We will be the best, most respected and most desired modern Australian lifestyle brand.

Country Road’s challenge in this financial year was to grow sales and improve the profitability of its core business in a tough and competitive environment in Australia, which saw significant discounting by the two major department stores.

a challenging year

Although sales were at the same level as the previous year, reflecting the discount-led market, the business achieved a net profit after tax for the year of A$2.1m excluding the US discontinued operations.  Margins improved by 2.8%, stock levels were some 9.5% down on the previous year and cash on hand of A$10.3m was an improvement over A$5m available at the end of the previous financial year.

Ian Moir Chief executive officer: Country Road

Country Road occupies a potentially highly profitable niche position in the Australian market place, providing a full lifestyle offer across menswear, womenswear, childrenswear and homeware, targeted at style conscious, trend-aware men and women who appreciate quality and value.

The key initiatives undertaken in the year were;-

• a value programme to reduce prices of volume items whilst maintaining and improving quality;

• improving the fashionability of the mens and womens ranges;

• the replacement of core merchandise systems and processes to allow better store profiling, improved allocation, efficient replenishment and increased availability of stock; and

• a new marketing campaign reflecting the brand values and improved product offer.

The signing of a strategic alliance with Myer Grace Bros, Australia’s largest department store, underpins Country Road’s commitment to adopting a simpler and more efficient retail business model rather than a wholesale model.  This retail focus will mean shorter lead times, improved control of the brand and a less complex retail-focused business. looking forward The prospects for the business are positive.  Having exited the US market and concluded a strategic alliance with Myer Grace Bros, Country Road can now focus on its core market and core customer.  A strong design brief and the appointment of a new design head combined with shorter lead-times will ensure that on-trend merchandise becomes a regular feature in Country Road stores.  An upgrade of the top 15 stores leading to more exciting store environments, supported by an impactful and effective marketing campaign will help to change customers’ perceptions of Country Road.