- Accent Group (AX1) has reported a strong 2020 financial year, with total year to date sales reaching $923 million as at the week ending on June 21
- 23 per cent of this figure was achieved in June alone
- After closing up shop on March 27, the footwear retailer achieved a daily record of $2 million in digital Click Frenzy sales
- Once Australia and New Zealand stores reopened in May, physical stores generally bounced back with the help of government schemes and landlord negotiations
- Accent now expects FY20 earnings before interest, taxes, depreciation and amortisation (EBITDA) to be 10 per cent higher than the $108.9 million achieved in FY19
- Company shares are up 9.19 per cent and are trading for $1.49 each
Accent Group (AX1) has reported a strong 2020 financial year, with total year to date sales reaching $923 million as at the week ending on June 21.
The footwear retailer has a portfolio of a number of well-known brands and retailers. These include Athlete’s Foot, Platypus, Dr. Martens, Hype, Vans, and more.
FY20 results outlook
Like for Like sales have been strong and up seven per cent during the months of May and June.
From June 1, Accent welcomed back all of its 1500 employees to full time employment and pay. This is believed to have positively attributed to the sales growth in June.
“Accent Group’s greatest asset is its people and I am incredibly proud of the resilience, tenacity and performance of our team through this difficult period,” CEO Daniel Agostinelli said.
FY20 earnings before interest, taxes, depreciation and amortisation (EBITDA) is now expected to be 10 per cent higher than the $108.8 million achieved in the 2019 financial year.
This is due to cost management, Australian and New Zealand government wage schemes, and support from suppliers and landlord partners.
Digital sales
May was a record month for digital sales with a new daily record of over $2 million during the Click Frenzy sales initiative. This was achieved while all stores were open for business.
Digital sales across the entire month of May equalled $29 million. Significantly, digital sales for June represented 23 per cent of the total $923 million sales achieved across the 2020 financial year.
“It is clear that there has been a seismic and most likely enduring shift in consumer behaviour. With 18 websites and our leading digital capability, Accent Group is capitalising on this trend,” Daniel stated.
Open and ready for business
On March 27, Accent Group closed all physical stores. Exactly one month later, it announced a come-back plan to progressively reopen its stores throughout May.
The company managed to reopen all Australian stores by May 11. New Zealand stores reopened soon after on May 22.
The Jobkeeper program allowed Accent to bring its staff back to work. Since reopening, sales have bounced back in most areas, with Athlete’s Foot and Stylerunner achieving a particularly impressive recovery.
Landlord negotiations
Accent Group managed to stay on top of paying rent for the vast majority of its stores. However, landlord negotiations gave the retailer a helping hand in the spirit of the Government code of conduct and “shared the financial impact” of less customer traffic.
“The mix of Accent’s superior digital capability and the magic of our stores gives us a key competitive advantage, but it is important that we reach agreement with our landlords for sustainable and fair rental deals,” Daniel said.
The retail group has blatantly stated it’s prepared to close up shop if other landlords can’t reach a fair agreement.
Company shares are up 9.19 per cent and are trading for $1.49 each at 1:58 pm AEST.