The housing-led consumer bust has claimed another victim, this time the Reject Shop:
The Reject Shop’s chief executive has quit after the troubled retailer announced store closures and slashed its full-year guidance to predict a loss of up to $2 million…
“The reduced earnings guidance reflects a tough trading environment in the retail sector which has continued to be impacted by low consumer confidence, flat wages, increases in the cost of living and a rapidly falling housing sector,” the company said in a statement.
“Gross margins have fallen as the expected benefits from sales and merchandise related initiatives have not landed with consumers during the half.”
Seven stores will close by the end of June after the company was unable to negotiate “acceptable” rents, leaving a network of 357 outlets. It did not say which stores would close…
“The continuing absence of real wage growth and increases in the cost of many basic expenses (including mortgage rates) ensures that competition for the discretionary spend of consumers remains high,” he wrote in a market statement.
Interestingly, the ABS on Thursday reported that retail margins fell by 0.6% in the March quarter, which highlights the challenging environment facing retailers.
