Country Road Group swings to first loss in over 20 years
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The news: Country Road Group has posted its first full-year loss in decades, after the fashion chain succumbed to a retreat in consumer spending and a surge in advertising activity ate into the group’s margins.
The numbers: South Africa’s Woolworths Holdings on Wednesday reported that Country Road Group notched a pre-interest and tax loss for the 52 weeks to 29 June of $18.1 million, down from an aEBITDA of $51.3 million the year prior.
The fashion chain reported earnings of $103.9 million, a 41.1% decline on the year prior, while total turnover for the year declined 5.4% to $1.056 billion from 2024.
Country Road said higher promotional activity to manage inventory levels in a heavily discounting environment, coupled with the impact of a weaker Australian Dollar on input costs, resulted in a 390bps decrease in the gross profit margin of 56.4%.
The context Country Road said that it completed a significant restructure during the year to reconfigure its operating model, adding that the transformation was undertaken during “a particularly unconducive macro backdrop, whereby sustained pressure from high interest rates and living costs continued to impact consumer footfall and spend.”
The fashion group, which manages five brands, including Mimco, Politix, Trenery, Witchery and Country Road, said that The Country Road and Trenery brands have continued to trade ahead of the rest of the Country Road Group brands.
The company has shuttered a number of stores in the past year, including its Queen Victoria Building flagship store in Sydney.
The sources: Woolworths Holdings report, The Australian
