Profits slide over 30 per cent on spending slowdown

In another signal of flagging online retail sales, fashion website The Iconic announced on Thursday it had made 72 roles redundant, or about 7 per cent of its workforce. It brings its total number of job losses this year to nearly 150, following an earlier round of redundancies in February.


The e-tailer, which was recently taken over by new chief executive Jere Calmes following the departure of Erica Berchtold, recorded softer-than-expected sales last quarter, reporting a 9 per cent drop in net merchandise value.

A spokeswoman said the company was consulting affected staff over the coming week to review any opportunities for redeployment within the business, which employs around 800 people.

Berchtold left The Iconic to take up the top job at Best & Less but that fell through when the discount chain became the subject of an off-market takeover by veteran retailers Brett Blundy, of the Sanity music brand, and Ray Itaoui.

Retail sales figures from the Australian Bureau of Statistics released this week show overall retail spending increased by 0.5 per cent in July, but underlying growth in the retail sector remains subdued with household goods sales continuing to decline.

A trading update on Harvey Norman’s sales in July also points to a tougher outlook, with comparable sales down in all of its global markets. Australian franchise sales were down by 12.6 per cent, while New Zealand stores had dropped by 4.7 per cent compared to last July.

Rival ASX-listed electronics retailer JB Hi-Fi surprised the market earlier this month with a better-than-expected result, but chief executive Terry Smart was under no illusions about the conditions, saying the company expects them to remain challenging for some time. 

Harvey Norman’s profit drop wasn’t enough to spook investors, however, with the stock up 4 per cent in early afternoon trade as the overall numbers beat analyst expectations.

E&P Capital’s Philip Kimber said the result was mixed. “The Australian Franchisee [segment] was better than expected, but the offshore businesses were generally worse than expected,” he said.

Shareholders will receive a final dividend of 12.5 cents per share, down from 17.5 cents last year, to be paid on November 13.

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