The retail industry received the surprise news yesterday that Premier Retail will close 50 of its stores in Australia and New Zealand and cut staff numbers, as part of new CEO Mark McInnes’ efforts to return the business to profitability.
The company, which owns Just Jeans, JayJays, Portmans, Dotti, Jacqui-E, Smiggle and Peter Alexander, didn’t say which stores would close or exactly how many jobs would be lost.
McInnes did say the company would close unprofitable stores as leases expire and would also close its state offices.
According to the new CEO, Premier Retail found recent trading to be slow, without the usual pick-up in sales during the July school holiday period. The weak retail environment meant cost reductions in the face of continued tough conditions were necessary, he said.
“Margin has remained under pressure, as industry wide discounting has increased.”
Premier is planning a 50-store expansion over the next three years however, with a focus on its high profit margin Peter Alexander and Smiggle brands.
The company said the store closures and other changes would incur one-off charges of between $14 million and $16 million in FY2011.