Ann: ADH Trading Update and Stores Re-opening, page-13

There was a lot to like about the Investor Call regarding Store Re-openings.

Adairs Aust
online sales exceeded expectations
online %GP was generated on a normal promo calendar, no pumping of sales
inventory 5% lower than last year, working with key suppliers to delay and/or cancel orders
30% of customers were new and not Linen Lover members
higher average transaction values

key focus going forward is to minimise risk of excess inventory going into key Christmas New Year period (music to my CFO ears)
Payables not being deliberately stretched to preserve cash (also music...)

Everything possible is being done on rent for closure period followed by 3-6 months recovery period with rents then reverting back to what is in the lease.
Hold over stores and those in the last year of lease term (about 25% of stores) will have some sort of rental changes in the new lease, in particular, stores within shopping centres.
Opportunities for upsizing stores still being reviewed, especially now if a good rental outcome can be achieve, still very much on strategy.

Only downside was that click and collect for (online orders) at store level is being hampered by back end systems and actual stock availability especially in smaller stores.

My take on CEO comments is that they reckon they now know the sweet spot combination of online and stores. A lot of important learnings have come out of this gloomy period.

Mocka Aust
Increased sales keenly influenced by higher traffic numbers to the Mocka website.
Delighted with 155% sales growth compared to same 5 week period last year.
It would seem that the contingency acquisition payments for the business will be made. The CFO made a point of saying they were looming large in cashflow planning and debt covenant forecasting.

New Zealand
Has only been back open since 28th April so not much to report there.

Adairs Aust + NZ qualify for the various govt assistance programs.

The key question for me is when stores are back open what the overall level of sales is and how that is split between store and online. We may be entering a new retail paradigm.

It was interesting to hear the questions from Josephine Little of Morgans and Grant Saligari of Credit Suisse. Two of the best Retail Analysts in Australia.
If anyone has access to the price targets i would be interested to know.

The CEO did however caution that he expects a sales surge upon store openings but was cautious on the health of the consumer after that so let's watch this space.

I am still a happy holder of ADH.

Cheers......................Daicosisgod