Smiggle, known for its brightly coloured stationery that was once a must-have for children's back-to-school shopping, is now facing significant sales declines, fierce competition from online retailers and weak leadership. Previously a strong performer within the Premier Investments portfolio, the brand is at a crossroads and struggling to reclaim momentum in a drastically altered retail environment.
The brand gained early success by turning school supplies into novelty fashion, attracting a large young customer base across Australia, New Zealand and other markets. Its popularity spurred an international rollout, growing its global presence to over 350 stores by 2019. However, post-COVID changes in consumer spending, along with the rise of digital entertainment and viral TikTok trends, have caused shoppers to drift away from novelty retailers like Smiggle.
After reaching a peak in 2023 with global sales of $319.8 million, revenue declined by 10.7% in FY25 to $264 million, following a 7.4% drop the previous year. Average sales per store in Australia and New Zealand fell by 5.6%, while total store numbers shrank from 352 to 296 locations. Online marketplaces including Amazon and Temu, along with value-based local retailers, have further undermined Smiggle's market share by offering more affordable alternatives without the overheads of physical stores.
Adding to the business challenges is ongoing leadership instability. Smiggle has been without a CEO for over a year since the sudden dismissal of the previous chief executive amid allegations of serious misconduct. Several senior staff members have since left for rival jewellery retailer Lovisa. Premier Investments has lost close to 10% of Smiggle’s head office workforce, creating a talent shortfall just as the company attempts to stabilise operations and refine its global strategy.
The leadership disruption has also delayed Premier's plans to list Smiggle as a separate company on the ASX. A company-wide cultural review remains underway, creating another complication at a time when urgent action is needed to reverse performance declines and re-establish strategic direction. Premier’s leadership has indicated that its priority is now to appoint a new CEO with global retail experience in an effort to boost growth in markets like the Middle East and Indonesia by pursuing wholesale arrangements.
Smiggle's future remains uncertain. Its downturn highlights not only internal failings but also broader changes in how and where consumers connect with brands. For Premier, revitalising Smiggle’s appeal and securing strong leadership will be crucial to avoid further decline.
