The businesses across world markets are rallying down, and retail markets have been hit in the worst manner. At the onset of the year 2020, whereas many as 161 Australian Bricks and Mortar stores in Australia have already announced their closures. It is one of the most ruthless bloodbaths in the retail market that is being witnessed in Australia. Everything began on January 7, when it was openly announced that Harris Scarfe -the great department store had publicized the closure of as many as 21 stores across the five economically sufficient states. As this bad event happened in a matter of one month when the retailer was put in receivership in December.
What is happening at the start of 2020, is the result of horror that retail markets have already seen in 2019. It was during this year many Australian businesses began to fall rampant, along with many international companies that packed the bags and moved.
In the year 2019, the retailer in Menswear – Ed Harry said that it has filed for voluntary administration, and later in the week, another Australian sportswear named – Favourite Skins gave indications that its business stakes are falling rapidly and was lying on the edge of the extinction. Favourite Skins had the plans to apply for the bankruptcy in a Swiss Court.
Muscle Coach, which is a popular fitness company in Australia also applied for Voluntary Administration after the director found the devastating diagnosis and the company accrued the debts worth $ 1 Million.
Very soon another news from the retail sector blew off the lid, when McWilliam’s Wines, which is the country’s sixth-largest wine family-owned business for over 140 years openly proclaimed that it has agreed to go for voluntary administrators.
Things did not stop here only, another blow came down the way when a famous video game chain in Australia, known by the name – EB Games took a rampant turn in announcing that it was winding up the business and shutting down 10 stores spread across the country in a matter of weeks. Retail fashion stores chain in Bardot made immediate plans to layoff the employees and shut 58 stores at various places in Australia by March.
What started off with Harris Scarfe in Australia is continuing and the wave is being intensely felt across the big and small business sectors. There is a retail apocalypse and much of it has happened as the result of malls taking to over-expansion, increase in the property rents, extremely low quarterly profits, bankruptcies resulting out from the leveraged buyouts, and to some extent, it this apocalypse has come from the delayed effects seen during Great Recession.
In the recent week of January 2020, Curious Planet, erstwhile known as Australian Geographic, owned and run by Co-op Bookshop is in the mood of closing as many as 63 stores all over Australia, after it had failed to buy the right buyer. It is something that can be called more than just serious, especially for the Australian retail market.
Following the trend of the retail apocalypse, there was Jeanswest, which made a formal entry into the voluntary administration that is going to leave not less than 988 Jobs in as many as 146 stores in Australia. KPMG, Australia was quick here to announce that the ongoing retail market conditions are far tough for businesses to survive. There is an incessant pressure from the online competition and this pressure is already moving high and up.
Retail Expert, Dr. Gary Mortimer from the Queensland University of Technology is indeed a very surprising and shocking one too. The crisis is here to stay for many years and nothing much can be done to avert this kind of nightmare.
However, Dr. Mortimer was also quick to say that this was certainly not “THE END” for the Australian retail sector. It is a serious “Market Correction” quite similar to what happened in the economic downturn of the 199os of Australia. He also pinpointed that many retail companies have continuing and persistent “Lazy Retailing” elements, which is a prominent reason for the collapse.
He further gives out the references that SuperMarkets like Coles and Woolies happened to be quite lazy retailers without entering into direct competition with each other for many years. The fascinating part is that there were no price wars too between them, until when Aldi (Who Owns ALDI) appeared on the scene, turning them into the thinking scene for investing in the stores for the improvement of distribution and expansion of private labels.
In recent months, many retail businesses from fashion and footwear had been running through the cutting-edge competition happening directly from fast fashion markets. Moreover, the fashion and footwear markets have also begun to face issues from offers of discounted departmental stores.
Dr Mortimer quickly pointed out that the fashion and footwear brands were erroneously confident of their long existence in the market or going out openly for the high discounts for beating out the competition. The increasing number of Footwear retailers are making an open call – attracting the customers with punch lines like – “Buy a Second Pair Half Price” type of promotions. All of it also goes through digital disruption.
Big Brands are closing the doors, and stores are shutting down – ultimately, it is the change event that moves and will continue to drive in the industry. Innovation needs to be worked out for acting swiftly in an incessantly competitive market scenario.
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