We have all but entered the silly season as people gear up for Black Friday, Cyber Monday, Christmas, Boxing Day and New Year’s Eve sales. They’ve got the seasonal bonuses and holidays to make the most of it. What’s more, these sales manage to perk up economies, with last year’s Black Friday sale generating record turnover for Australia’s retail industry.
But this year with tighter household budgets catalysed by increased cost of living, high-interest rates and inflationary pressures, this year’s silly season is going to largely be driven by online shopping where greater discounts and savings can be found, maximising the exposure of a few ASX-listed online-only retailers.
Harris Technology (ASX: HT8)
In FY23, pure-play online retailer Harris Technology (ASX: HT8) reported a revenue of $24.2 million. This was a decline on their previous year’s $52m but part of an orchestrated plan to remove low-margin tech products from their eCommerce channels. The Company expanded its product offerings by entering the Household products category, focusing on items commonly found in Australian homes with a minimum gross product margin of 40% which are typically very popular around the Christmas season.
Conscious of the macroeconomic impact of tighter household spending, Harris Technology adopted a conservative approach to conserve cash, clear ageing inventory, and shift its product strategy to emphasise higher-margin items (smart home goods!). These adjustments resulted in a decline in year-on-year revenue but positioned the Company for a rebound. Despite the difficulties, Harris Technology ended the year with $1.7 million in cash on hand, indicating financial stability for future projects.
One of these projects is their Manufacturer-to-Consumer (M2C) division which sells white-label tech products directly from manufacturing facilities directly to customers in the United States, Canada, United Kingdom, Singapore and Australia.
Harris Technology welcomes investors to join their mailing list here.
Booktopia (ASX: BKG)
Online book retailer Booktopia (ASX: BKG) reported a robust financial performance in FY23, with revenue totalling $197.6 million, marking a 17.9% decline on FY22. Booktopia also endured a $29 million net loss after tax, almost double the previous year’s $15m net loss.
In February 2023, the Company announced the opening of a new, highly automated Customer Fulfilment Centre (CFC). This launch is specifically geared towards the critical end-of-year sales events, including Black Friday and Christmas. The CFC is now operational and represents a substantial $12 million investment that is expected to contribute to annual revenue growth.
Moreover, Booktopia recently completed an equity raise, securing $10.9 million in additional capital. This infusion of funds has bolstered its working capital, allowing it to increase available inventory for the crucial Christmas period and facilitating a smooth transition to the new CFC.
Step One Clothing (ASX: STP)
In FY23, online underwear company Step One (ASX: STP) responded to customer demand by introducing vibrant core colours for both men and women, resulting in positive feedback. Step One also broadened its women’s product line in FY23 by introducing the women’s Bikini Brief in March 2023 with sound results.
Financially, FY23 saw Step One achieve $65.2 million in revenue, though it represented a 9.7% decrease compared to the previous year’s $72.2 million. Even so, its average order value increased by 19.3% to $89, and it added 257,000 new customers, reaching a total of over 1,358,000 global customers in FY23.
In keeping with its financials, the Company announced a dividend payout of 5 cents per share, returning most of the profits earned since the IPO to shareholders. In FY24, Step One plans to focus on profitable growth in Australia and the UK and expand its sales channels.
From innerwear to books, smart household items and more—people’s wishlists this year might represent a mix of functional items and little luxuries. And these companies are poised to become go-to picks.
Alinda is a Business Reporter for The Sentiment
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