O Accent Group Ltd (ASX: AX1) The stock price soared this morning after the shoe retailer released a revealing update.
At the time of writing, the company’s stock rose 22% to $ 1.10.
What did Accent announce?
Like many retailers, Accent closed its doors last month in an effort to prevent the spread of the coronavirus.
Since then, the company has seen a significant acceleration in digital sales. So much so that Accent has been forced to gradually open stores in recent weeks and operate them as “dark stores” that were not open to the public.
In fact, all Australian Accent stores are now operating as dark stores and helping with online ordering.
And it is not difficult to understand why. Before its stores closed in March, Accent recorded $ 250,000 in digital sales per day. Whereas, in the last two weeks of April, its daily digital sales were between $ 800,000 and $ 1.1 million.
Seismic and lasting change to online.
Accent Group CEO Daniel Agostinelli believes that this impressive growth in digital sales reflects his years of investment in this side of the business.
He also believes that this shift to online shopping is seismic and likely to be lasting, which could be good news for him and online retailers like Kogan.com Ltd (ASX: KGN) and Redbubble Ltd (ASX: RBL).
Mr. Agostinelli said: “After years of investment by Accent Group in our team and digital technology, I am delighted with the growth of our digital sales. It is clear that there has been a seismic and probably lasting change in consumer behavior, moving from traditional shopping centers to online shopping. With 18 sites and our main digital capability, Accent Group is capitalizing on this trend. We will continue to drive digital growth as the number one priority in our company. “
Reopening of stores.
In addition, the company revealed that it made the decision to gradually reopen all of its stores. This will occur with new safety protocols in compliance with all government guidelines and prioritizing the health and safety of its staff members and customers.
However, the company warned that it does not expect retail retail traffic to recover immediately. As a result, it is trying to negotiate reductions in its rent.
Accent is seeking to have the rent calculated based on a percentage of sales. It considers this to be the fairest method of ensuring that losses are shared proportionately between landlords and tenants in the coming months.
Mr. Agostinelli: “We believe that the significant increase in our online businesses is likely to mark a permanent change in consumer habits in Australia and New Zealand and we expect our online sales to represent a much larger share of our total sales in the future “.
“Our chain of stores, together with our growing online businesses, is a fundamental competitive advantage for the Company; however, we will not operate stores with unsustainable or uneconomical rental agreements. Thus, in the coming months, we will reevaluate the location, size and format of our store chain to ensure the proper balance between digital sales and stores ”, he commented.
NEW! 5 cheap stocks with huge upside down potential
Our experts at The Motley Fool have just released a FREE report detailing 5 stocks you can buy now to take advantage of much cheaper stock prices.
One of them is a diversified conglomerate negotiating 40% discount, all the time, always offering a fully franchisee dividend yield greater than 3% …
Another is a former stock market darling who is one of Australia’s most popular and iconic companies. Trading in a significant discount at their 52-week high, these stocks not only offer huge upside potential, but also trade an attractive fully franchised dividend yield of almost 4%.
More, this free report highlights 3 more cheap bets that can lead you to profit in 2020 and beyond.
Simply click here to get your FREE copy and find out the names of all 5 cheap stocks.
But you’ll have to hurry, because the cheap stock prices on offer today may not last long.
Returns from 04/07/2020
Motley Fool taxpayer James Mickleboro has no position in any of the mentioned shares. Motley Fool Australia owns shares and recommended Kogan.com ltd. Motley Fool Australia recommended Accent Group and REDBUBBLE FPO. We fools may not have all the same opinions, but we all believe that, considering a wide range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains only general investment advice (in AFSL 400691). Authorized by Scott Phillips.