Struggling Reject Shop to close stores
The Reject Shop's chief executive has quit after the troubled retailer announced store closures and slashed its full-year guidance to predict a loss of up to $2 million.
The company said Ross Sudano would leave "in the near term" and general manager of supply chain, strategy and innovation Dani Aquilina had been appointed acting CEO while it searched for a replacement.
Shares in The Reject Shop, which as recently as February reiterated its expectation of a full-year profit of between $3.1 million and $4.1 million, were 6.2 per cent lower after 25 minutes of trade on Thursday and close to the 14-year trough they hit in November.
The Reject Shop said merchandising and operational changes it had implemented in the hope of a turnaround had fallen short, with the result it now expected a loss of $1 million to $2 million.
"The reduced earnings guidance reflects a tough trading environment in the retail sector which has continued to be impacted by low consumer confidence, flat wages, increases in the cost of living and a rapidly falling housing sector," the company said in a statement.
"Gross margins have fallen as the expected benefits from sales and merchandise related initiatives have not landed with consumers during the half."
Seven stores will close by the end of June after the company was unable to negotiate "acceptable" rents, leaving a network of 357 outlets. It did not say which stores would close.
Breville non-executive chairman Steven Fisher and Zac Midalia, who represents the Allensford group that this year tried to buy The Reject Shop, have joined the company board.
At 1025 AEST, Reject Shop shares were worth $2.13, 75 per cent down on their April 2018 valuation.