Fashion retailers fare well from COVID

Retail business and consumer confidence in Australia remains solid and rebounding, despite the impacts of the COVID-19 pandemic.

Colliers International’s most recent Retail Research and Forecast Report has found that despite the initial disruptions to 2020, some retail categories have been profitable during the pandemic, while consumers have more money to spend as a result of fund re-allocation.

The report found that even in challenging categories, such as fashion, retail was able to reach record profits as a result of the government assistance measures put in place. Online retailers such as Kogan saw sales up 110% on prior year, and profits up 56%. Temple and Webster have seen sales up 74% and EBITA up 500%.

Premier Investments which own Peter Alexander, Smiggle, Just Group, Dotti, Jay Jays, Just Jeans and Portmans reported an increase in online sales (up to 18% of total sales) with 29% increase in net profit despite sales being down 4.3% for the financial year.

“Although many fashion retailers have seen significant falls in sales during the second quarter, many have pivoted to online retailing and have seen online penetration jump dramatically,” said Michael Bate, Head of Retail at Colliers International.

“Total online market penetration has surged in the non-food categories reaching a peak of over 20 percent at the peak of the pandemic and 17.6% in August according the ABS online index recording.” 

“Meanwhile retail trade data from the ABS has seen a strong rebound in sales over the last few months except for Victoria, however we anticipate a high level of pent up demand when the opening of the Victorian economy commences, mirroring other states when they begin  to open.”

Consumer spending patterns have been highly disrupted through 2020 although there is some normality starting to return. 

Kate Gray, Director, Research at Colliers International said, “We have seen some interesting dynamics at play with consumers unable to spend in certain categories; the most obvious is overseas travel, which is off the cards this year and most likely at least half of 2021.”

“Overseas travel accounted for $61 billion during 2019 which is almost double the superannuation withdrawals to date. Not all the spend on overseas travel is expected to be spent on domestic travel and therefore is likely to be spent in other retail categories.

“Categories such as cars, home renovations, and large ticket purchases are all expected to be beneficiaries of this spend. As time goes on and there is further easing of restrictions, further spend on cafes, restaurants and entertainment is likely.”

Click here to download the Retail Research and Forecast Report | Second Half 2020.


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Michael Bate

Head of Retail | Retail

Sydney CBD

My professional knowhow stems from an extensive career in retail property development, project leasing, site acquisition and disposals and property management.

I joined Colliers International after holding the position of National Business Manager for Stockland Commercial for 9 years. During this time I was responsible for the acquisition and disposal of just over $750M worth of Retail and Commercial assets.

Prior to my Capital Transactions role in Commercial Property, I was the Regional General Manager Leasing for the Stockland Shopping Centre portfolio.

Prior to Stockland, I was the National Leasing Manager for Lend Lease Retail here in Australia. I worked on some of Australia’s leading Retail projects including, Casuarina Darwin, Melbourne Central, Sunshine Plaza and Smithfield in QLD and Woden in the ACT. I was the Lend Lease Asset Manager for the Kiwi Income Fund and worked on several of their retail projects in New Zealand.

Prior to Lend Lease, I was a National Director with Jones Lang Wootton in both WA and NSW and ran the National Project Leasing team for again some of Australia’s best retail assets and Portfolios.

I also have a lengthy career in the media working for John Fairfax and Sons in TV and Radio for many years.

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Kate Gray

Director

Adelaide

Kate joined Colliers International in 2013 as Associate Director. She has over 6 years experience in property research within the South Australian market and has conducted primary research into the retail and suburban office markets. Kate writes and speaks regualry on commercial property trends in the South Australian market.

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