at FNFD. 

The Iconic says the collaboration is an important aspect of the brand’s Indigenous Engagement strategy, which was recently unveiled as part of The Iconic and GFG’s People & Planet Positive vision. The 2030 strategy offers five strategic pillars that are intended to achieve positive environmental and social transformation while also caring for its people.

Expressions of Interest for the co-designed Incubator Program are now being accepted until January 15 but may close early due to overwhelming demand. People can learn more via this website. 

In August, The Iconic debuted a new feature that allows consumers to resell previous purchases in collaboration with the re-sale platform AirRobe.

When customers buy their preloved Prada or hand-me-down Hermes from fashion marketplace Vestiaire Collective this Christmas, they’ll be helping the environment in more ways than one.

The preloved luxury fashion marketplace, which sells brands suchs as Balenciaga and Burberry, has joined forces with Australian carbon-neutral shipping company Sendle to provide consumers with a more affordable and sustainable parcel delivery service.

“The cool thing about our partnership with Vestiaire is they’re also a B Corp, and they’re really about sustainable, preloved fashion. So, they share strong values that align with us,” Moody said.

B Corp Certification is a classification that a company is meeting high standards of performance, accountability and transparency across all parts of its business. For a company to get B Corp Certification they need to meet high social and environmental benchmarks.

“With Vestiaire you’re going to save money [and] you’re going to get it delivered to you in a way that’s taking full responsibility for all the carbon emissions,” Moody said.

A growing number of consumers, including those in the Australian market, are turning to preloved or up-cycled fashion rather than contributing to the throwaway culture of fast fashion. Joint research from Boston Consulting Group and Vestiaire found that since 2020 the secondhand luxury fashion market had tripled in size, and that the resale fashion market is worth between $100 billion and $120 billion worldwide.

The partnership with Vestiaire is the latest of many for Sendle, which already has ties with companies such as ebay and Shopify, and comes as the company expands into the Canadian market following its launch in the US in 2019.

Despite debuting in the US just before the COVID-19 pandemic, Moody said the business had exploded, and the decision to catapult it into Canada came from an obvious gap in the market, which reminded him of Australia when they started in 2014.

“Canada is very similar to Australia, where there’s just one big monopoly provider, and we are creating choice,” Moody said.

“It’s [Sendle] cheaper, we will pick it up from you, and it’s 100 per cent carbon-neutral, and it generally gets there faster.”

The difficulty, however, isn’t in providing people with a better option, it’s about telling people there is an alternative. For that, word-of-mouth can be the best tool.

“Small business networks are really, really big... our purpose is built around unlocking network capacity so small businesses can compete... and then after that we start to look for partnerships.”

As for the future, Moody said more expansions were on the horizon and there was no ceiling for the business in terms of prospective markets.

“I think country expansion has been like a muscle, and we are learning how to flex that muscle a bit more,” he said.

“Our vision is to be the largest small business courier in the world. We believe very much around levelling the playing field for small businesses, and we see that as an opportunity everywhere.”

Strand has begun its new concept store rollout with the launch of its Melbourne-based Highpoint flagship on December 10.

The new concept rollout will see an increase of each store's square meterage by 2023 and will run across its 268-store portfolio. By 2026, Strand is expected to grow the total square footage of their stores by 52%.

Strand’s new Melbourne flagship is the retailer's largest at 380 square feet, and includes a new layout designed to hero the brand’s revised fashion-forward strategy.

The in-store experience includes improved visual merchandising, digital integration and dedicated sections to showcase Strand’s range of in-house and external brands.

Its features include a concierge assisted service model, with handbag stylists and luggage advisors, and a one-on-one service bar that allows customers to engage with the Strand team. Shoppers will also be able to choose click and collect pickup and secure pre-orders on upcoming new arrivals.

Digitally, the new concept includes Mobile POS, where customers can pay anywhere within the store, and staff will be equipped with headsets to improve customer service and team cohesion. Digital screens have been added to all customer touchpoints to boost range viewing and to share promotional offers.

A window into the back-of-house wrap and pack station for online orders is also included.

Strand Group CEO Felicity McGahan said her team recognised a need to evolve the business in order to attract a new generation of fashion-forward customers.

“Our customers told us our in-store experience was lacking, with too much clutter and too much going on,” McGahan said. “We listened, and took onboard their feedback. Everything that we’ve introduced is considered and customer driven, from layout right through to concierge-style customer service and modernised point of sale.

"Our incredible new flagship store at Highpoint is the culmination of bringing the new brand strategy to life, blurring the lines between physical and digital and giving our curation of brands the room to shine for the customer.

"With dedicated branded zones, enhanced digital innovation and an elevated customer experience, we know that the blueprint for this flagship sets the perfect tone for the evolution of Strand stores moving forward”

Strand’s new Melbourne flagship follows its rebranding strategy, marked by a brand name change last month from Strandbags to Strand. The brand is preparing for new initiatives to strengthen its rebranding into a new category, which it calls Fashion Travel.

Strand’s new flagship store is located on Level 3 of Melbourne’s Highpoint Shopping Centre in Maribyrnong.

The brand originated in Sydney, Australia in 1927. It is currently celebrating its 95th anniversary.

Fast-fashion retailer Shein has filed confidentially with US regulators for an initial public offering that could take place next year, according to a person familiar with the matter.

The online retailer, which was founded in China but is now headquartered in Singapore, is working with Goldman Sachs, JPMorgan Chase & Co. and Morgan Stanley on the listing, said the person, who asked not to be identified because the filing wasn’t public.

Representatives for Shein, JPMorgan and Morgan Stanley declined to comment. A spokesperson for Goldman Sachs didn’t immediately respond to a request for comment. The filing was reported earlier by Shanghai Securities News.

Shein (pronounced “she-in”) has become popular thanks to its trendy clothing at ultra-low prices. The company has been hoping for a valuation of as much as $US90 billion ($136 billion) in a US IPO, Bloomberg News reported earlier this month. Shein’s estimated sales now far surpass Zara and H&M in the US fast-fashion market.

At the same time, Shein has come under fire for poor labour conditions in factories it partners with, overproduction of poor quality garments and the use of cotton from a Chinese region accused of using forced labour. US senators have written to Shein chief executive officer Xu Yangtian (also known as Chris Xu) to request more information on the labour claims.

The criticism hasn’t stopped Shein’s meteoric rise among shoppers all over the world.

Last year, Shein opened distribution centres in the US, Canada and Europe to accelerate shipping times in those regions. It has also begun to expand manufacturing in Brazil, Turkey and India.

Speed is the Chinese company’s defining characteristic, anticipating the tastes of Western teenagers and catering to shifting preferences almost instantaneously using artificial intelligence and ultra-quick supply chains.

Shein’s founders’ roots in online marketing are key to the company’s success. Through real-time data and algorithms, Shein identifies hot items and adjusts production to keep inventory rotation and delivery speedy.

It was the pandemic that turbocharged growth as teens and 20-somethings stuck at home and often on limited budgets turned to the company’s ultra-cheap online offerings. More than half of its customers are from Gen Z, those born between the late 1990s and early 2010s.

The retailer offers a wide range of products under $US10, and suppliers need to deliver new designs in around 10 days, even faster than Zara’s famous three-week turnarounds. 

Shein has drawn audiences across Europe and the US — its dominant markets — with its viral “clothing haul” videos, featuring influencers modelling “dream wardrobes” with pieces starting at $US3. The videos ricocheted across TikTok and YouTube during every major shopping season, with Shein releasing thousands of items weekly. The company sprinkles its marketing with star power through virtual concerts hosted by major celebrities.

In 2018, Shein’s value was $US2.5 billion. A year later it had doubled, and now it’s eyeing a $US90 billion valuation. As Shein’s growth took off, its CEO Xu, born in China’s eastern Shandong province in 1983, built one of the world’s great fortunes. The 40-year-old is now worth about $US21.5 billion, according to the Bloomberg Billionaires Index, which estimates his stake in Shein at about one-third.

Retailers are overstocked and are ordering less from manufacturers as the economies of the United States and Europe slow markedly, and this will have a ripple effect on the entire global economy says the managing director of logistics giant Toll Group.

Alan Beacham, who was speaking to the Australian Financial Review Infrastructure Summit from Singapore, said Toll was already noticing lower orders from retailers in the US and Europe, which were adjusting inventory levels downwards as demand from consumers slowed.

“Retailers are overstocked, so they’re ordering less,” Mr Beacham said.

“This means you’re going to see an even further slowing next year in terms of those orders into the manufacturers, which kind of creates a ripple effect into global trade,” he said.

He said a “perfect storm” looms next year because inflation will still be a big issue as consumer demand declines. “Demand will be down, so we have that perfect storm of a lower top line and an increasing cost line,” he said.

The warning shows how the resolution of supply-chain bottlenecks that were exacerbated by hot consumer demand and product shortages during COVID-19 lockdowns is still leading to forecasting errors and complicating ordering decisions by consumer goods companies.

‘Not smooth sailing’

Mr Beacham also said a large amount of new shipping capacity is set to come into the industry from late in 2023 until 2025 as new vessels arrive, which is the equivalent of adding 30 per cent of the current global shipping fleet. That is coming on stream at a time when demand is likely to fall.

He said the costs of shipping and bringing in goods to Australia from offshore have dropped significantly compared with a year ago, but there are still disruptions in supply chains.

“It’s not smooth sailing yet,” he told the summit. He said reliability levels are still below 50 per cent, and industrial relations issues in Australia have exacerbated the situation. “It’s still a fragile supply chain,” Mr Beacham said. But shipping container index tracking shows a 70 per cent reduction in price from November 2021 to November this year.

“It has fallen very quickly,” he said.

Race to the bottom

Jon Davies, the chief executive of the Australian Constructors Association, told a panel examining the issues of rising costs and inflation that construction companies have been undervalued in Australia for too long and a race to the bottom approach – where margins are pushed lower and lower when tendering – needs to stop. “We’re almost looked upon as a commodity,” Mr Davies told the summit.

Having to accept low-single digit profit margins on large projects with significant risks needs to “fundamentally change”, he said.

Rebecca Hanley, managing director of engineering and construction group Laing O’Rourke, said if there was a slowdown in the economy and some projects were put on hold, it would reduce a “hyper escalation” of projects that had built up and make the pipeline of projects more sustainable.

“The peak just keeps shifting to the right, because we never reached that peak,” Ms Hanley said.