While some pockets within the retail sector have defied current consumer headwinds, notably JB Hi-Fi (ASX: JBH) which delivered one of its strongest-ever 1H FY25 results, clothing retailers both in the listed and unlisted space appear to be doing it tougher than most.
Unlisted South African owned fashion house, Country Road Group, has witnessed a 16% sales slump for the first two months of 2025. This is after experiencing a 7.8% drop in group sales in the 26 weeks to late December.
Other brands within the Country Road stable of brands – Witchery, Mimco and Politix – comprising over 650 stores - are also doing it tough.
18-month recession
Commenting from Cape Town, Zaid Manjra of Country Road Group’s parent company, Woolworth Holdings – which recently offloaded chain store David Jones - reminded investors that Australia has been in “retail recession” for the last 18 months, with real GDP growth at 32 year lows.
Nowhere is that retail slump more prevalent than in the women's clothing sector, which has witnessed a litany of recent closures.
The latest casualty is unlisted fast fashion chain Ally Fashions which operates 160 stores Australia-wide.
Following the Federal Court’s appointment of Jeff Marsden and Duncan Clubb (BDO Australia) as liquidators on 28 February, 51 stores were immediately shut down.
Mosaic Brands on ASIC radar
The closure of Ally Fashions follows the recent collapse of a slew of high-profile retailers, the most recent being the high-profile $318 million collapse of Mosaic Brands (ASX:MOZ).
Boasting 763 stores across nine brands including Autograph, Noni B, Katies, Millers and Rivers, Mosaic was placed in administration when a buyer was not forthcoming.
While the operation was initially placed in Safe Harbour – protecting directors from liability and potentially debt while trading insolvent – Mosaic’s collapse has since triggered a parliamentary hearing which demanded a full scale enquiry by the regulator, ASIC.
What irked Labor Senator Deb O’Neill was the treatment of suppliers with repeated non-payments only days before their collapse.
It’s understood that ASIC may act over the collapse after chair Joe Longo spoke with Mosaic’s administrators.
Mosaic Brands has a market cap of $6.4 million. The share price is down 76% over one year.
How other listed fashion retailers fared
With the exception of women's fashion retailer, City Chic (ASX: CCX) which has seen its share price climb 48% year to date, these other ASX-listed clothing retailers are trading on average 21% lower year to date.
- Myer (ASX: MYR) share price up 6% in one year and down 35% year to date.
- Merino & Co (ASX: MNC) share price down 5% in one year and down 34% year to date.
- KMD (ASX: KMD) share price down 30% in one year and down 12% year to date.
- Step One (ASX: STP) share price down 50% in one year and down 29% year to date.
- City Chic (ASX: CCX) share price down 58% in one year and up 48% year to date.
- Accent Group (ASX: AX1) share price down 5% in one year and down 20% year to date.
- Universal Group (ASX: UNI) share price up 69% in one year and down 5% year to date.
