‘Rebalance’ for retail after Covid

Older buyers return to Mosaic

THE chief executive of Mosaic Brands, Scott Evans, says the retail sector is rebalancing as the Covid-19 pandemic recedes, helping brands which focus on older consumers.

Mosaic told investors on Wednesday that it would record underlying earnings before interest, tax, depreciation and amortisation of $15.8m for the six months to the end of December, up 195 per cent on the prior corresponding period.

Total sales were up 23 per cent and comparable store sales rose 12 per cent, the company said, although online sales were flat.

Mosaic operates 900 stores across its Katies, Rivers, Millers, Noni B and EziBuy brands and has plans to open another 130 outlets.

Mr Evans said that companies found themselves “either on the right side or the wrong side of Covid”.

“Some did well, and some did it tough,” he said. “We serve a mature market and largely in fashion. Trying to provide fashion to a mature audience during a pandemic is one of the most difficult things to do. If you are selling to younger consumers who have money coming through JobKeeper, I think you’ll do pretty well.”

Mosaic shares closed down 1c, or 3.5 per cent, at 28c.

The Mosaic trading update is the latest in a string of figures released by retailers which point to a mixed performance during the first half of the financial year.

Kogan.com this week said it expected to slump to a pretax loss of $31.3m for the half, its biggest half-year loss ever, with sales down 33 per cent to $471.1m.

City Chic, another onlinefocused retailer, expects its sales for the period to fall 8 per cent. Last week it told investors it expected a first-half loss of up to $4m.

In a trading update on Wednesday, Best & Less said like-for-like sales were down 4.9 per cent in the first 26 weeks of the financial year. Online sales fell 29.8 per cent compared to the prior year.

December like-for-like sales, it said, were up 5 per cent following a strong holiday trading period.

However, the combination of a lower gross margin – due to discounting to reduce stock – and soft sales meant profit after tax would be $13.7m, down 32 per cent from $20.1m for the period last year.

“While we are cautious on the near-term macroeconomic outlook, our vertical model and the deep retail sector experience of our team gives us the ability to respond and adapt rapidly,” said the company’s executive chairman Jason Murray on Wednesday.

Best & Less shares fell 13.9c, or 6.6 per cent, to close at $1.97. They have fallen 39 per cent in a year.

Separately, Accent Group said that new products were driving strong sales in Christmas and in the back-to-school period.

Sales rose 39 per cent to $825m for the 27 weeks to January 1, with first-half earnings before interest and tax for the first half between $90m and $92m.

Accent shares rose 10.2 per cent to close up 19c at $2.11.