Bush clothing outfitter R.M. Williams has slipped into the red after embarking on ambitious growth plans under its new owner L Capital Asia, the private equity arm of luxury goods house LVMH.
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R.M. Williams lost $152,782 in the 12 months ending June 2015, compared with a profit of $2.2 million in 2014, according to accounts lodged with the Australian Securities and Investments Commission (ASIC) on Thursday.
Group sales slipped 2.8 per cent to $124.6 million, despite new stores and expansion into new categories including women's boots and mobile phone cases.
R.M. Williams makes about 90 per cent of its sales in Australia, even though the company, founded by Adelaide bootmaker Reginald Murray Williams in 1932, exports to 15 countries and has sold online since 2000.
L Capital acquired a 49.9 per cent stake in the company from former News Corp executive Ken Cowley in 2013 and acquired the remaining 50.1 per cent in 2014, investing an estimated $110 million.
Mr Cowley retired from the board in October 2015.
Under new owners and a new chief executive, Raju Vuppalapati, the company has been tweaking its 50-odd stores in Australia and New Zealand, closing or refurbishing older stores and opening new stores in markets such as the Gold Coast.
It has also opened stores overseas, including a second store in London in June and its first store in New York earlier this month.
Another five stores are due to open in the US, including Los Angeles, San Francisco and Dallas, over the next year.
Mr Vuppalapati, the former managing director of Levi Strauss and Co in Australia, South Africa and the Middle East, is also targeting younger, metropolitan Australians while attempting to stay relevant to R.M. Williams' traditional customer base.
Singapore-based L Capital Asia also owns sportswear clothing company 2XU, swimsuit business Seafolly, and upmarket grocer Jones the Grocer, which collapsed earlier this year.
Mr Vuppalapati was not immediately available to comment on the results.
His ambition is to double production over the next five years, from 200,000 boots a year to 400,000 and sell them through an expanded international store footprint.
However, Mr Vuppalapati has been adamant that R.M. Williams boots would continue to be made in Adelaide for the foreseeable future and that the brand's Australian ethos would not be diluted.
"This company is unique in that R.M. invented a pair of boots in 1932 that are still timeless," he told AFR Magazine earlier this year.
"So timeless that professionals can wear them, the cool crowd wants to wear them, the young kids are into them - as are presidents and prime ministers.
“How many brands can claim that?"
- This story first appeared in the Australian Financial Review
