Adairs finds comfort online during shutdown period

Adairs finds comfort online during shutdown period

Ahead of reopening a number of large-format stores this coming Thursday Adairs (ASX: ADH) has revealed online retail was the key to surviving April.

The bedding and interiors retailer closed its stores in Australia and New Zealand on March 27 in response to the threat of COVID-19 to the health and safety of its staff and customers.

Since then, sales were down 37 per cent during the five weeks of store closures compared to the same period in 2019.

The company has largely been saved from an even worse April result due to its success online.

Since stores closed online sales have "exceeded expectations" and were up 221 per cent.

"Adairs online sales for the 9 months to March 2020 represented approximately 20 per cent of the total sales of the Adairs business," says Adairs.

"The strength of our online platform and the 221 per cent growth in online we have seen since stores closed has resulted in Adairs sales for the last five weeks being down approximately 37 per cent compared to last year.

"Pleasingly, approximately 30 per cent of this online growth has come from customers who were not members of Linen Lovers or had not previously shopped online with Adairs."

The company says it has had constructive discussions with landlords which it hopes will lead to a mutually agreeable outcome with regard to rent payments.

Adairs also says its supply chain is intact and inventory is being managed to ensure it is well placed in terms of seasonality and trading through an expected softer retail environment in the recovery phase.

Unlike other ASX listed companies Adairs says it has no plans to raise capital. At 4 May the company has cash on hand of $41 million, net debt of $43 million and undrawn debt facilities of $12.5 million.

"We acknowledge however that considerable uncertainty remains, and that our operating environment can change rapidly," says Adairs.

"We remain vigilant and prepared to move quickly as circumstances change."

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