Woolworths Holdings Limited · JSE:WHL
Woolworths — Country Road Group — Non-Deal Roadshow (May 2014)
44 slides from Woolworths's roadshow presentation, May 2014
Slide 1: Country Road Group
COUNTRY ROAD GROUP COUNTRYROAD MIMCO TRENERY WITCHERY
Slide 2: Basis of Disclosure
BASIS OF DISCLOSURE The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about and observe such restricti
Slide 3: Country Road Group, Melbourne, May 2014
COUNTRY ROAD GROUP Melbourne, May 2014
Slide 4: Agenda
AGENDA - Background - Competitive landscape - Our vision - Our roadmap - Successful acquisition and integration - Case study: Witchery repositioning - Close: Performance post acquisition 4
Slide 5: 01 Background
COUNTRY ROAD GROUP
Slide 6: Our Four Brands
WiTCHERY OUR FOUR BRANDS COUNTRY ROAD GROUP °
Slide 7: Country Road at a Glance
Country Road has grown to become Australia’s most iconic lifestyle brand + 1974: Began as a niche women’s shirting business COUNTRY ROAD + 1984: Launched Menswear AT A GLANCE + 1986: Launched women’s & men’s accessories + 1989: Launched Homewares + 1990: Expanded retail + 1992: Commenced retail oper
Slide 8: Trenery at a Glance
TRENERY AT A GLANCE Trenery is a brand that was created by the team behind Country Road. It is designed for women and men who appreciate the beauty of simple, sophisticated collections that are modern in approach and classic in style + 2009: Launched in Australia with five standalone stores and 16 s
Slide 9: Witchery at a Glance
WITCHERY AT A GLANCE Witchery is a leading Australian brand with a focus on fashionably designed high quality womenswear, menswear, accessories and childrenswear + 1970: Launched in Australia as a womenswear brand + 2006: Gresham acquired Witchery + 2007: Witchery acquired Mimco and launched in New
Slide 10: Mimco at a Glance
Mimco is one of Australia’s leading designer brands with MIMCO a focus on unique accessory & footwear collections AT A GLANCE + 1996: Launched in Australia as an accessories designer, began with wholesaling range throughout Australia + 2000: Expanded wholesale sales into the UK, Asia and New Zealand
Slide 11: 02 Competitive Landscape
02 | COMPETITIVE LANDSCAPE 11
Slide 12: International Competitors
INTERNATIONAL – 01 BACKGROUND COMPETITORS FAST FASHION LOW PRICE 12
Slide 13: Online Growth Continues Locally and Overseas
ONLINE GROWTH CONTINUES LOCALLY AND OVERSEAS CRG DOMINATING 13
Slide 14: Local Fashion Victims We Can Dominate
LOCAL FASHION VICTIMS WE CAN DOMINATE WITH SOUTHERN HEMISPHERE SCALE 14
Slide 15: High Australian Dollar Moving from Risk to Opportunity
HIGH AUSTRALIAN DOLLAR MOVING FROM RISK TO OPPORTUNITY 15
Slide 16: Seismic Shifts Have Left Winners and Losers
SEISMIC SHIFTS HAVE LEFT WINNERS AND TOTAL SALES GROWTH AND TOTAL MARKET SHARE (YE MARCH-2014 vs YE MARCH-2013) LOSERS The market has been experiencing an unprecedented disruption with mixed outcomes: there are winners and losers. Winners: online pure plays, new overseas entrants and sports apparel.
Slide 17: 03 Our Vision
if - ane _—" 03 | OUR VISION COUNTRY ROAD GROUP
Slide 18: Our Vision
OUR VISION – At CRG, our vision is to grow our portfolio of COMPLEMENTARY BRANDS and become the OMNI CHANNEL MARKET LEADER in the SOUTHERN HEMISPHERE, with TALENTED EMPLOYEES, INNOVATIVE PROCESSES AND WORLD CLASS SYSTEMS. 18
Slide 19: CRG Customer Centric Model
CRG CUSTOMER CENTRIC MODEL BIG ANALYTICS 19
Slide 20: 04 Our Roadmap
SS | al = 04|OURROADMAP 17 | | COUNTRY ROAD GROUP
Slide 21: Our Roadmap
OUR ROADMAP – Our roadmap is multi-faceted in its components, but built around one single operational platform and one single view of the customer’s purchasing behaviour and lifestyle. – It is driven by two principles: our brands will continue to grow and meet more of the needs of our customers and
Slide 22: Pre Acquisition Positioning Map
PRE ACQUISITION POSITIONING MAP 22
Slide 23: Our Framework to Beat the Market Trend
OUR FRAMEWORK TO BEAT THE MARKET TREND Over the last year we have adopted a brand positioning framework, through which our four brands have focused on the medium-upper value segment of the market. The framework, originally raised as a working hypothesis soon after the acquisition of the Witchery Gro
Slide 24: A Group Approach to Customer Engagement
A GROUP APPROACH TO CUSTOMER ENGAGEMENT – Customer ‘Share of Wallet’ analysis was undertaken to quantify how much customers currently spend within and outside the group to identify the size of the opportunity. – Concepts for a group loyalty proposition have been developed with key stakeholders and w
Slide 25: A Group Approach to Customer Engagement
A GROUP APPROACH TO CUSTOMER ENGAGEMENT The rationale: – 70% of the 1.3 million active NUMBER OF ACTIVE CARDHOLDERS IN GROUP BRAND LOYALTY Cardholders only belong to PROGRAMS (FY14 ESTIMATED) one of the brand loyalty programs. – There is opportunity to incentivise these Cardholders to cross-shop and
Slide 26: Omni-Channel: Digital's Rapid Expansion
OMNI-CHANNEL: DIGITAL’S RAPID EXPANSION Our digital business continues to grow and grow fast. Online sales Launched in 2010 it now accounts for 8% of total sales. Introducing the CRG online system has created huge upside for the Witchery and Mimco digital businesses. We have introduced a new level o
Slide 27: Omni-Channel: Australasian Bricks Opportunities
OMNI-CHANNEL: AUSTRALASIAN BRICKS OPPORTUNITIES Well developed channel strategy 1. Grow flagships 5. Resorts 2. Standalone concept – centres 6. Regionals 3. Standalone concept - strips 7. Concession 4. Airports FY 14/15 FY 15/16 FY 16/17 Total Key deliverables CR M TR W Total CR M TR W Total CR M TR
Slide 28: Omni-Channel: RSA Bricks Opportunities
OMNI-CHANNEL: RSA BRICKS OPPORTUNITIES – The Country Road and Trenery brands had a record year in South Africa in FY13. – Sales in local currency terms for the South African business grew by 32.2% on the prior year and comparable growth was 17.7%. – Successful March 2014 re-launch and launch of Witc
Slide 29: 05 Acquiring and Building a More Efficient Business
05 | ACQUIRING AND BUILDING A MORE EFFICIENT BUSINESS 29
Slide 30: Growing Our Margin
GROWING OUR MARGIN 1 GROW MARGIN We will reduce our supplier base to gain economies of scale CONSOLIDATE SUPPLIERS We will move our sourcing model to become more true direct & IMPROVE MARGIN We will negotiate with suppliers to gain greater group benefits GROUP SOURCING Identify opportunities for gro
Slide 31: A More Efficient Business
A MORE EFFICIENT BUSINESS – We conducted an end to end review of our supply chain and are now looking to develop a solution which will underpin our Group’s long term success. – The solution will provide a more optimal service to all brands and will: Be FASTER – product to customer or store Be BETTER
Slide 32: Acquisition and Integration of Witchery and Mimco: Vision
ACQUISITION AND INTEGRATION OF WITCHERY AND MIMCO: VISION Phase 1 – Finalised due diligence & funding: completed transaction • Completed due diligence; agreed transaction documentation THERE WERE FOUR • Successful equity raising from existing shareholders PHASES TO REALISING • Transferred ownership
Slide 33: What We Have Achieved
WHAT WE HAVE ACHIEVED BRANDS SYSTEMS & PROCESSES PEOPLE BUSINESS INITIATIVES OUTCOME Clearly defined brands are Enhanced scale and Enhanced talent pool and Initiatives for unlocking core to our business model “best of breed” systems opportunities for staff profit growth: best practice, and customer
Slide 34: Project Twenty15 Integration Roadmap
PROJECT TWENTY15 INTEGRATION ROADMAP Our vision is to grow our portfolio of complementary brands and become the omni channel market leader in the southern hemisphere, with talented employees, innovative Loyalty Assessment Group processes and world class Complete Loyalty systems. Concept Complete Dev
Slide 35: 06 Case Study: Witchery Repositioning
06 | CASE STUDY: WITCHERY REPOSITIONING 35
Slide 36: Witchery Pre Acquisition Positioning Map
WITCHERY PRE ACQUISITION POSITIONING MAP 36
Slide 37: Witchery Post Acquisition Positioning Map
WITCHERY POST ACQUISITION POSITIONING MAP WITCHERY 37
Slide 38: Witchery Brand Repositioning
WITCHERY BRAND REPOSITIONING • Style Authority brand repositioning is reinforced in everything we do. • International high profile models are used to embed Style Authority repositioning and a seasonal runway of international standard has been established. • All content from the photo shoot and runwa
Slide 39: Witchery Product Repositioning
WITCHERY PRODUCT REPOSITIONING Established a strong Product Value Proposition • Our customer wanted more fashionable product at great value. The range is now more directional, fashion forward, coordinated with an unwavering commitment to quality through use of fabrications at accessible prices. • Th
Slide 40: Witchery Channel Repositioning
WITCHERY CHANNEL REPOSITIONING • We have created a format strategy and have commenced the right-sizing and relocation of existing stores whilst reducing the tail. • Optimised the use of space in stores through aligning to demographic. • On-line is a key channel and focus of growth. Our loyal custome
Slide 41: FY14 Achievements
FY14 ACHIEVEMENTS • Significant market share growth over the past 12 months with an increase in share of wallet from the ‘affluent young’ and ‘wealthy young’ segments. • YTD Mar-14 vs. YTD Mar-13: o Sales growth: o Gross margin: o Market share: 41
Slide 42: 07 Performance Post Acquisition
07 | PERFORMANCE POST ACQUISITION 42
Slide 43: How We Have Performed
HOW WE HAVE PERFORMED Acquisition of Witchery and Mimco effective October 2012 43
Slide 44: Country Road Group
COUNTRY ROAD GROUP COUNTRYROAD MIMCO TRENERY WITCHERY