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While this growth is exciting, the
Group continues to maintain a
strong store presence with $14
million expenditure for new stores
and refurbishments to meet the
demands of our customer base.
The focus on improving logistics
resulted in the consolidation of the
Group’s logistics capabilities into
a single location. Centralising our
logistic capabilities allows greater
flexibility in how we replenish our
stores, while keeping unit costs
low. We have also continued the
journey of product development
increasing our ability to stand apart
from our competitors, providing
our customers with an increase in
unique and differentiated products.
We are still optimistic about the
purchase of Rivers and still see it as months, as the brand rebuilds its
a fantastic opportunity. Significant
efforts have been undertaken to
integrate Rivers into the Group
and make it profitable. The focus
remains on improving product,
reinvigorating the store environment
and managing inventory levels.
We have invested in our online
capability and are increasingly seeing committed to reinvest cash and has
the physical and digital worlds come
together in a seamless shopping
experience. We have also invested
in click & collect which allows our
customers access to products where
and when they want it.
The Australian retail landscape
remains highly competitive, and
we still see substantial discounting
in our core demographic markets.
The Group did report a Net Loss
After Tax of $4.5 million largely
due to the EBITDA loss of $21.6
million from the transition of the
Rivers business. Despite this, the
Group achieved margins of 58.6 per
cent and the Group’s balance sheet
remains financially sound with net
debt of $27.8 million at the end of
the financial year.
The Group ended the year with
1,086 stores. We opened 29, closed
or consolidated 38, and invested
heavily in our online presence. We
remain Australia’s largest retailer
of women’s apparel, which gives us
significant influence in managing
our future costs.
The Group is now looking to move
away from discounting, and instead
focus on delivering an enhanced
customer experience, together with
improved product quality.
Looking Forward
It is expected that the financial
results for Rivers will improve
considerably over the next 12 to 24
reputation for quality and comfort at
reasonable prices. We are confident
that we have turned the corner in
the revitalisation of the Rivers brand. Specialty Fashion Group and I am
The Board remains committed to
investing in our strategies to deliver
an enhanced return in future
years. On this basis, the Board has
not declared a dividend.
We continue to cautiously manage the
Group’s risks. Cotton price volatility
is no longer the threat it was, but
the Group is affected by movements
in exchange rates, particularly with
the US dollar. The Group operates a
hedging program and is fully hedged
for the 2016 financial year at an
average exchange rate of 79 cents.
I have now been Chair of this
Company for 10 years, and
consistent with our ideology to
keep the Board re-invigorated and
renewed, I announced last month
that I, together with Ian Miller will
retire at the forthcoming AGM at the
expiry of our respective terms. This
means that over the past 4 years
we have changed all but one of the
Board’s non-executive directors,
ensuring growth and fresh thinking.
It has been an absolute pleasure
for me to be part of the Specialty
Fashion Group story and Ian and
I retire in the full knowledge and
confidence that the Company is
in an excellent position to grow
profitably into the future.
On behalf of the Board, I would
like to thank the 5,000 team
members whose tireless efforts
underpin the success of the Group.
I would also like to extend my
appreciation to the shareholders for
their ongoing support.
As this is my final report as
Chairman, I would like to thank
my Board colleagues, management,
and all staff for their support during
my period as Chairman. I am very
proud to have been associated with
confident that under its talented
CEO Gary Perlstein and his Team
the company will go from strength
to strength.
I would like to pay special tribute
to Ian Miller for his exceptional
leadership and contribution over
the many years he has served the
company.
Geoff Levy AO
Chairman
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