Another retail chain shutters

Via the AFR:

Beauty and home products retailer Crabtree & Evelyn is the latest retailer to fall victim to lower discretionary spending by under-pressure households, with restructuring experts KordaMentha appointed to close down the entire Australian network of stores.

…The company has 12 stores across Australia in the country’s most prominent shopping centres…Rents for specialty retailers have been rising but sales are growing by less than 2 per cent, increasing margin pressure on retailers who have already been grappling with higher labour and energy costs.

…Crabtree & Evelyn employed around 100 staff, with $6.44 million in employment costs in 2017, down from $6.57 million the previous year.

Only small of course but typical with many more to come as the Bad Santa lands. From Citi:

Comments

  1. I for one deeply lament the demise of a bricks and mortar retail business relying purely on selling $30 hand creams. For example there’s no way they could sell those online for half the cost and as for posting them out to customers, no way, too messy! The postman would end up looking like Reusa on a Saturday night.

    • Lol. Future generations will laugh (or cry) at the consumption-based lunacy that has prevailed these past few decades. It’s like Rome at its decadent peak. Masses of bubble-headed idiots everywhere.

      • Never discount the value of vanity. There have been ancient egyptian tombs found with face creams in them.

        Crab Tree and Evelyn is a brand with a tired ye olde cottage feel to it. One of its main exposure points has been in gift stores. Basically it was the product granny gave her 17 year old granddaughter and the kid sniffed said “thanks Gran” and promptly stuffed under the bathroom sink and forgot about.

        Many of the gift shop catalogues are pushing body care and candles as the under $50 purchases. They are a lot cooler and more fashionable than old Crab Tree and Evelyn.

        I wouldn’t say this is one of the signs of the apocalypse but more a case of a company which isn’t adapting to the times, it needs a refresh and some good advertising – but it looks like they’re too late to do it now.

    • There are worse. Some are based on selling overpriced stationary (smiggle). The thing that most seem to forget is that this is practically the fashion sector where as soon as you stop being the hottest new thing, you go broke.

      I don’t disagree with MBs view on retail sector in general, but using examples in a volatile sub sector is not very convincing. You could make the point easier with myer continuous profit downgrades for example lol.

      • But they have to make the point with every tiny piece of info they can. Content to create and all that.

  2. Last year I noticed few shops closing at Macarthur shopping centre and commented on that in Nov and Dec. I guess low income areas felt the pinch first and now we will probably see more widespread closures around the country. Too much debt and it is spread across all demographics.. no one will be spared this time around.
    waiting on Mayer to send ASX an announcement around missing its forecast.. lol

  3. Have been watching the restaurant area in Crow’s Nest slowly contract over the past 12 months but has definitely gathering pace in the last few and for lease signs adding up. Will be interesting to see if anything opens in the new year.

    • boomengineeringMEMBER

      Every time a recession looms Crows nest and Militarily Rd shops close. Used to use it as a canary.

  4. @Macrobusiness-

    Please stop this delightful deluge of good news,

    Wifey will be home soon and will expect that I’ve at least attempted some of the chores.

  5. It is bizarre that they are shutting their Singapore, Canada, and Australia outlets at the same time! They decided to shut their Singapore outlets in December 2018 or earlier:

    7 Jan 2019

    Crabtree & Evelyn Singapore is in the process of closing all of its 12 stores on the island and will move exclusively online. The closures follow the placing of the Canadian business into bankruptcy protection last month, resulting in the closure of its 19 stores there

    https://www.retailnews.asia/crabtree-evelyn-singapore-closes-all-stores/

    4 Jan 2019

    Housewife Lillian Loh

    “They have the best hand creams and soap. At least I can still buy them online,” said Ms Loh, 34.

    https://www.straitstimes.com/singapore/crabtree-and-evelyn-to-close-stores-as-it-goes-online-only

    • After she has snapped up some hand cream online, she can snap up some Australian property – probably by phone to a proxy bidder at an auction.

    • Crab Tree and Evelyn have been big in gift stores for decades.

      They might be better off having other people do the bricks and mortar store side of things as they only need a metre of space or so in gift shop to sell their products.

      They will still have the retail exposure by wholesaling to gift stores and if their restructure involves a serious push into the online space, it could be a really smart move.

      • Looks like retail and all the management that goes with it, got too hard. They might also have looked at the % of profit to effort and decided it wasn’t worth it.

        I’d say they are going stick with wholesaling to gift stores, do the trade shows and online and keep the one flagship English store (stay true to their original heritage/branding inspiration)

        Looks like a good move to me – let the gift shops do the bricks and mortar side and reduce the companies exposure and expenses.

  6. Part of the reason might be is that their products last forever, I bought some of their shaving cream five years ago and it’s still going.