Accent Group Share Price Soars on Business Update (ASX:AX1)
Navigating the retail shutdown has been no issue for Accent Group Ltd [ASX:AX1].
The share price of the footwear group is up 33% today. An incredible result considering their retail stores have been shut for a month now.
As a shoe retailer, naturally it was a tough decision to make. One that plunged the business into short-term uncertainty.
Today though, Accent has revealed that things aren’t nearly as dire as they could have been.
See, despite the store closures, sales are still holding strong. It’s all thanks to an incredible surge in digital buying.
A ‘seismic’ shift
Up until now, Accent has certainly used digital as part of their sales mix. As the company notes, they were making $250,000 worth of sales per day online prior to the store closures.
Since this lockdown though, the company has seen just how valuable digital can be.
Throughout the past fortnight, Accent’s online sales have averaged $800,000 to $1.1 million worth of sales a day!
Truly a remarkable outcome. One that took both time and money to get in place. Preparation that has paid off in spades.
As Accent’s CEO, Daniel Agostinelli notes:
‘After years of investment by Accent Group in our digital team and technology, I am delighted with the growth in our digital sales. It is clear that there has been a seismic and most likely enduring shift in consumer behaviour away from traditional shopping centres to shopping online.
‘With 18 websites and our leading digital capability, Accent Group is capitalising on this trend. We will continue to drive digital growth as the number one priority in our company.’
Clearly, management sees its future in this digital space. A transition that has been accelerated by this COVID-19 crisis.
But that doesn’t mean Accent has given up on bricks and mortar entirely, either.
Returning to normal
Not only did they disclose the record online sales, but Accent also detailed its plans moving forward.
With talk of restrictions soon to be eased, Accent is set to gradually re-open its stores. A process that will still take into account on going safety measures.
As such, it will be a slow but hopefully steady return to normal. Giving Accent every opportunity to capitalise upon their recent online success.
Because of this, the company may make adjustments as necessary. Stating that they will be re-evaluating the size and format of their store network. Hoping to strike the right balance between physical and digital offerings.
So don’t be surprised if Accent looks to shake things up a little moving forward.
It won’t be the end of their physical stores, but it sounds like change is likely.
Suffice to say, Accent is proof that retail stocks still have some incredible potential. Even in the midst of a wider market downturn. A truly contrarian stock.
It is an example of what we often refer to as an ‘edge of the bell curve’ idea here at Money Morning. Themes or trends that you will rarely, if ever, see discussed in the mainstream media. Ideas that can make investors some serious returns.
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For Money Morning