Universal Stores to expand fashion retail empire amid changing customer spending: CEO
SYDNEY, AUSTRALIA: Universal Stores Holdings (UNI), Australia’s leading youth and young adult fashion retailer, has announced its plans to expand its presence and product range in the face of changing customer spending habits and cost of living pressures.
The company, which owns and operates three brands: Universal Store, Perfect Stranger and THRILLS, has reported a strong financial performance for the 2023 fiscal year, with a 26.5% increase in group sales and a 21.9% increase in underlying net profit after tax.
Speaking at the Annual General Meeting (AGM), UNI’s CEO Alice Barbery said the company has been adapting to the shifts in consumer preferences and behaviour, especially in the regional areas of eastern Australia, where spending has declined compared to the metropolitan and CBD locations.
“We have taken proactive steps to refine our product offerings in these markets, placing heightened emphasis on catering to preferences of price-conscious customers. We have also maintained our resolute commitment to promotional discounting discipline, which has helped us preserve our gross margin of 59.0%, up 70 basis points versus FY22,” she said.
Barbery also highlighted the company’s focus on managing its cost of doing business (CODB) through various initiatives, such as optimising store labour and enhancing distribution centre productivity. She said the company’s inventory remains well-managed and fresh, ensuring customer satisfaction and loyalty.
The company’s long-term growth strategy remains intact, despite the challenging market conditions, and its investment in growth is accelerating in certain areas of the business, Barbery said. These include investing in its people, technology, store rollout and direct-to-customer (DTC) channels.
“We are building depth and skills in our teams to execute our growth plans and manage risks. We are also leveraging technology to optimise our operations and improve customer service. We have opened eight new stores during the year, five Perfect Stranger and three Universal Store, and acquired 10 THRILLS stores, bringing our total group stores to 95. We expect to have 100 stores by the end of this calendar year, and 104-107 stores by the end of FY24. We have also moved CTC into a new head office and distribution centre in Byron Bay, and made material progress in our DTC growth plans,” she said.
Alice Barbery expressed confidence in the company’s future prospects, saying that all three of its businesses have the potential for strong growth through customer acquisition, physical and digital extension and product and brand development. “We are excited about the opportunities ahead of us, as we continue to deliver on our vision of being Australia’s premier owner and operator of youth and young adult fashion retail brands,” she said.
Highlights:
- OnGroup sales $263.1m up 26.5% versus pcp, cycling store closure periods during H1 FY22
- 8 new stores opened during FY23; 5 Perfect Stranger & 3 Universal Stores – combined with 10 acquired THRILLS stores, brings total Group stores to 95 (excl. webstores)
- 8 Perfect Stranger stores trading by June FY23 with store roll out accelerating
- Gross margin of 59.0%, up 70bps versus FY22
- Underlying Group net profit after tax up 21.9% to $25.6 million
- Underlying earnings per share of 35.2 cents
- Underlying cashflow from operations after capex of $43.0m, up $7.9m versus FY22
- Net cash of $6.6m at 30 June 2023
- CTC acquisition outflow $18.3m includes cash consideration of $21.2m, plus transaction costs of $1.8m, less $2.6m CTC cash acquired and $2.1m pre-existing trade payable by US to CTC at completion
- Dividends of 22.0 cents per share paid in relation to FY23 results.
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