Thursday, August 2, 2012

TOGETHER WE STAND, DIVIDED WE FALL


COUNTRY ROAD, WITCHERY AND MIMCO MERGE

The Australian market is showing it is not matching the organization and operations of large leading international corporate brands such as Zara and Topshop. With more brands such as H&M, Victoria’s Secret and Abercrombie and Fitch to setup stores in Australia and will   be Melbourne or Sydney based. 
  
The consumer buying and habits have shifted with Fashion. Internet buying is becoming the more preferable choice, due to more competitive prices and free shipping offering a more competitive approach then other competitors. This is shifting trend is picking up more momentum due to a younger generation adaption of technology.  Business and companies don’t have a chance unless they adapt and embrace this change. The traditional business models and methods are on the verge of becoming extinct and are simply out date and had there time. 

This is why COUNTRY Road has agreed to buy fellow fashion retailer Witchery Australia for $172 million. The acquisition will be partly funded by through a one-for-two pro-rata renounceable rights issue at $2.66 per share to raise $92 million.Country Road's 88 per cent shareholder Woolworths has said it will participate in its pro-rata share of the entitlement.

The Witchery Group comprises the Witchery and the Mimco brands. Witchery has been operating for 40 years and offers women's, men's and children's clothing and accessories. It has 210 stores across Australia, New Zealand, South Africa and Singapore. Mimco is an Australian designer of accessories and operates 96 stores in Australia, New Zealand and Singapore.

Online articles stipulate that this will challenged the retail environment and shoppers will be the winners as three popular Aussie labels combine to tackle the might of a European fashion invasion. Creating a more substantial player in the fashion industry. But will they. It is risky and by just combining, will it make a difference in the long term ?


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