PacBrands puts smalls in big picture

By , 10/11/2018 22:15

Pacific Brands chief executive John Pollaers has unveiled a five-year blueprint to internationalise the company’s underwear division that would clothe shoppers from England to China in such loved Aussie brands as Bonds and Berlei.

Mr Pollaers fleshed out his wide-ranging plan to resurrect the clothing and footwear manufacturer with investors this morning, listing a number of imperatives to transform the company including improving its distribution channels, developing a world class online offer, expanding into new offshore markets and shaking up its supply chain to rein in costs and lift productivity.

Pacific Brands’ underwear operations account for a third of the company’s total sales and last financial year were responsible for a majority of the company’s $404.9 million in pre-tax losses after it lost a contract with retailer Kmart and was forced to write down goodwill.

The former chief executive of brewer Foster’s told analysts at the underwear briefing that Pacific Brands had to develop a focused portfolio of key brands that delivered consistent growth to shareholders. The company would in future limit its exposure to large single retailers by developing routes to market that allowed it to engage directly with shoppers.

Pacific Brands also needed to balance a strong wholesale base with complementary direct channels to market, such as online and other retail channels, while delivering innovation in its core business categories, he said.

The current Australia-centric business model, with 95 per cent of sales in the domestic market, would be scrapped in favour of an internationally focused business with the Bonds underwear brand, bedsheets business Sheridan and workwear division (KingGee, Hard Yakka) ripe for offshore expansion.

Mr Pollaers was appointed the boss of Pacific Brands in August 2012 when the manufacturer which owns Bonds, Berlei, Tontine, Holeproof, Clarks and Sheridan unveiled its third loss in four years following more than $500 million in write-offs and restructuring charges.

He took the reins promising a major restructure of the group after a downturn in its key markets and rising costs led Pacific Brands to post a larger-than-forecast full-year loss that almost tripled to $450.7 million for 2011-12.

Mr Pollaers’ strategy briefing on underwear yesterday is part of the turnaround. Last financial year the underwear division reported a 15.8 per cent drop in reported sales to $432.5 million and a full-year pre-tax loss of $330.3 million.

In a wide-ranging briefing covering his plans to lift underwear, Mr Pollaers said Pacific Brands had learnt from previous mistakes including a problematic launch out of wholesale and into retail.

The company had made good progress on its Bonds stores, would soon launch an expanded children’s range and would actively promote its online stores, he said.

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