It has been a year most retailers would probably like to forget, with 2020’s brutal trading conditions claiming so many big-name scalps even industry insiders have lost count.
Noni-B’s parent company Mosaic Brands announced shock plans to shut down hundreds of stores. Picture: Steven Saphore/NCA NewsWire“The model is fundamentally to provide capital – they enter the business essentially as an owner, put as much debt as possible on the balance sheet to try and engineer sales growth, but when something like COVID comes, there’s very little wiggle room,” Mr Walker said.
“It’s a threat to landlords that if they keep charging these rents they can’t afford, they will just walk away.”Mr Walker said fashion retailers were particularly at risk during the coronavirus crisis as household budgets were feeling the squeeze and prioritising spending in other areas such as homewares and home entertainment, which was reflected in the successful earnings results recently posted by companies such as JB Hi-Fi, Adairs and Nick Scali.
“And the other thing is we’re going out far less – more of us are working from home and there are no big events to frock up for.” Other examples include Jeanswest, which couldn’t compete with higher-end labels like Sass and Bide and Levi’s and the “cheap and cheerful” threads offered by Wesfarmers’ Kmart and Target and Woolworths’ Big W.Prof Mortimer said many doomed retailers – such as Australian Geographic – had simply failed to evolve.
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