Best & Less boss calls for JobKeeper return as shares shine on debut
The boss of freshly listed discount retailer Best & Less says the federal government should reinstate JobKeeper if Sydney’s lockdown stretches on for another month, stressing the stimulus was needed to give businesses certainty.
Rodney Orrock, the retailer’s chief executive since 2016, told The Age and The Sydney Morning Herald a fresh round of subsidies should be considered given the federal government had received a strong “return on investment” from its initial $90 billion outlay.
Best & Less chairman Jason Murray and chief executive Rod Orrock.Credit:
“When JobKeeper was put in place 18 months ago, it enabled businesses to make decisions with certainty,” he said. “If the Sydney lockdown continues to go beyond August, then I believe you do need to provide businesses with the certainty as to how they’re going to continue to survive.“
“The market, with the stimulus that was put into it, benefited greatly and we’ve had a very strong economy off the back of it. And if you think about the profits businesses have banked in the last financial year, the government has received a significant return on the investment they provided through JobKeeper as a consequence of that.”
The executive’s calls echo those made by the Australian Retailers Association, the National Retail Association (NRA) and retail union SDA, who wrote to Prime Minister Scott Morrison on Monday calling for a return to job subsidies.
“Retail is one of Australia’s most important sectors and significant job losses are inevitable if further assistance is not granted to businesses in lockdown locations,” NRA chief Dominique Lamb said.
Best & Less has lost 10 per cent of its potential trading days through July due to the lockdowns across various states, Mr Orrock said, with the executive “disappointed” his stores had to be closed despite demonstrating they could trade safely through the pandemic.
Mr Orrock’s comments come as the ASX debutante made a solid start to life as a listed business, with shares gaining 7.4 per cent to $2.32 after beginning trading at 11am on Monday morning.
Best & Less’ listing has been long-awaited, with the retailer eyeing the ASX for some time after its plans to list earlier this year were delayed and disrupted due to the pandemic.
It raised $60 million through its IPO along with a $40 million injection from retailing veteran Brett Blundy, who now owns 16.4 per cent of the business. A further 40.4 per cent is owned by private equity firm Allegro, which purchased the business off South African retailer Greenlit in 2019.
“Allegro is extremely proud to see Best & Less Group list on the ASX today and welcomes new shareholders for this exciting next stage of its growth journey,” Fay Bou, Allegro managing director said.
The company has been around since the 1960s, when it sold clothes and household items “without the fancy overheads”, but has differentiated itself in recent years by focusing on cheap and sustainable baby and kidswear.
Mr Orrock now wants the business to focus on improving its offerings for adults, saying with its strength in kidswear now well-established Best & Less needed to round out its range.
“We’ve been okay at doing adults – I’d say we’ve got a good underwear business – but when it comes to providing the mother in our shops … with an offer, we haven’t been very good at that in the past,” he said.
Best & Less also still has “work to do” to shake the ‘cheap and nasty’ image that was once associated with the brand, Mr Orrock said, though he was confident the brand was moving in the right direction.
The listing values the business at around $280 million. In a statement to the market, the company said it had beaten its prospectus forecasts for the 2021 financial year by 0.8 per cent, with revenue coming in at $663.2 million, and that it also expects to beat its prospectus forecasts for earnings, set to come in 15 per cent higher than the forecast of $60.7 million.
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