Brexit dents Smiggle’s (ASX:PMV) growth plans


Premier said Brexit had hit consumer confidence in the critical Christmas sales period, hurting Smiggle’s sales.

“This once-in-a-lifetime event has just lurched from one political disaster to another,” Premier Investments chief executive Mark McInnes said.

Premier Investments chairman Solomon Lew and CEO Mark McInnes.Credit:Eamon Gallagher

“It has created deep uncertainty in the country, which has led consumers to dramatically slow their spending.

“We’re not immune to that. It’s like somebody in the classroom getting a cold, and everyone else catching it.”

Premier said as a “direct result” of Brexit, it was pushing back its target of $450 million in annual Smiggle sales from June 2020 to calendar 2021 or 2022.

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Smiggle has 141 stores in the UK and Ireland, and concessions in upmarket London department stores Harrods and Selfridges, out of 356 stores worldwide.

But Premier said it was embarking on a new growth strategy for Smiggle, by wholesaling to large retailers and selling through online retailers like Amazon.

That strategy would deliver better earnings margins than continuing to open its own stores, the company said.

The brand is already sold across Australia, the UK and Ireland, Malaysia, Singapore and Hong Kong, and on Friday Premier said it would roll out in other retailers from July in South Korea, Thailand, Indonesia, Philippines and the United Arab Emirates.

The brand would also launch on Amazon across Europe, giving it access to customers in France, Germany, Italy and Spain, and would hit shelves in a Canadian retailer in mid to late 2019.

[Brexit] has created deep uncertainty in the country, which has led consumers to dramatically slow their spending.

Premier CEO Mark McInnes

Premier said total sales across the company in the six months to January 26 grew 8 per cent to $680 million, and were up 4.6 per cent when the impact of currency movements and opening or closing stores (like-for-like) were stripped out.

Across its Australian and New Zealand apparel brands, which also include Jacqui E and Dotti, sales were up 7.5 per cent, and up 8.8 per cent on a like-for-like basis.

The strongest growth in apparel came at Just Jeans and pyjamas brand Peter Alexander, both up 14 per cent.

“Premier Investments has delivered another very strong result during a half that has seen many retailers struggle with challenging trading conditions,” Premier’s chairman, Solomon Lew, said.

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