Australian kids’ stationery brand Smiggle has put its hand up as the latest victim of Brexit uncertainty, admitting the situation has forced it to re-assess its global growth plans. These will see the stationery brand expand further into Asia, open up a new market in Canada, and work with Amazon Europe to launch in France, Italy, Germany and Spain.
Mark McInnes, chief of Premier Investments, which owns Smiggle, has blamed ‘disastrous’ retail trading conditions ahead of Brexit for a sharp slowdown in Smiggle sales in the first half of 2019. He called Brexit a ‘once in a lifetime event’ that has negatively impacted the entire UK economy and sapped consumer confidence over the critical Christmas period.
Sales grew 4.7 per cent in the January half, its slowest growth for at least 10 years. Excluding new stores, Smiggle sales actually declined in the UK.
Elsewhere in the company’s portfolio, Smiggle enjoyed record global performance, with total sales for the half reaching $178.8 million, driven by strong 34.8 per cent sales growth in the Asian market.
Premier Investments plans to push Smiggle in South Korea, Thailand, Indonesia, and the Philippines, as well as the UAE, making the brand available in over 100 new locations by July 2019. Smiggle will also target Canada in late 2019, giving the brand its first exposure to a key North American market.
In a move that also appears to be directly affected by Brexit, Smiggle said that due to “major structural changes to the global retail industry,” the brand will partner with Amazon Europe to launch in France, Italy, Germany and Spain between April and July 2019.
Smiggle has also reported that it is in talks with Alibaba to take the brand to countries where it does not currently operate.
As a direct result of Brexit, Premier Investments said Smiggle expects its aspirational target of $450 million in annual global retail sales will be delivered in calendar year 2021 or 2022.