Discount department store The Reject Shop’s full year results tell an interesting story – one of business suffering under the impact of the Covid-19 lockdown, but also one of a strong reset to an ailing business model.
Total sales in the chain fell 5.1 per cent over the course of FY21 to $778.7 million, as lockdowns around the country caused shoppers to avoid public spaces, with many of the businesses stores located in shopping centres and CBD locations: areas hit particularly hard by movement restrictions.
Comparable store sales fell 19 per cent in total, with large shopping centre and CBD stores making up the bulk of that.
The Reject Shop was also hit with $9 million in unbudgeted costs to international shipping, with costs of shipping goods from overseas increasing “each month” according to the business.
Despite this, the Reject Shop turned a profit 643 per cent higher than the year prior, hitting $8.3 million, well above the $1.1 million seen last year. This came, largely, from a massive cut to the cost of doing business – saving $22.5 million over the year – as it transitions through the ‘fix’ phase of its restructure, and into the ‘reset’ and ‘grow’ phases in