Virus hastening shift to online: Premier
Premier Investments is reopening the remainder of its closed stores in Australia and New Zealand this week - but some may not stay open for long.
The owner of the Smiggle, Just Jeans and Peter Alexander brands says e-commerce sales performed phenomenally during the shutdown period and it sees them continuing to grow, while in-store shopping will be bound by strict social distancing rules and health guidelines.
The company notes that close to 70 per cent of Premier Retails stores in Australia and New Zealand are either in holdover or have leases expiring in 2020, giving the company "maximum flexibility" over possible store closures.
Premier Investments says in-store sales were down 99 per cent for the six weeks to May 6 compared with the same period in 2019 but online sales surged by 99 per cent.
Total sales were down 74 per cent across the company's seven brands.
E-commerce sales at luxury pyjama brand Peter Alexander have even outpaced last year's total sales across both online and its entire 122-store and concession network in Australia, the company says.
It's the same story in New Zealand, with online sales for the nine days to May 6 up 52 per cent compared with both online and retail store sales a year ago.
The company seems stunned by the results, twice using the word "incredibly" to describe the e-commerce sales figures.
"Prior to the global health crisis, customers were already increasingly electing to shop online," Premier Investments said on Tuesday.
"The COVID-19 pandemic has significantly increased that existing trend and could hasten the substantial retail restructure already underway."
The company noted its online business had a significantly higher profit margin than its physical store network.
Since 2013, Premier has had a centralised, customised Australian distribution centre servicing all Australian order fulfilment.
In fiscal 2019, e-commerce sales made up 13.4 per cent of Premier Investments' total sales, up from 2.6 per cent five years ago, according to the company's annual report.
The company met its goal of $100 million in online sales in fiscal 2018, two years ahead of schedule, and its New Zealand websites for Smiggle, Just Jeans, Portmans and Jacqui launched last year and far exceeded expectations, Premier has said.
Premier temporarily shut its stores in Australia from March 26 after the federal and state governments introduced strict social distancing measures to halt the spread of coronavirus.
Most of its stores in Queensland and the Northern Territory reopened on May 7 following the easing of restrictions there.
Aside from airport and CBD stores, the rest will reopen on Friday in Australia and Thursday in New Zealand.
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