One of the toughest industries to make any decent money is retail.
Local suburb shops are really struggling and large ASX retail businesses aren’t finding it much easier.
According to reporting by News.com.au, yet another retailer has gone bust. Women’s fashion brand Bardot is the latest one to get into financial strife, putting 72 stores and 800 staff in danger.
It joins a line of other retailers in Australia to get into trouble this year including Criniti’s, Ed Harry, Skins, Napoleon Perdis, Shoes of Prey, Karen Millen, Benny Burger, Zanui and Muscle Coach.
There are always going to be some businesses that struggle. Not every retailer is going to be successful simultaneously. Trends change, some brands get old, some retailers don’t invest in their stores and so on. Scentre Group (ASX: SCG) centres are full of clothes stores, I sometimes ask myself how can they all be sustainably profitable?
ASX retailers have been having difficulty growing revenue. Nick Scali Limited (ASX: NCK) has said same store sales are going backwards. Reject Shop Ltd (ASX: TRS) is struggling to gain traction. Kmart Group (which includes Target) within Wesfarmers Ltd (ASX: WES) suffered a profit setback in FY19. Even the best retailers like JB Hi-Fi Limited (ASX: JBH) are reporting slowing sales growth.
City Chic Collective Ltd (ASX: CCX) has been a strong performer after it divested some loss-making businesses and is focusing on the growth area of plus-sized female clothes. It generates a large amount of revenue online and is growing in the large US market.
Myer Holdings Ltd (ASX: MYR) is currently going through a turnaround process with a focus on profitable sales and better quality service.
BWX Limited (ASX: BWX) is beginning to benefit from the new CEO’s leadership and global expansion.
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Motley Fool contributor Tristan Harrison owns shares of WAM MICRO FPO. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended Scentre Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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