Sports retailer SurfStitch to streamline operations
Australian sports e-retailer SurfStitch has announced plans to reorganise its business in order to reduce costs and streamline operations.
As part of the strategy, the company will transfer its core business of SurfStich.com to a new platform in the second half of this fiscal year.
Besides closing its North American infrastructure by next January, the company plans to shift the management of its SWELL e-commerce platform from the US to Australia.
SurfStitch Group CEO Mike Sonand said: "The work to transform our business model; through improved operational capabilities, enriched customer engagement and a reduced cost base, is going well.
"However, the retail environment has made it difficult to deliver the planned sales and gross margin improvements as quickly as we would like, resulting in the revised forecast for the group’s underlying EBITDA."
In an earlier forecast, the company reported the potential EBITDA loss for this fiscal to be from $5m to $6.5m. However, it has revised the estimated loss to be between $10.5m and $11.5m.
SurfStitch has attributed the revision in the loss estimation to the challenging general business environment for apparel and footwear in its key markets.
According to the company, its UK business Surfdome has been subject to intense margin and sales pressure.
SurfStitch Group chairman Sam Weiss said: “Not withstanding the difficult business environment and the operational and external challenges facing SurfStitch, the board, the management and the global SurfStitch team are highly engaged and enthusiastic about the opportunity to deliver on the significant potential of our business.”
The company aims to increase its focus on its two largest markets, namely Australia and the US.