Retail Apparel Group’s low risk strategy paying off

tarocashA focus on all year seasonality and store accessibility has helped menswear specialist retailer, Retail Apparel Group, post record sales across its store network ahead of Christmas.

The menswear specialist retailer has posted company record sales across its 391 stores with revenue up over 15 per cent during Spring.

The strong year-to-date trading follows the group posting record EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) of $36 million in the 2016 financial year, off the back of the record revenue growth to $324 million.

Speaking to Inside Retail, Gary Novis, CEO of RAG who owns brands including Tarocash, Yd., Connor, Johnny Bigg and Rockwear, said that the brands low risk product strategy meant it didn’t need to rely on blaming outside economic factors or competitors efforts hitting its bottom line as an excuse.

“We are delivering on-trend clothing in the mid-market and value segments, with solid, predictable like-for-like sales and profit growth, accompanied by a steady program of new store openings across our five brands,” he said.

Novis, a retail veteran with over 25 years of experience at groups including Woolworths Holdings, David Jones and Specialty Fashion Group, said having 80 per cent of its product mix as all year round meant RAG’s results were not greatly affected by the issue of seasonality.

Being where its customers are underpins RAG no-fuss attitude towards optimising its store network. The majority of its stores are located in high foot traffic areas within regional and suburban shopping centres, which Novis said allowed their centralised management function to leverage relationships with key landlords. RAG is now seen as a tenant of choice, allowing them to secure premium sites in centres.

ydPrimarily focusing on suburban locations doesn’t necessarily mean cheaper rents either – but is more a case of relativity to turnover in shopping malls. “It’s important to understand that people like to shop locally,” said Novis. “They don’t like to get into their car or take public transport and always drive to the major shopping centres.

“We want to position ourselves where our customer is so that he or she at their local centre when they’re doing their shopping have the opportunity to be close to home.”

RAG’s solid performance clearly shows it understands the specific and different demographics it’s targeting. Tarocash, the foundation brand of RAG established in 1987, is a leading mid-market fashion brand with 116 stores catering for 18 to 35 year old males, while Yd. targets ‘fashion conscious’ 14 to 27 year olds through its 97 stores. The group’s fastest growing brand Connor, with 133 stores, is aimed at Aussie males between 18 and 40 years of age, with “the scope to grow to 250 stores across Australia.”

The introduction of Johnny Bigg’s  two years ago – aimed at servicing big and tall men looking for fashionable clothing – represents an area “neglected for far too long” according to Novis who said RAG plans to open at least 10 new stores a year for the foreseeable future. “We should be positioning those stores where our customer is, so we will be in Penrith, Liverpool and in Toowoomba for example – anywhere our customer is and believe there can be at least 100 stores there,” said Novis.

rockwearThe recent acquisition of Queensland retailer Rockwear, which sells activewear to active 18 to 40 females, represents the group’s entry into the female athleisure wear market. The brand couples high performance with technical fabrics and Novis thinks hits “a sweet spot in the market where we are supplying women with high quality, great value athleisure wear in a fast growing market segment.”

When asked where RAG views digital within its strategy, Novis said a lot of its online initiatives were focused on getting customers into stores.

“The thing about a guy is while he does like to shop online, he also likes to shop instore and get advice from our fitting specialists or get clothing tailored for him while he waits,” he said.

“So while online is a very important part of our online operations what we tend to do is be very strong on click and collect – have customers collect and try products instore.

“Having said that we’ve just invested a huge amount of money into a new platform that will allow us to be world class on mobile – most guys now are not even using their computer, they’re shopping off their phones.

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