OUTDOOR adventure gear company Mountain Designs has made the “difficult decision” to close one in three stores in 2018.
Shops at Joondalup, Wagga Wagga, Toowong and Dubbo closed on January 7 followed by branches at Cannington, Bendigo, Toowoomba and Wollongong on January 10, according to a statement from the company.
Stores at Pacific Fair, Ashmore, Bunbury, Moorabbin and Warringah will also close, although a date is yet to be confirmed.
“Like many Australian retail businesses at present, Mountain Designs is adapting to changing pressures within the retail sector that are influencing customer buying practices,” the statement read.
“Some of these include increased competition, price discount fatigue, a decline in national consumer foot traffic, and new broadening technology platforms and online services.
“Mountain Designs is making operational and strategic adjustments to counter these.”
Remaining stores will continue trading as normal and the company is not in administration — however, the Courier Mailreported it suffered a $7 million loss in 2016.
The statement said the financial loss was attributed “to the flow-on effect from exiting the New Zealand retail industry in 2014/15 as well as the current tough trading conditions in the Australian retail industry”.
It follows news this week that footwear brand Diana Ferrari would close many of its stores in the following months.
Of the 17 Diana Ferrari stores, “at least four” will be rebranded by parent company Munro Footwear Group while the rest will be closed, a spokeswoman said.
The six Diana Ferrari clearance stores will remain open and the brand will maintain an online presence.
Earlier this month, Australian plus-size label Maggie T, which was founded in 1981 and fronted by actor Maggie Tabberer, collapsed into voluntary administration.
Luxury handbag brand Oroton received a takeover bid from a major shareholder late last month after going into administration in November.
Other big-name retailers that have faced recent collapse include Topshop and Topman Australia, Marcs, David Lawrence, Herringbone, Rhodes & Beckett, Pumpkin Patch and Payless Shoes, while Speciality Fashion Group, whose stable of brands includes Katies, Millers and Rivers is in the process of closing more than 300 stores.
Retail experts Dr Louise Grimmer and Dr Gary Mortimer said “right-sizing” and “downsizing” would be the two most frequently used terms in retail boardrooms in 2018.
University of Tasmania lecturer in marketing Dr Louise Grimmer said there were a lot of factors behind the retail trend.
“Much of the finger-pointing was directed at Amazon, the surge in online shopping, as well as the entrance of global fast fashion into the Australian retail landscape,” she said.
“However, if you scratch the surface a little deeper it is evident that high retail rents, a lack of prime real estate, increasing inventory and wage costs are also major contributing factors.
“Retailers have responded in two ways: ‘right-sizing’ their fleet of stores — simply closing underperforming and unprofitable locations, or ‘downsizing’ — shrinking their footprints.”
Queensland University of Technology associate professor Gary Mortimer said he expected more and more retailers to get on board.
“It make no good business sense to carry businesses that are haemorrhaging capital and draining overall profit,” he said.
“Late last year, Specialty Brands, owners of Katies, Millers, Rivers and Crossroads, announced closing 300 or their 1000 stores. In the US, retailers Sears announced the intended closure of 39 stores and Kmart, 64 stores.
“Meanwhile, embattled Myer continue to flag more stores for closure as they implement their turnaround strategy.”
Both retail gurus agreed that smaller stores meant smaller rents, and greater opportunities to snap up prime locations.
They also equate to better convenience and accessibility for shoppers.
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