All things must pass
Greetings, I write this en-route to our global retail study meeting with Ebeltoft Group and to Shoptalk Europe, naturally enough this offers a perspective into the current and future thinking within our sector and to the broader thematic of change in retail.
Also, a chance to look back at the changes within our retail community and I think no results of late summarise the changing landscape better than that of Premier Investments.
Although, one small digression if I may, the general narrative of retail, and broader business, is that brands last forever, and of course we know that this is just not the case. As Collins and Porta’s wrote about in that seminal book “Built to Last” that only a very few brands last longer than the average generational span. This is also disrupted and shortened in our times quite substantially with the rise of digital technology and its inherent obsolescence.
As George Harrison once wrote, “All things must pass” and they do (this also appears to be the case in the tale of two or more cities). This is where the Premier results make the point.
I am sure you have read the results, with Premier reporting full-year net profit of $105.1 million, just missing analyst estimates of $111.7 million as weak sales of clothing brands Portman’s, Dotti, Jacqui E and Jay Jays offset strong growth at its Smiggle stationery chain, Peter Alexander sleepwear stores and in online sales.
The group reported sales revenue growth of 3.98 per cent to $1.1 billion.
Underlying earnings rose 7.3 per cent to $136 million, beating expectations of about $130 million, while the company lifted its final dividend by 2¢ to 27¢ a share.
At the top line, a pleasing and solid result however let’s not miss the stupendous growth of Smiggle, very skilfully becoming a global brand with Peter Alexander not that far behind in ambition, if not the scale. Which brings me to my point. Some analysts appear to suggest that Premier relying purely on a portfolio excluding Smiggle and Peter Alexander would have reported a double digit decline in sales.
What of some of the older brands within the Premier Investments family?
Are they at the latter or more mature stages of their lifecycle or will a few more seasons of savvy tactical marketing and astute accounting cocoon them from the ravages of a fast changing and fickle environment?
We like to ask our clients; what part of your business is customised (if any?) and what part is commoditised?
At what stage of your brand lifecycle is your brand at and at what point is brand reinvention and reinvestment necessary?
Or in some cases do we lay that brand gently to rest and perform the last rites while welcoming or investing into a new brand within that brand family?
I know its anathema to some brand strategists who furiously attempt to pump oxygen into the aged somewhat lifeless brand corpse.
Resources are finite, time is finite, customer attention is finite and brands are born, live and die, naturally or are devoured in that same context.
After all, all brands must pass.
Brian Walker is founder and CEO of Retail Doctor Group, Australian elected member of the global retail expert’s alliance Ebeltoft Group, and can be contacted on (02) 9460 2882 or [email protected].