News

The Australian Securities and Investments Commission said it started inquiries into the sharp share price drops of Afterpay and its rivals Zip and FlexiGroup on Wednesday night.

"There was no general announcements that proceeded this drop," ASIC commissioner Cathie Armour said.

The Senate secretariat is now expected to summon senators, staff emails and interview those close to the report to establish if there had been contempt. That process was still being determined on Thursday afternoon.

One committee member said they expected the Senate to get the investigation "finished ASAP" as regulators turn their attention to traders who may have scored out of the plunge. It was revealed on Wednesday that Afterpay, which is tracked by Goldman Sachs, Bell Potter and Morgans, dialled around analysts to remind them of the inquiry.

Committee chair Jane Hume and fellow Liberal member Amanda Stoker have ruled out any disclosure coming from their offices, as has Greens Senator Peter Whish-Wilson, who was substituted for Sarah Hanson-Young for the hearings of the Senate inquiry. Senator Hanson-Young ruled out any distribution of the market sensitive document from her or her staff.

Labor Senator Chris Ketter could not rule out an unauthorised disclosure coming from his office.

"It’s not clear what happened in this circumstance, but the Senate has well-established procedures for considering potential instances of unauthorised disclosure," Senator Ketter, the committee's deputy chair, said.

"Labor senators take the confidentiality of committee deliberations seriously."

Fellow Labor senators Kristina Keneally and Jenny McAllister have not responded to requests for comment.

Speaking at Zip's half-year results on Thursday, chief executive Larry Diamond was asked what the he thought the report recommendations would find.

Mr Diamond said after the bank royal commission “it would seem unusual that unregulated pockets would continue to exist” in the financial sector.

Zip executives said the company was “well placed” regardless of the report's outcome because it conducts credit checks on its customers.

A coalition of consumer groups including Choice, the Consumer Action Law Centre and the Financial Rights Legal Centre have all urged regulators to bring buy-now, pay-later providers under the National Credit Protection Act.

Afterpay has voluntarily instituted some of the act's requirements, including hardship and external dispute-resolution schemes, but it is resisting full banking regulation which would compel all companies to conduct formal credit and affordability checks at shop counters.

Globe's first-half net profit was up by 25 per cent to $4.3 million, with revenues up 11 per cent to $78.1 million. Globe lifted its first-half dividend to 6¢ per share, to be paid on March 22, up from 5¢ this time a year ago.

NEW YORK--(BUSINESS WIRE_--(PVH Corp.[NYSE:PVH] announced that a newly formed wholly owned subsidiary has entered into a definitive agreement under which it is proposed that PVH would acquire the interests in Gazal Corporation Limited (“Gazal”) that it does not already own for A$6.00 per share. The closing is subject to customary conditions (including shareholder, court and regulatory approvals) and is expected to occur in the second quarter of 2019.

“I’m pleased that we have agreed to acquire Gazal. PVH currently – and for many years – has had a successful business relationship with our Australian partners and would be pleased to bring them into the larger PVH family”

Gazal has been PVH’s long term partner in Australia. If the acquisition is consummated, PVH will acquire its joint venture with Gazal, “PVH Brands Australia Pty Limited” (“the JV”), which commenced doing business in 2014. The JV holds licenses for PVH’s CALVIN KLEIN, TOMMY HILFIGER and Van Heusen brands, as well as the Pierre Cardin, Bracks and Nancy Ganz brands in Australia, New Zealand and other parts of Oceania. The JV generated approximately A$260 million in revenues on a twelve month trailing basis as of July 2018.

The aggregate net purchase price for the approximately 78% of Gazal shares being acquired is approximately A$124 million, after taking into account the divestiture to a third party of Gazal’s owned office building and warehouse in Banksmeadow, New South Wales, which will take place shortly following the closing date of the acquisition.

The transaction is expected to result in a material increase to PVH’s 2019 earnings per share on a GAAP basis, as PVH expects to record a noncash gain to write-up its equity investments in Gazal and the JV to fair value. Excluding this noncash gain, the transaction is expected to be slightly accretive to PVH’s 2019 earnings on a non-GAAP basis. It is a condition of the transaction that key management of Gazal and the JV commit to remain in their roles for at least two years and use approximately 25% of their existing Gazal equity to subscribe for an approximate 6% stake in the PVH subsidiary that is the parent company of the acquirer.

“I’m pleased that we have agreed to acquire Gazal. PVH currently – and for many years – has had a successful business relationship with our Australian partners and would be pleased to bring them into the larger PVH family,” said Emanuel Chirico, Chairman and CEO, PVH Corp. “Gazal has enhanced the market position of our brands in Australia and New Zealand and we believe the region continues to offer significant growth over the next five years and aligns with our strategic priority to expand our direct control of businesses operated under the CALVIN KLEIN and TOMMY HILFIGER brands worldwide.”

About PVH Corp.

With a history going back over 135 years, PVH has excelled at growing brands and businesses with rich American heritages, becoming one of the largest apparel companies in the world. We have over 36,000 associates operating in over 40 countries and nearly $9 billion in annual revenues. PVH owns the iconic CALVIN KLEIN, TOMMY HILFIGER, Van Heusen, IZOD, ARROW, Speedo*, Warner’s, Olga and Geoffrey Beene brands, as well as the digital-centric True & Co.intimates brand, and markets a variety of goods under these and other nationally and internationally known owned and licensed brands.

*The Speedo brand is licensed for North America and the Caribbean in perpetuity from Speedo International Limited.

About Gazal

Based in Sydney and listed on the ASX, Gazal is a leading apparel supplier and retailer in Australasia. The Company jointly owns and manages PVH Brands Australia Pty Limited, a joint venture company with PVH Corp., one of the largest branded lifestyle apparel companies in the world. PVH Brands Australia licenses and operates PVH’s iconic lifestyle apparel brands, led by CALVIN KLEIN and TOMMY HILFIGER, as well as other licensed and Gazal-owned brand names, such as Van Heusen, Pierre Cardin, Bracks and Nancy Ganz.

PVH CORP. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995: Forward-looking statements made in this press release, including, without limitation, statements relating to PVH Corp’s (the “Company”) earnings, future plans, strategies, objectives, expectations and intentions, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy, and some of which might not be anticipated, including, without limitation, (i) the Company’s plans, strategies, objectives, expectations and intentions are subject to change at any time at the discretion of the Company; (ii) the Company may be considered to be highly leveraged, and uses a significant portion of its cash flows to service its indebtedness, as a result of which the Company might not have sufficient funds to operate its businesses in the manner it intends or has operated in the past; (iii) the levels of sales of the Company’s apparel, footwear and related products, both to its wholesale customers and in its retail stores, the levels of sales of the Company’s licensees at wholesale and retail, and the extent of discounts and promotional pricing in which the Company and its licensees and other business partners are required to engage, all of which can be affected by weather conditions, changes in the economy, fuel prices, reductions in travel, fashion trends, consolidations, repositionings and bankruptcies in the retail industries, repositionings of brands by the Company’s licensors and other factors; (iv) the Company’s plans and results of operations will be affected by the Company’s ability to manage its growth and inventory; (v) the Company’s operations and results could be affected by quota restrictions and the imposition of safeguard controls (which, among other things, could limit the Company’s ability to produce products in cost-effective countries that have the labor and technical expertise needed), the availability and cost of raw materials, the Company’s ability to adjust timely to changes in trade regulations and the migration and development of manufacturers (which can affect where the Company’s products can best be produced), changes in available factory and shipping capacity, wage and shipping cost escalation, and civil conflict, war or terrorist acts, the threat of any of the foregoing, or political and labor instability in any of the countries where the Company’s or its licensees’ or other business partners’ products are sold, produced or are planned to be sold or produced; (vi) disease epidemics and health related concerns, which could result in closed factories, reduced workforces, scarcity of raw materials and scrutiny or embargoing of goods produced in infected areas, as well as reduced consumer traffic and purchasing, as consumers become ill or limit or cease shopping in order to avoid exposure; (vii) the failure of the Company’s licensees to market successfully licensed products or to preserve the value of the Company’s brands, or their misuse of the Company’s brands and (viii) other risks and uncertainties indicated from time to time in the Company’s filings with the Securities and Exchange Commission.

Risks and uncertainties related to the acquisition include, among others: the risk that the regulatory approval required for the acquisition is not obtained or is obtained subject to conditions that are not anticipated; the risk that the other conditions to the closing of the acquisition are not satisfied; uncertainties as to the timing of the acquisition; competitive responses to the acquisition; the inability to obtain, or delays in obtaining, cost savings and synergies from the acquisition; unexpected costs, charges or expenses resulting from the acquisition; litigation relating to the acquisition; the inability to recognize the expected benefits of the acquisition; the inability to integrate the acquired business without disruption to the acquired business or existing operations; and any changes in general economic and/or industry specific conditions.

The Company does not undertake any obligation to update publicly any forward-looking statement, whether as a result of the receipt of new information, future events or otherwise.

However, sales dropped off in the two weeks before Christmas as foot traffic and discretionary spending fell away.

Woolworths said Mr Thomas resigned for 'personal reasons', but later confirmed he had been under investigation following a staff discrimination complaint. He was cleared and the complaint was settled for a small sum.

The crisis deepened when two Australian non-executive directors, former bankers Gail Kelly and Patrick Allaway, resigned suddenly from the Woolworths board.

David Jones plans to "aggressively'" reduce retail space by 20.7 per cent by 2026, boost private label sales and cut costs.

Many now predict meaningful pay rise will occur when unemployment gets close to 4 per cent, a full per cent below its current level and a rate last achieved in the lead up to the Global Financial Crisis.

The group, which owns and manages some of the most profitable shopping centres across Australia and New Zealand, said a focus by its tenants on providing what customers want helped boost traffic at its malls to about 535 million people over the past 12 months.

Chief executive Peter Allen last year made it clear that the onus was on tenants, as much as the landlord, to fully understand customers' wishes and change their offerings to boost sales.

''There is a real differentiation between the quality centres across the country and the less quality [ones], and as retailer it is our job to drive foot traffic and we see demand for quality retail space increasing,'' Mr Allen said.

Calling the company's malls "living centres", Mr Allen said the new term reflected the desire of consumers who still want to visit a centre, not just to shop, but for health, beauty, food and entertainment.

To that end, Scentre will continue to look at mixed use scenarios for its centres, including an office tower at Westfield Parramatta, a residential component at Bondi Junction and co-working office space in centres across the country.

''Scentre has a high-quality portfolio with strong productivity, but its operating statistics remain broadly in line with industry averages,'' JP Morgan analysts said.

''We believe the high level of retail assets on the market will see retail cap rate soften in 2019 and we don’t believe Scentre's portfolio will be immune to this. A key near term target is selling down a 50 per cent stake in two to three assets to a joint venture partner to provide more financial flexibility.''

Scentre's securities were down 3.7 per cent to $3.86.

Woolworths chief executive Brad Banducci says Australia's largest retailer needs to turn sales growth into profit growth to deliver better returns to shareholders.  Louie Douvis

"Shareholders are waiting to see when Woolworths' heavy investment eventually delivers returns," said Alphinity Investment Management portfolio manager Bruce Smith.

Mr Banducci dismissed analyst suggestions capex was "out of control" but said it would return to more normal levels next year.

In the meantime, Woolworths plans to return up to $1.7 billion to shareholders, most likely through an off-market share buyback and a special dividend, once it has completed the sale of its fuel business to the EG Group for $1.72 billion at the end of March.

Net profit from continuing operations, excluding petrol, rose 2.1 per cent to $920 million, while earnings before interest and tax rose 1 per cent to $1.4 billion, falling short of consensus forecasts of about $1.51 billion.

Modest profit growth in Australian supermarkets offset weaker earnings at Endeavour Drinks, New Zealand supermarkets and hotels, while Big W continued to lose money.

Woolworths shares, which have risen 11 per cent over the past 12 months, fell 5 per cent to $28.69.

"Woolworths was trading at an elevated multiple and it couldn't afford to miss versus expectations — EBIT came in below market estimates in most divisions and declined in liquor and NZ food," said JPMorgan analyst Shaun Cousins.

The result showed Woolworths was not immune to subdued consumer confidence, even though more than 70 per cent of earnings came from food and groceries and 10 per cent from liquor, hotels and poker machines.

Mr Banducci said consumers were trading down to cheaper groceries and liquor as household living costs rose and house values fell, making people feel less well-off.

"We saw material trading down from champagne to sparkling wine, which flowed through the results [for Endeavour Drinks]," he said.

He was cautiously optimistic about the second half of 2019 and comparable sales in January and February have improved modestly, but consumers were expected to remain subdued for the foreseeable future and it was difficult to unpick exactly what they were most worried about, he said.

The highlight — or lowlight — of the latest result was the lack of operating leverage as Woolworths invested in its fast-growing but lower-margin online businesses and continued to cut prices.

Citigroup analyst Bryan Raymond said the result was a decent one — group sales from continuing operations rose 2.2 per cent to $30.7 billion — but margins were disappointing and consensus forecasts were likely to fall between 4 per cent and 5 per cent for the full year.

Supermarkets

In Woolworths' earnings engine room, Australian supermarkets, sales rose 2.3 per cent to $19.9 billion and EBIT by 4.0 per cent to $937 million. 

Gross margins rose only two basis points as stock losses increased, while costs of doing business fell five basis points, lifting EBIT margins from 4.6 per cent to 4.7 per cent.

Same-store food sales rose 2.7 per cent in the December quarter, beating Coles' 1.5 per cent growth. However, this was well short of analysts' forecasts of about 3.4 per cent.

Average prices declined 1 per cent in the December quarter, prompting analysts and investors to question why Woolworths did not take advantage of a weakened rival in Coles and rising commodity prices to lift shelf prices and offset rising costs.

"It's hard to see where the light is," said one shareholder, who declined to be named. "Costs are going up but they can't or won't put prices up. At some point, the providers of capital need to be rewarded."

Mr Banducci said Woolworths had fought hard to regain customer trust after raising prices in 2015 and 2016 and losing sales to Coles. However, input costs were now pushing up shelf prices in some categories, including milk, and Woolworths would evaluate prices on a case-by-case basis.

Liquor

At Endeavour Drinks, sales increased 1.8 per cent but earnings fell 6.4 per cent — dragged down by Dan Murphy's — triggering a strategy review of the category killer.

Mr Banducci said Dan Murphy's was more exposed to weaker discretionary spending than were supermarkets and was struggling to grow as consumers cut back on consumption and traded down.

Endeavour Drinks chief Steve Donohue has taken over as interim managing director of Dan Murphy's from Campbell Stott and will head the strategy review, which will focus on better curating Dan Murphys range to suit traditional customers and Millennials and responding to demand for more convenience, including on-demand deliveries.

"It's not a business that needs to be turned around but needs to be reshaped for the future," Mr Banducci said.

Big W

At Big W, losses eased from $10 million to $8 million as sales rose 2.7 per cent to $2.1 billion, but Mr Banducci said Woolworths was unhappy with the pace of the turnaround and was reviewing the store and distribution centre network, with an update expected in four to six weeks.

Big W's same-store sales rose 3.8 per cent during the half and by 5 per cent in the December quarter — benefiting from weaker sales at Wesfarmers' Kmart before Christmas — with growth in all categories, particularly toys, kids and leisure, and online channels.

Woolworths expects losses this year to be below 2018 losses of $110 million, subject to market conditions.

Woolworths increased its interim dividend 2¢ a share to 45¢, payable on April 5.

Women's 'Arli' shoulder bags, by Gucci, are charging out the doors of Chinese shops, filling the coffers of European conglomerate Kerang. Taylor Weidman

His boss, chairman and CEO Francois-Henri Pinault - does anyone have a single-barrelled first name at Kering? - said the trend was set to continue: "In terms of the momentum with Chinese clients, it's very strong."

Gucci is apparently not the brightest star in the Chinese handbag firmament these days, so Kering is looking to push on into perfume, beauty, jewellery and travel retail – you name it, really.

Finally, Swiss firm Richemont, purveyor of Jaeger-Lecoultre watches and Montblanc pens, said its Asia-Pacific sales growth excluding Japan rose 17.5 per cent in the fourth quarter to €1.39 billion, despite an apparent shift in Chinese consumer preference from watches to handbags.

An accepted data point is that Chinese shoppers account for more than a third of global demand for luxury goods. So the European deluxe sector has been watching the region with as much furrow of their collective brow as the Botox allows.

China's fourth-quarter GDP growth of 6.4 per cent was the slowest since the global financial crisis, and the annual rate of 6.6 per cent was the slowest in 28 years.

Retail sales, though, bucked the downtrend, rising 8.2 per cent for the year. Rural consumers got in on the act, outpacing their urban peers and perhaps investing in their first Philippe Patek.

But not all companies shared in the luxury goods makers' bonanza. Apple reported a 27 per cent drop in gadget sales in the fourth quarter.

"While we anticipated some challenges in key emerging markets, we did not foresee the magnitude nor the economic deceleration, particularly in greater China," Apple CEO Tim Cook wrote to investors.

It's possible Chinese consumers are happy to buy a different phone or tablet, while seeing no possible substitute for a Birkin bag or a pair of Gucci glasses.

So while the European leaders fret about their lack of infrastructure titans to take on the US and Chinese conglomerates, there is still one industry where the old Continent bags the global top spot: when it comes to the fashionable and frivolous, the French still rule the roost.

HSBC has appointed a new head of retail banking and wealth management effective immediately to help build a bigger retail presence. 

Jessica Power will be part of the banks efforts to increase its presence in retail banking by assisting domestic and international customers with their mortgages, bank accounts, credit cards and other financial needs. 

Ms Power has over 23 years’ experience in the industry, most recently as state manager metro NSW for Westpac. Prior to that, she worked at Citigroup Australia for 19 years in various roles. 

Ms Power replaces Graham Heunis who has taken on a new role as head of Asia-Pacific sales management, retail banking and wealth management. 

HSBC Australia’s chief executive officer Martin Tricaud said that under Ms Power’s leadership the bank would see its growth efforts come to fruition. 

From facial recognition payments to super fast delivery and even in-store childcare services, there is a lot that Western countries could learn from the ‘new retail’ concept in China.

The term ‘new retail’, dubbed by Jack Ma in 2016, describes the future of retail in China, focused on merging online with offline and creating customer-friendly experiences.

But at Euroshop last weekend, Frank Quix, managing director at retail consultancy Ebeltoft Group, argued that in the Western world, we still think of offline and online as two different channels, whereas in China, they are just seen as commerce.

“We start by either doing experience or convenience and it’s hard to combine them. It’s also how we approach customers. What we try to do is fulfil their needs in the best possible way. It’s based on function or on hedonism and we try to create formats that perfectly fit those needs,” Quix said during his presentation at Euroshop.

“As soon as you start talking to a traditional retailer and they tell you they’re omnichannel, they want to prove it, so the first thing the CEO will tell you is their percentage of online sales. This would never happen in China because talking about online sales if you’re truly omnichannel doesn’t make sense.”

Here are some of the biggest lessons that Western retailers can learn from their Chinese counterparts:

1. Cards are dead and cash is out

At 98 per cent, China has the highest mobile penetration in the world, said Quix.

Only 9 per cent of all sales are done with cash and there are so many locations where you just can’t use cash. Most payments are done by WeChat Pay or AliPay, he explained.

Major retailer Suning has taken a step further, where customers can pay using facial recognition in their stores. 

2. Convenience is the name of the game

Major supermarket chain Hema promises ‘30 minutes within 3K’ – customers can have products delivered to them within 30 minutes if they’re located 3km from a store. Basically, physical store locations have turned into distribution hubs, said Quix. This is largely possible in China because the stores are located in dense cities and the average basket size is small, compared to the West, where most customers have a larger basket size.

3. Whatever, wherever, whenever

Like in Japan, vending machines are particularly popular in China, continued Quix. However, it’s not just soft drinks and packets of lollies being sold. Quix described one machine he saw which sold fresh pizzas that you could actually watch being baked in front of you. Havaianas is an example of one brand which uses vending machines in shopping centres to sell its thongs to customers on the go.

4. Seamless frictionless AI

Personalisation is a buzzword that’s been thrown around a lot, but in 2018, Guess collaborated with Alibaba in China to create a truly bespoke in-store experience for customers.

The smart mirrors within the stores offer customers personalised recommendations and combinations based on the RFID-enabled products that they pick up within the store, said Quix. The mirrors also direct customers to where other suggested items can be found within the store.

5. The evolution of ‘brandshipstores’

Brands are now taking control of sharing their stories by creating immersive stores to fully engage customers beyond just buying the product. 

There are six Starbucks Reserve stores around the world, which are a combination of a shop, production facility, bakery and coffee bar. According to Quix, almost half the total sales are actually merchandise like coffee beans, not cups of coffee. 

Another example is EV car manufacturer Nio House in China. Often located near shopping centres, the swanky spaces are not only showrooms, they also feature a living room and a coffee bar – they’re very similar to club houses for Nio car owners, who have free access and can gain points by simply visiting or even organising events at the house.

“You can even leave your kids at the daycare there so you can visit the shopping centre, come back for a coffee, then go home. At the same time, while you’re there, your car is being charged,” described Quix.

6. Extreme transparency

“Everywhere, people want to know the ingredients of products and where they’re made,” said Quix.

At Hema’s stores, you can not only scan QR codes on products, but also on the live fish swimming in tanks, where you can find out when and where the fish was caught and read tips on how to cook and prepare it. From there, customers can select which fish they’d like to eat and inform the salesperson, who will then send it to the kitchen to be cooked how the customer would like.

7. New levels of personal service

Live chat is something that retailers mostly use on their site, but at department store AS Watson, it’s also implemented in-store to help customers navigate their way around. As Quix explained, it’s a particularly helpful tool for retailers with many locations, as it can be difficult to offer staff with extensive knowledge on all store floors.

At AS Watson, customers may be chatting to an avatar through live chat, but they’re still speaking to a human, rather than a robot. Interestingly, knowing that they were speaking to a person on the other side, the brand found that customers were much more forgiving if mistakes were sometimes made.

Bras N Things has unveiled its first sustainable collection featuring garments that are all made from at least 20% recycled yarn. 

Building on its experience with singular sustainable pieces this is the first time Bras N Things has launched a full sustainable collection.

The campaign showcases Bras N Things sustainable designers Emily Dalamaras and Emma Stubbs, wearing the lingerie and sleepwear designs they created. 

Speaking on the collection Dalamaras said that she was thrilled to design the collection and feature in the campaign. 

"Every collection I work on is special to me, but to be able to combine my love of creating beautiful lingerie and also wear it in the campaign was incredible.

"I am really passionate about being part of the fashion industry’s movement towards working more sustainably and I’m excited to share this range with Bras N Things customers," she said. 

Stubbs added that she is excited to be a part of the sustainability movement that is taking place in the fashion industry. 

"I think the fashion industry is finally realising the power we have to make positive changes to the way we design and produce garments.

"Sustainable fabrics, like we have used in this collection, look and feel beautiful and they are a big part of the future for a fashion industry that cares for our customers and the planet.

"I am so excited to be part of this positive change with Bras N Things," she said. 

Bras N Things national marketing manager Natalie Chalmers said that the business was thrilled to feature the designers for the first time in the campaign images. 

"This campaign is about celebrating the future of fashion and embracing the small, but important, things we can all do to help make a positive change in our world.

"Bras N Things are committed to taking real steps towards creating sustainable fashion and this new collection is part of that.

"This is the first time we have ever featured our designers in a campaign, but we felt it was really important to showcase the two passionate and dedicated women behind this collection - Emily and Emma.

"They have created a beautiful, sustainable collection that we know women will love and we are excited to see their dream brought to life," she said. 

The collection features a camelia floral print across the sleepwear and lingerie styles.

The lingerie styles include a push-up bra with crisscross detailing up to a size 14DD, a longline bralette with neckline strapping detail up to a size 14, a bralette, a Brazilian knicker and v-string. 

The floral theme continues with the Valley range which features a contour bra up to a size 16DD and an underwire bra up to a 14E.

The sleepwear styles include a cami, short, playsuit and a 3/4 pant. 

The range is available now at Bras N Things stores Australia-wide and online at the Bras N Things website. 

It retails for between $26.99 to $69.99.

Billionaire Gerry Harvey says it’s impossible to find suitable land for the next rollout of Harvey Norman flagship stores in Australia and will settle on redeveloping one of the group’s pre-existing Melbourne stores.

Harvey and his wife Katie Page, chief executive of Harvey Norman, say it is too early to divulge traffic volumes at their first flagship store in Auburn, which at 16,000sq m is the group’s largest worldwide.

Built in the geographic heart of Sydney, it opened in October and followed the successful rollout of seven flagship stores in Singapore, Malaysia and Ireland.

The flagship stores cost about $50 million to develop plus an extra $10m-$20m in fit-outs.

“We want to roll out a flagship store in every state,” said Ms Page, adding that sales in its first flagship in Singapore spiked soon after its opening.

“In Singapore we had a budget for the first six months. We have exceeded our budget,” she said.

“But we will never get a site in Australia as big as Auburn.

‘‘The problem is finding sites … we want flagship stores in every state, particularly Brisbane and Melbourne.’’

On the retail front, Ms Page, who oversees more than 200 Harvey Norman stores in Australia, said one of the biggest recent sellers was the Dolce & Gabbana small appliance range. She said the $800 kettles, toasters and juicers had sold so well the Italian company was extending its range.

Ms Page said the heavily decorated Smeg appliances, popular in Italy and France, were also selling well in Australia despite the relatively small population.

“We started working with small appliances several years ago when they were black or stainless steel. Now it is a really strong category for us.’’

Ms Page said the Auburn store was tracking well and she would assess its performance at the end of June. “Gerry and I want to have a flagship store in every state,” Ms Page said. However, the difficulty was deciding what store in Melbourne they would redevelop into a flagship.

“We have a lot of real estate in Melbourne. It’s just a question of which store becomes the flagship,” Ms Page said. “The decision as to what part of Melbourne will be hard, but it does not have to be greenfield. This will not be an easy decision.”

In Brisbane Harvey Norman already has a site pegged out in the city’s southeastern suburbs.

On the property front, Mr Harvey said the residential market was the only weakness, with office, retail and industrial performing strongly. He has a team of 30 staff in his property division.

“Office is particularly good. We have a big portfolio of assets and they are still going up in price,’’ he said. “I have horse, cattle, residential properties and warehouses. I have a lot of investment in retail centres and entertainment.

“But it’s impossible to find sites for flagship stores. We can’t get anything that stacks up. If it’s not possible you can’t do it.

“We have the one site in Brisbane, but can’t find anything in Melbourne or Sydney.”

Meanwhile, Ms Page said the fastest growth for Harvey Norman is overseas, particularly in Southeast Asia, Ireland, Slovenia and Croatia.

“I am on planes a lot,” she said. “Five years ago 6 per cent of our profit was from offshore; last financial year it was 22 per cent,’ she said.

Compensation to underpaid retail managers has weighed on Super Retail Group’s first-half result, with the Rebel Sport owner reporting a slight dip in first- half profit to $71.7 million despite increasing revenue. 

Super Retail (SUL) revenue rose 6.0 per cent to $1.4 billion in the six months to December 29, but the Rays and Supercheap Auto owner saw its net profit slip by 0.7 per cent in the wake of impairments announced on Tuesday.

The company said a review of employment arrangements had showed $32 million in overtime hours had not been paid in accordance with the General Retail Industry Award over the past six years, with interest-related compensation adding another $11 million in pre-tax costs.

Super Retail will pay a fully franked interim dividend of 21.5 cents, unchanged from last year.

Shares in Breville shot up nearly 20 per cent after the appliance maker defied the recent retail slump and worries of a global economic slowdown, booking a bumper first-half profit and upping its interim dividend.

Following a lift in its half-year result on the back of growth in existing markets, as well as its expansion into Germany and Austria, Breville (BRG) said its earnings before interest and tax growth for the full year is expected to beat the market’s current consensus forecast of about 11 per cent.

For the first half, net profit after tax attributable to members lifted 19.7 per cent to $43.5 million.

That figure was positively impacted by a one off reduction in its US deferred tax asset in the previous corresponding period. Excluding the impact of the deferred tax asset, net profit after tax increased 14.8 per cent for the period.

“The first half of fiscal year 2019 was a solid half for the group,” said chief executive Jim Clayton.

“We continued to deliver double digit earnings before interest and tax growth while successfully executing on our acceleration program, increasing our investment in product development and marketing, and successfully entering the German and Austrian markets.”

The company upped its interim dividend payout to 18.5 cents a share partly franked, up from 16.5c last year.

Earnings before interest, tax, depreciation and amortisation up 14.6 per cent to $70.5m.

Shares in Breville closed yesterday up 18 per cent at $14.09.

In its first-half results announcement this morning, the company said it achieved double digit growth in its key North American and UK businesses.

The ANZ business saw double-digit growth in Australia, which the company said was a strong result against a challenging retail environment. Meanwhile the New Zealand market was softer, Breville said.

Entry into Germany and Austria had been successful so far, with revenue from Germany already 42 per cent higher than the first half the company entered the UK market in fiscal year 2014, the company said.

The positive result follows a wave of business failures in the discretionary retail sector have collapsed in recent years, with iconic Australian cosmetics brand Napoleon Perdis falling victim to the retail slump last month and entering voluntary administration.

Brands including Topshop, Marcs, David Lawrence, Rhodes & Beckett, Roger David and Oroton have entered into administration recently, some shutting their doors for good.

Earlier this week, electronics giant JB Hi-Fi booked a 5.5 per cent lift in first half profit, with chief executive Richard Murray speculating that consumers are putting electronic items higher up the shopping list than other discretionary items, such as fashion and clothing.

Plus-sized fashion brand City Chic has booked a solid first six months in FY19, its first half since it emerged as the only Specialty Fashion Group brand left standing after Millers, Katies, Crossroads, Autograph and Rivers, were sold to Boni B Limited for $31 million in June 2018.

The brand, now part of City Chic Collective, saw net profit after tax reach $10.1 million, translating to an earnings per share of 5.3 cents per share, driven by 7 per cent sales revenue growth of $75.4 million.

Comparable sales grew by 9.6 per cent over the period, with City Chic chief executive and managing director Phil Ryan stating stores are profitable and trading well, and that it has plans to expand the portfolio further across Australia and New Zealand.

“Trade was consistently strong throughout the half, including over the Christmas period,” City Chic chief executive and managing director Phil Ryan said.

“We have delivered excellent topline growth globally and at higher margins, due to a constant focus on our customer.”

City Chic grew its gross margin to 60.4 per cent, compared to the 59.4 per cent observed during 1H18.

Ryan noted that online is the brand’s most profitable channel, across both Australia and the United States. It now accounts for 40 per cent penetration with the platform.

In an interview with IR in December, Ryan said City Chic’s success online is due to the way the channel is viewed within the business.

“I don’t look at online as a different silo within our business… we don’t sit there and ask, ‘What’s our online channel doing?’ We ask, ‘How many people did we sell to this week?’, and then the second question is, ‘Where did they buy?’” Ryan said.

The brand offers a much broader range online than in bricks-and-mortar stores, which are restricted in size and restrictions inherent in a physical location, tailoring the in-store experience to the high-end of the product line, and keeping a more diverse range available on the website.

The brand’s comparable sales growth has continued to be positive into the beginning of the second half of FY19, and remains in line with expectations.

Former Australia Post boss Ahmed Fahour is turning his hand to hairdressing.

In a way it makes perfect sense for a man some have described as Melbourne’s answer to George Clooney.

Still, it’s a notable diversification of the personal investments of the man last year appointed as head of banking upstart Latitude Financial Services.

Clearly the reincarnated banking exec Fahour isn’t putting all his eggs in the financial services basket.

Towards the end of last year keen asset trader Fahour — once Australia’s highest-paid public servant back in his $5.6 million-a-year postie days — took a 15 per cent stake in retailer Hairhouse Warehouse.

The outfit, which sells hair care products and operates in-store salons, has more than 135 shops nationally. Fahour has also joined the private company’s board of directors.

To make room for Fahour’s aptly named investment vehicle Beachlane Beauty on the Hairhouse Warehouse register, co-founder brothers Tony and Joseph Lattouf each sold down their stakes in the group from 40 per cent to 32.5 per cent.

It is unclear how much Fahour — who also chairs billionaire Raphael Geminder’s ProPac — paid for his stake in the operation. The Lattoufs have plans to expand their store count to more than 200 in Oz and offshore in the next five years.

Latitude, ProPac and the burgeoning haircare enterprise will all keep Fahour busy in the year ahead.

Surely the one-time NAB exec has too much going on to be tempted back as Andrew Thorburn’s permanent replacement.

Although wouldn’t it be fun?

Back in town

Gaming billionaire James Packer is catching up with old friends on his week back in Australia.

Margin Call hears the Crown Resorts major shareholder — at last count valued at $5.25 billion on the Stensholt Index — spent much of Tuesday evening one-on-one with his friend and Crown Melbourne developer Lloyd Williams. The fellow richie — Williams is worth $787m at last count — is one of several father figures in Packer’s turbulent life.

Williams, along with ANZ’s famously discreet chairman David Gonski, was executor of Kerry Packer’s will.

Packer died at the end of 2005 but his will has only been settled between James and his older sister Gretel Packer in recent years after some, at times, acrimonious negotiations.

Packer flew into Melbourne on Sunday following the unexpected death of his former personal chef, Justin Bull.

On Monday, Packer was in Sydney, visiting friends and conducting business meetings.

Friends say the businessman’s surprise return to Australia and in particular Sydney — where his mother Ros and sister live but where Packer has struggled to feel comfortable — is a positive sign in his recovery after a difficult year.

The proof of Williams’s constructive approach was the audience along to hear him, most of whom rolled out for the after-party in the neighbouring parliamentary courtyard.

Among them were ASIC’s new enforcer Daniel Crennan and head of corporate affairs Matthew Abbott. The corporate cop ASIC was one of the other institutions Williams willed to be better over the years.

Also along: CBA whistleblower Jeff Morris (who listened three rows in front of Comyn, who sat next to his corporate affairs boss Andrew Hall and lobbyist Euan Robertson), a trio of Williams’s media friends Piers Akerman (also in bow tie), Adele Ferguson (whose first media job was thanks to Akerman) and Sky News’s Janine Perrett (on whose show Williams revealed he had Parkinson’s).

Others paying tribute to one of Australia’s most decent politicians: NSW Labor’s newish mouthpiece Cameron Sinclair (recently at Woolworths and before that one of Williams’s bank-baiting allies back in his days in Sam Dastyari’s office), singer Kamahl (for whom Williams once organised a dinner with Barack Obama) and NAB’s highly regarded government relations operative Aron Whillans, who in January learned (while on leave) that he had missed out on the bank’s chief government affairs job to Philippa King, a former staffer to Mike Baird.

That was a shock to many along at last night’s knees-up, not to mention members in Treasurer-most-likely Chris Bowen’s office.

Time for Whillans to leave the circus?

Deliveroo's submission compares the proposed legislation to the Fair Work Act saying an equivalent was needed for "modern" ways of working.

“To end the trade-off between flexibility and security, we believe law reform should be considered that allows workers to accrue benefits on the basis of work performed, for example, the number of deliveries completed or the value of fees earned, rather than their ordinary hours of work, and that the provision of benefits by a company to a self-employed contractor should not impact their employment status," it says.

“Riders frequently reject orders, for example, because they’re currently completing an order for another platform or restaurant and the offer isn’t convenient for them,” the submission said. “In the last six months, 93 per cent of riders rejected at least one order and on average each order was rejected once before it was accepted.”

The average amount of time a rider works with Deliveroo is only five months which Deliveroo attributes to “many riders see riding as a short term opportunity rather than a long term commitment”.

A spokesperson for Uber said the transport and food delivery platform would also make a submission to the inquiry before 20 February.

"We recognise this is a complex policy area and any reforms will require input from workers, the community and business," the spokesperson said.

Jim Stanford, economist and director of the Centre for Future Work, said the push for legislation from "a rear guard action by Deliveroo to head off what it fears."

"The business model of companies like Deliveroo, Uber and Lyft is completely dependent on their ability to assign workers as contractors not employees," he said. "If these companies had to pay minimum wage and other normal conditions of employment they would not be viable."

Mr Stanford said the offer by Deliveroo to provide benefits in exchange for workers not being employees is a "token promise".

"In general that is window dressing to try to make the current situation, which is very exploitative, more tolerable.  Real benefits would be minimum wage, overtime, paid holidays and sick leave," he said.

"I also note it would be tied to work performed rather than time spent and that is a huge distinction as these companies depend on the free time of gig workers waiting for the next job."

In general that is window dressing to try to make the current situation, which is very exploitative, more tolerable.

Jim Stanford

Tony Sheldon, co-ordinator on the on-demand economy for the Transport Workers Union said Deliveroo is "throwing workers a bone to try and shut them up" and "inventing new ways to keep underpaying its workers."

Mr Sheldon said last year workers woke up to a 30 to 40 per cent pay cut when Deliveroo increased delivery distances without warning.

"This is another public relations exercise to try to hide the exploitation that goes on every day,” he said.

"The offset to that is [fast-growing categories like] the connected home and connected technology and where technology fits in the household - when people have money they want to spend it." 

The better than expected guidance sent short-sellers scurrying. JB Hi-Fi, which is the third most-shorted stock on the ASX, jumped as much as 7 per cent before closing up 1.5 per cent at $22.92.

"They were able to cycle really tough comps [comparable store sales] and the guidance is strong ... given the volatility of trading we see this as a very credible result," said JP Morgan retail analyst Shaun Cousins.

"The JB Hi-Fi result was solid in a challenging domestic retail environment," said Tim Carleton, of long-short manager Auscap Asset Management. Mr Carleton named JB Hi-Fi as his preferred long at the Sohn Hearts and Minds investment leaders conference last year.

"It demonstrated again why they are a best-in-class operator. Sales, earnings and cash flow were all strong," he said.

Mr Murray said JB Hi-Fi and The Good Guys would have to "work hard as always" and leverage their strengths in stores and online to defend market share "in a sensible and measured way".

The retailer is increasing floor space in JB Hi-Fi stores for mobile phones, gaming and connected technology such as internet-connected doorbells and security cameras by between 50 and 100 per cent to counter weak demand for software such as music and DVDs.

It is testing a new e-commerce platform designed to make online shopping easier and enable the company to analyse spending so it can start making direct offers to customers based on past purchases.

Online sales rose 21 per cent at JB Hi-Fi but fell 2.4 per cent at The Good Guys due to weaker sales on eBay, where sellers have been discounting heavily to compete with Amazon.

JB Hi-Fi's interim financial results.  

To further differentiate itself from Amazon and online-only rivals, JB Hi-Fi has also started trialling services such as television installation.

At the same time the company is aiming to reduce costs by simplifying its supply chain - merging the JB Hi-Fi and Good Guys' support centres into a single site at Southbank in Melbourne - and benchmarking suppliers to identify underperformance and get better deals.

Revenue in the six months ended December 31 rose 4.2 per cent to $3.84 billion as six new stores augmented solid same-store sales growth in Australia and New Zealand.

Earnings at JB Hi-Fi Australia rose 4.5 per cent to $192 million as total sales rose 4.7 per cent to $2.6 billion and same-store sales by 3 per cent.

Same-store sales growth slowed to 2.8 per cent in the December quarter from 7.8 per cent in the year-ago period and slowed again in January, to 1.5 per cent, less than half the 4.8 per cent growth in January 2018.

JB Hi-Fi New Zealand returned to profit under new managing director Cherie Kerrison, earning $NZ1.1 million as total sales rose 5.8 per cent, same-store sales by 12.6 per cent and online sales by 65 per cent after the launch of a new platform in 2017.

At The Good Guys, which is run by former JB Hi-Fi CEO Terry Smart, EBIT rose 4 per cent as margins stabilised and sales rose almost 3 per cent, buoyed by two new stores and demand for French-door refrigerators, washing machines, large-screen televisions, stick vacuum cleaners and computers.

Same-store sales growth accelerated to 1.9 per cent in the second quarter from 1 per cent in the September quarter and were up 0.3 per cent in January after falling 4.7 per cent in January 2018.

JB Hi-Fi lifted its interim dividend by 5¢ to 91¢ a share, payable on March 8.

Models Victoria Lee, Gemma Ward and Jessica Gomes strut their stuff in front of the influencer crowd during David Jones' Autumn/Winter 2019 collections launch at The Void, MONA in Hobart this week. Sarah Rhodes

On Tuesday, guests nibbled on confit Tasmanian salmon, slow-cooked Robbins Island sirloin and a decadent whisky, chocolate and berry dessert over lunch at the Museum of Old and New Art before watching models Jessica Gomez and Victoria Lee strut their stuff at a fashion parade at MONA's sandstone Void bar.

The party continued on Wednesday, when guests were treated to vitamin smoothies, massages and meditation at MONA's Faro restaurant and checked out the retailer's new food appliances and homewares before returning to the mainland on Wednesday night.

David Jones CEO David Thomas resigned on Thursday, the fourth CEO to depart in less than five years. He was notably absent from the Hobart event. Janie Barrett

It is understood a small settlement was paid to the unidentified complainant, who is believed to be a member of David Jones' visual merchandising team. 

There was no admission of any liability or wrongdoing by Thomas. Settlement payments are often made for a variety of reasons, including to avoid the cost of litigation.

Thomas is not the only senior David Jones executive to be parting ways with the retailer.

Regional chief financial officer Ashley Gardner is leaving at the end of the month following a management restructure and won't be replaced, while chief people officer Karen Lonergan is leaving to join Stockland Group in March.

Guests of David Jones enjoyed lunch at the Museum of Old and New Art as part of the two-day 'Art of Living' promotion. Mark Nolan

Their departures follow tough Christmas-New Year trading, when David Jones' same-store sales growth tanked, and reports of a $50 million blow-out (which David Jones denies) in its $400 million refurbishment of the flagship Elizabeth Street store in Sydney's CBD.

The venerable 180-year-old department store arguably is faring better than its cash-strapped rival Myer, which has shed another 100 middle-management and store jobs last month in an attempt to cut costs and keep banks at bay.

However, David Jones has failed to deliver the profit boost Woolworths was hoping for when it outlaid $2.1 billion for the grande dame of Australian retailing in 2014.

After a promising start, David Jones profits have more than halved since the takeover, falling from $161 million in 2015 to $63 million last year, with further falls expected this financial year. Woolworths had originally forecast earnings growth from David Jones of between $130 million and $170 million by 2019.

Another year, another CEO

The retailer has now lost four CEOs in less than five years: Thomas, John Dixon, Iain Nairn and Paul Zahra. 

The next senior executive departure could be Woolworths chief executive Ian Moir, who has made big promises to shareholders about the value that would be created through the David Jones takeover and merger with the Country Road Group.

South African investors are unhappy with Woolworths' and David Jones' performance and have been calling for heads to roll after a 50 per cent fall in the Woolworths share price in two years.

Asief Mohamed, chef investment officer at Aeon Investment Management, doubts Woolworths will earn a satisfactory return on its investment.

"We are indeed disappointed with the David Jones acquisition, as management expectations and guidance has disappointed," Mohamed tells AFR Weekend.

"Woolworths management generally continues to surprise to the downside. The 7 billion rand ($712 million) impairment of David Jones is testimony that Woolworths overpaid for David Jones," he says.

"We are doubtful that satisfactory returns will be achieved on a sustainable basis on the original purchase price of David Jones."

Mohamed says Woolworths needs to deliver a few consecutive quarters of better-than-expected results before it can be trusted again and regains investor confidence.

"There are some green shoots in David Jones in the latest results with the revenue decrease now abated."

Merger rumours debunked

However, he is not counting on a merger of David Jones and Myer – proposed by an increasingly desperate Myer board in late 2013 but rejected by David Jones – to resolve the problems confronting the two department stores, which are losing market share to specialty and online retailers.

"A merger of Myer and David Jones is not our base case. We believe such a merger to be unlikely unless the price dynamics are significantly in favour of Woolworths," he says.

Cassie Treurnicht, portfolio manager at Gryphon asset management, says Woolworths bought David Jones at the top of the retail cycle and paid too much, pointing to the $712 million goodwill writedown last year, which dragged Woolworths into the red for the first time in more than decade.

"We believe they overpaid for it – not only overpaid, but you don't buy at the top of the cycle," Treurnicht says.

Woolworths has also made mistakes, he says, pointing to a failed private label and pricing strategies, and needed to get basics right before splashing more cash.

Treurnicht doubts Woolworths will make a decent return from the $400 million being spent refurbishing the Elizabeth Street store, which has been largely funded by the sale of DJs Market Street store nearby, but says Woolworths is in too deep to start pulling back on capital expenditure.

"There are signs [David Jones sales] are stabilising but they need to spend with their eyes wide open," he says. "It's unfortunate but they're so far down this path they don't have a choice but to make something of it."

US-based etailer Revolve has upgraded its service proposition to Australia, with a four-prong approach.

The etailer has now introduced a free return service to the market, with a host of local events planned to celebrate the launch.

The move will supplement other services such as ugraded free express shipping, a toll free customer service number and pricing shown and charged in local currency. 

The platform offers over 500 designer labels and counts Australia as its top international market by 2018 net sales.

Revolve international vice president Kai Li said it is always looking to exceed expectations.

"It is extremely challenging to deliver this promise on a global scale so we are thrilled to lead the way by offering free returns in our furthest market.”

Revolve will celebrate the launch by hosting over 10 industry influencers for a week-long celebration split between the Whitsundays and Sydney.

The influencers include Shanina Shaik, Natasha Oakley, Devin Brugman, Aimee Song and Elle Ferguson.

Private industry events include a welcome party on The Island, a takeover of Bondi Icebergs, an event with Australian brand Spell & The Gypsy Collective, a beach party at Watsons Bay Boutique Hotel and more.

Revolve was on track to clock $1 billion in sales last year.