Iconic Australian shoe retailer Diana Ferrari has announced it will close all its branded stores and operate mainly as an online retailer in 2018.
In a statement to customers Diana Ferrari confirmed that it will close all of its Diana Ferrari branded stores over the coming months, and will maintain a stronger online presence when it comes to direct-to-consumer sales.
Parent company, Munro Footwear Group (MFG), told Power Retail that 17 Diana Ferrari concept stores will be affected by the decision. “Fourteen stores are closing and four stores will be rebranded”. The clearance stores, some of which are branded to Diana Ferrari, are staying open and operating as normal. Diana Ferrari footwear will continue to be sold through Mathers, Williams, wholesale stockists, clearance stores and major department stores.
“All Diana Ferrari stores will be closed over the coming months, but our fabulous footwear will continue to be available through our online stores, Mathers, Williams, wholesale stockists and major department stores,” the comfort footwear retailer said in a statement to customers.
“We truly appreciate and thank all our loyal clothing customers over the last 17 years.”
Founded in 1979, Diana Ferrari started off as a small leather shoemaking factory to being an iconic Australian brand. In June last year, the footwear brand was acquired by Munro Footwear Group with the purchase of Fusion Retail Brands, which saw Diana Ferrari, Williams, Colorado and Mathers join its collection of fashion brands.
Munro Footwear Group’s CEO Jay Munro confirms the reason for the decision was to maximise the group’s potential and return.
“Following a strategic review of its retail brand portfolio, Munro Footwear Group has decided to exit its Diana Ferrari apparel business in order to focus on its core business and objective of being Australia’s best footwear company,” Munro told Power Retail. “Our strength and heritage is in managing footwear brands and it is important to position the company to maximize its potential and return.”
“This was a difficult decision because Diana Ferrari Retail and its apparel division have been solid performers with a loyal customer base and staff dedicated to a high level of customer service. However, focusing purely on footwear across all MFG brands is the right strategic decision for the company in the current retail landscape.”
Munro has confirmed that all Diana Ferrari retail staff will be offered continued employment within MFG’s existing 280 plus store network. “The Diana Ferrari footwear brand will remain critical to the future success of Munro Footwear Group. It is anticipated that this change will help the business reach its full potential,” a spokesperson from MFG told Power Retail.
Three days ago plus-size fashion retailer Maggie T announced that it will enter into administration this week due to difficulty in paying debts leading up to the Christmas period.
National insolvency specialist, Andrew Spring, and partner at Jirsch Sutherland says the recent news of Diana Ferrari’s major decision and the collapse of Maggie T, as well as the string of retail closures in 2017 is fuelled by the growth of online retail and the failure of companies to progress their e-commerce capabilities.
“This news shows that well-known brands are surrendering to the mounting pressure faced by traditional bricks and mortar operations. As the online retail marketplace expands and traditional geographical barriers to entry are removed, Aussie retailers are dealing with more competition than ever before,” he explains.
“And those retailers that have failed to evolve by investing in their e-commerce platforms, will continue to feel the pain this year as they find the costs of a having a bricks and mortar store too high.”
The lack of being agile is another important factor, according to Spring, who says that it is particularly difficult on retailers when they are committed to leases and staff, and they’re locked in. “Other key contributors include obsolete stock issues, and poor record keeping. We predict that we haven’t seen the worst of retail woes and that 2018 will unfortunately see many more homegrown brands go into insolvency.”