Fashion Retailer to Shut Flagship Stores Amid Sales Slump

Country Road, an iconic apparel brand, will close outlets around Sydney due to falling sales, forcing its South African owners to cut back on retail.

The company's landmark store in central Sydney's Queen Victoria Building will be closed as it seeks to reduce costs.

It will also close its sibling business, Trenery, in Sydney's upscale Mosman, while the Pitt Street Mall location will close in 2028 when the lease ends. 

Woolworths, Country Road's South African owners, had already disclosed disappointing sales from the Australian brand.

Sales fell by 6.2% in the first half of the fiscal year 2024-25, and another 8% in the 26 weeks to December 29, while operating profits fell 71.7 percent to $14.2 million. 

Country Road was launched in 1974 as a smart-casual men's, women's, and children's apparel store that also sold homewares and accessories.

It blossomed into an Australian lifestyle brand known for high-quality garments, accessories, and homewares, becoming the first major Australian brand to expand into the United States.

Woolworths, a South African company, purchased Country Road and Trenery in 2014.

Country Road's recent declines are consistent with the downfall of dozens of other retailers. 

Mosaic Brands, which owns Millers, Rivers, Crossroads, Katies, Noni B, and Autograph, entered voluntary administration in October 2024.

Mosaic's total debt was more than $318 million, according to a letter to creditors sent in February.

Jeanswest, an iconic retailer, also stated it was hit by a "perfect storm" of causes when it closed its stores in March, laying off 600 employees. 

According to CreditorWatch's most recent insolvency data, tax cuts and interest rate relief are gradually affecting businesses' bottom lines.

CreditorWatch's May data reveal a decrease in two major metrics of business stress, insolvencies and B2B payment defaults, implying that the July 2024 tax cuts, recent interest-rate drops, slower inflation, and fiscal support measures are beginning to relieve some pressures on Australian firms.

CreditorWatch CEO Patrick Coghlan stated that the May data on defaults and insolvencies was positive, although other industries remained under pressure. 

"This levelling off of insolvencies has been long awaited and is very welcome, but we need to remember that several industries still face significant challenges, particularly those exposed to discretionary spending," said Mr. Johnson.

"Post-COVID, inflation has reached 30-year highs.

"Those rapid price increases across the economy don't reverse when the inflation rate comes down again - the higher prices are locked in and remain as permanent pressures for businesses."