Country Road Group has announced its third consecutive annual net loss, recording $21.7 million for the 2025-2026 financial year. While this figure represents a substantial reduction from the previous year's $124 million loss, the brand continues to grapple with declining sales and store closures.
The group, which also owns brands such as Witchery, Mimco, Trenery, and Politix, saw overall group sales increase by 1% for the year, with a 1.6% rise on a comparable-store basis. However, this growth momentum faltered in the latter half of the year, with sales experiencing a 0.5% decline.
Fashion expert Annalise Wood attributes Country Road's struggles to its position in a challenging market segment. She notes that cost-conscious consumers are increasingly choosing between ultra-low-priced fast fashion retailers like Shein or investing in premium, long-lasting pieces. This leaves brands in the middle market, like Country Road, in a difficult position, especially as Wood describes the brand's prices as "astronomical" for its quality.
"One of the many reasons that they are losing sales and falling off is due to fast fashion brands like Shein," Wood stated. She highlighted that Country Road's core demographic, which includes older shoppers, is increasingly opting for fast-fashion alternatives. The current economic climate, characterized by a cost-of-living crisis and high interest rates, has shifted consumer spending towards either extreme price points.
Historically, Country Road was a significant player in Australian fashion, founded in 1974 by Stephen Bennett with a focus on quality clothing suited to the Australian lifestyle. By the 1990s, it was known for its Australian-made apparel and accessories, with classic cotton shirts becoming wardrobe staples. The brand even expanded into the U.S. market.
However, changes in ownership, with South Africa's Woolworths Holdings taking a controlling stake in the late 1990s and subsequent offshoring of manufacturing, marked a turning point. Wood suggested that the brand is failing to capitalize on current fashion trends, which favor understated business-casual wear, due to its pricing and weak online presence.
Despite the challenges facing the Country Road brand, the Australian division achieved profitability for the first time since 2023, reporting earnings before interest and tax of $2.3 million, a 113% improvement from the prior 12 months. Other brands within the group, Witchery and Politix, saw success with repositioning strategies, delivering comparable sales growth of 9.5% and 10.2% respectively.
Marketing Focus managing director Barry Urquhart, who previously advised Country Road's founder, believes the brand can be revitalized. He suggests re-engaging with its original target market, now aged 50s and 60s, while also appealing to younger generations. Urquhart emphasized the need for the brand to re-articulate its values and create a unique point of difference, drawing parallels with brands like RM Williams that have successfully innovated their ranges.
Country Road Group CEO Steven Cook stated that the company has focused on improving sales quality, strengthening inventory, and operating more efficiently. He added that the group has made significant progress in building stronger foundations and ensuring each brand has a clear positioning and compelling product offering for sustainable growth. The Country Road brand is reportedly trading marginally ahead of the previous year, entering the 2027 financial year with new leadership.