Australia / Analyst Insights
Threads Count: Multichannel Strategies Boost Clothing Retailers

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by Anh Nguyen
Apr 01 2019

Clothing retailers have faced fierce competition not only from bricks-and-mortar retailers and online retailers, but also from international giants such as Zara, Uniqlo and H&M over the past five years. Despite the doom and gloom in some parts of the retail sector, some retailers have counteracted heavy competition and boosted profit. In particular, the Clothing Retailing industry’s two major players have significantly outperformed the overall industry. Industry-related revenue for Noni B Limited is expected to grow at an annualised 55.3% over the five years through 2018-19. Additionally, industry-related revenue for Woolworths International (Australia) Pty Limited, trading as Country Road Group, is expected to grow at an annualised 7.8% over the same period. These companies have undertaken extensive acquisition and multichannel retailing strategies to achieve this strong growth.

Australians are buying online more frequently due to the convenience, offers and promotions available, and advances in secure payment options and anti-fraud protections. Customers also research and compare clothing products online through websites and mobile applications, and therefore demand an interconnected shopping experience between online and physical stores. In response, retailers have continued to invest in online services and evolve more cohesive omnichannel strategies. Both Noni B and Country Road Group have frequently reviewed their store footprints, closing underperforming stores, and overhauling the layout and design of all stores. In 2017, Noni B appointed a general manager exclusively for online sales to coordinate all brands, while Country Road Group deployed new supply chain technology (Manhattan’s Warehouse Management) to improve product availability and customer satisfaction. As a result, revenue from digital channels grew by 27.9% (9.0% of sales) for Noni B and by 20.0% (17.7% of sales) for Country Road Group over the six months through December 2018.

Many retailers have undertaken acquisition strategies to engage with new customer markets, and continue growing and supporting sustainable success. Additionally, large-scale businesses can achieve economies of scale and reduce prices to encourage customer purchases. Noni B has benefited from significant acquisitions over the past five years. Its acquisition of Pretty Girl Fashion Group in September 2016 resulted in the company’s total revenue increasing by 17.6% in 2017-18. Additionally, total group revenue increased by 140.4% over the six months through December 2018 following the acquisition of five brands from Speciality Fashion Group in July 2018. Country Road Group has also gained significant market share from acquiring clothing brand Witchery and accessories brand Mimco in October 2012, and designer menswear chain Politix in October 2016. Despite Country Road’s womenswear segment performing poorly, the group’s sales increased by 1.7% in 2017-18. In this year, Politix was the standout performer, with Mimco and Witchery continuing to grow strongly.

Over the next five years, industry revenue is anticipated to rise at moderate pace while competition intensifies. Due to the industry’s saturated market and a softer retail consumer environment, Noni B and Country Road Group will have to offer more innovative products, implement new technologies, and use unique business and marketing strategies to grow their customer bases.

Related companies:

Noni B Limited

Woolworths International (Australia) Pty Limited

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