Accent Group continues to fall while E&P analysts 'positive' on new deals
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More news: Accent Group shares continued to tumble on the ASX despite E&P Capital describing the retailer's new distribution deals with Lacoste and Dickies as a positive.
Accent shares were down 3.7% to $2.25 by 12:15pm AEST.
E&P retail analyst Kade Madigan said the addition of the new brands to Accent's distribution portfolio demonstrates the group's "strong capability as a distributor" within Australia and New Zealand.
Madigan expects both deals to commence from FY25, with no benefit in FY25 and to not reach "full distribution velocity" until the second half of FY26.
She noted that Accent will benefit from both increased sales and the opportunity to improve the margin they make on the brands' products.
E&P assumes the deals would represent a minimum of $5 million of EBIT, or 3% of FY27 EBIT. This would require Accent to add around $10 million of sales at a 50% gross profit margin, with "only a marginal increase" in costs to add the new brands to its distribution network.
Accent Group shares fall as it agrees to Lacoste and Dickies deals
More news: Shares in Accent Group lowered at market open on the ASX as the apparel retailer secured exclusive distribution rights for Lacoste and Dickies in Australia and New Zealand.
Accent shares were down 2.2% to $2.28 by 10:50am AEST, having climbed more than 15% since January.
Accent Group agrees distribution rights for Lacoste, Dickies
The news: Footwear retailer Accent Group has been appointed as the exclusive distributor for Lacoste and Dickies in the Australia and New Zealand region.
The numbers: Accent is expected to commence distribution of French lifestyle brand Lacoste in 2025, after a period of transition with its existing distributor. The initial agreement has a term of eight years.
Accent will commence a five-year distribution agreement with Texas-based lifestyle and streetwear brand Dickies from July 2025.
The context: Lacoste is sold in Australia and New Zealand through direct to consumer, online and owned stores, as well as through wholesale channels into department stores and other specialty lifestyle retailers.
Dickies is owned by VF Corporation, owner of Vans, Timberland and The North Face. The brand is currently sold in Australia and New Zealand through direct to consumer, online and owned stores, and through wholesale channels into specialty streetwear and youth stores including Glue Store, Universal, Iconic and City Beach.
What they said: "The addition of both of these new global brands continues Accent's strategic drive to grow our business in the lifestyle apparel and footwear market, in particular the apparel market," Accent CEO Daniel Agostinelli said.
"Both brands are sold and can be expanded in existing Accent banners along with a strong presence in direct online sales.
"Further scale can be achieved with standalone stores and through Accent's 2000 strong network of wholesale accounts."
The sources: ASX announcement, E&P Capital research
