The fashion group is navigating a difficult period as shrinking consumer demand, store closures and internal restructuring have pushed it into negative territory. Although there was a slight increase in early-year sales, the business posted a significant loss, highlighting ongoing challenges and concerns about brand sustainability.
Based in Melbourne, Country Road Group owns major fashion brands such as Witchery, Mimco and Trenery. After years of consistent earnings, its parent company reported a pre-tax and interest loss of $18.1 million for the financial year ending 29 June. This resulted in an overall net loss of roughly $124 million. In contrast, the company had delivered a $51.6 million operating profit the year before. The downturn followed a 5.4% revenue decline, with total turnover dropping to $1.056 billion.
The losses echo growing strain in Australia’s discretionary retail sector. Higher interest rates and falling consumer spending have hurt fashion retailers, with severe discounting further eroding profit margins. Country Road Group's gross margin dropped 390 basis points to 56.4%, largely due to aggressive promotions aimed at attracting customers. The business also absorbed $80 million in asset impairments and was affected by currency pressures tied to overseas operations.
Woolworths Holdings, the South African owner of the group since 2014, said part of the loss can be linked to increased independent costs after separating from department store David Jones. Many overheads previously shared are now fully borne by the smaller Country Road business. Internal challenges have added further strain. Executive departures in 2024, linked to workplace controversies, harmed staff morale and left over 50 roles vacant at the head office earlier this year. The business is also in the process of consolidating its retail footprint, with several major store closures planned by 2028.
Despite these setbacks, Country Road Group is cautiously moving forward with structural reforms. A 1.2% rise in early fiscal year sales suggests slow recovery may be underway. However, persistent pressure on household spending means fashion retailers like Country Road Group will continue facing a difficult operating environment.
