FY2019 sales were A$306.5 million (US$207 million), driven by a particularly strong performance in Asia.
The company revealed its global wholesale strategy – part of the overall plan – has so far been successful, with launches in South Korea, Thailand, Indonesia, Canada, the Philippines and the United Arab Emirates. To date, a total of A$17 million worth of orders from its wholesale partners has been received, with the potential to deliver between A$35-A$45 million in retail sales to consumers in H1 2020. Smiggle said it is also in advanced discussions for new wholesale partners in other markets.
Online growth for the year continued its upward trajectory, contributing 18% towards sales in the UK and 10% of sales in Australia. During 2019, a proprietary transactional website was launched in New Zealand, and the brand is also now available in Europe through Amazon in France, Italy and Spain.
In Asia, the first concession stores were opened in Singapore, and final negotiations are taking place for up to five more across the region by the end of this calendar year. Smiggle also opened seven new standalone stores globally during FY2019.
Somewhat of an antidote to the good results, Smiggle parent company Premier Investments warned that despite the brand’s success in the UK market, “recent political developments in the country, including the appointment of Boris Johnson as Prime Minister, have added further political and economic uncertainty to an already distressed retail and landlord environment”.
The firm continued: “To maximise the group’s leverage with landlords to achieve significantly lower rents in a very distressed and uncertain macroeconomic environment, the Premier board has decided to exercise the majority of the lease break clauses that were strategically negotiated as a risk mitigation strategy upon entering the UK market. As a direct result, the Premier board has prudently decided to accelerate the UK store depreciation to lease break dates, incurring a one-off Brexit accelerated depreciation and associated costs charge of A$25.9 million (pre-tax) in FY19.”