The Athlete’s Foot to buy back select franchise stores
The Athlete’s Foot is shifting its focus from franchising as parent company Accent Group plans to buy back select franchised outlets in a move to boost its company owned retail presence.
In FY18 the corporate store footprint of CBD flagship and new outlets stores grew from 12 to 28 outlets. In the next financial year the business expects up to 10 more stores to be acquired from franchisees who are willing to sell.
The footwear retailer has also revealed it will buy back the master franchise in New Zealand, along with nine stores – three of them franchised. This is set for October 2018.
The investment required for the buy-backs and the New Zealand business, will be funded by cash, free cashflow and existing debt facilities.
Re-calibrating the retail network to a line-up of corporate stores is expected to improve customer experience, to enable the business to respond quickly to market trends, and deliver improved brand leadership and a boost to sales.
The group saw total sales, including The Athlete’s Foot (TAF) franchise sales, reach $861 million, while company owned sales reached $676 million, up 9.3 per cent on the year prior.
Digital sales for TAF rose by more than 100 per cent since last year, while corporate store sales “significantly outperformed” their franchised counterparts, reflecting investments in store fit-outs, inventory and people.
“In the face of challenging consumer environment and increasing competition from international entrants, our strategy of delivering a best in class customer experience has delivered strong results,” Accent Group chief executive Daniel Agostinelli said.
“We have made good progress against our growth plans, including increased digital sales and new stores along with a significant improvement in gross profit margin through vertical brand sales and reduced discounting.”
The group has earned a record net profit of $47.1 million, up 17.9 per cent year over year.