Latest / What the Flux / Smiggle's profit stalls | Lamborghini ditches EV plans for one reason | Flight Centre gets creative

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Smiggle's profit stalls | Lamborghini ditches EV plans for one reason | Flight Centre gets creative · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm Brett and I'm justin and it's Monday, the twenty
• 0:09
  Speaker 2: third of March.
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  Speaker 1: Doesy wait? Last Monday we asked the ASEX to please,
• 0:13
  Speaker 1: for the love of portfolio, stopped the bleeding. This Monday,
• 0:16
  Speaker 1: I regret to inform you we were down one point
• 0:17
  Speaker 1: seven percent again last week. This is the third weekly
• 0:21
  Speaker 1: loss for the AX and the ASEX is now down
• 0:23
  Speaker 1: eight percent since the Iran war began. Oh, at this point,
• 0:26
  Speaker 1: the only thing going up is petrol prices and investor anxiety.
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  Speaker 2: True Flux, am, we are getting to the end of March.
• 0:32
  Speaker 2: Scary how quickly this year is going. And if you
• 0:34
  Speaker 2: haven't checked your credit score in twenty twenty six yet,
• 0:37
  Speaker 2: now is absolutely the time. In the Flux out the
• 0:39
  Speaker 2: credit score tracker shows if your score has gone up,
• 0:41
  Speaker 2: it's gone down and if you've been making your repayments
• 0:43
  Speaker 2: on time. So if you want to see what the
• 0:44
  Speaker 2: banks see about you, and make sure to download the
• 0:46
  Speaker 2: Flux app and check out our credit score.
• 0:48
  Speaker 1: Talk three magnificent stories today, doesy boy? Let's do it
• 0:51
  Speaker 1: for our first premier investments. The owner of Smingle and
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  Speaker 1: Peter Alexander, has announced flat profit for the last half,
• 0:57
  Speaker 1: with one of its brands carrying the weight of the
• 0:59
  Speaker 1: world on its shoulders.
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  Speaker 2: The colorful pens just aren't flying off the shelves like
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  Speaker 2: they used to be. Man, So what's going on here?
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  Speaker 1: So? Premier Investments is the retail empire behind brands like
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  Speaker 1: Smiggle and Peter Alexander.
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  Speaker 2: It's also the company that sold apparel brands to Maya
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  Speaker 2: for around nine hundred mil last year and owns a
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  Speaker 2: Chunky Steak in Maya and Brevel and b Man. Premier
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  Speaker 2: Investments just announced a net profit of nearly one hundred
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  Speaker 2: and two million dollars for the half, which was zp
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  Speaker 2: point four percent on the previous half.
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  Speaker 1: But as boy, that's doing a bit of accounting yoga,
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  Speaker 1: isn't it. It is once you strip out the impact
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  Speaker 1: of selling down at Steak in Maya, propits actually fell
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  Speaker 1: thirteen percent. And this is where the story splits in two.
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  Speaker 2: On the one side, you've got kids stationary brand Smiggle,
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  Speaker 2: which has been on a bit of a dry spell.
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  Speaker 1: Smiggle sales dropped nearly eleven percent to about one hundred
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  Speaker 1: and forty million bucks, mainly because competition's ramped up. Hello
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  Speaker 1: Kmart and families have tightened their spending as well. And
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  Speaker 1: on the other side, you've got Peter Alexander, which is
• 1:50
  Speaker 1: living its best life.
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  Speaker 2: Yep, it sells up nearly five percent to over three
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  Speaker 2: hundred and twelve million.
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  Speaker 1: Bakarunis we will not give up a cozy matching PJ set.
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  Speaker 2: So what is the key leading here?
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  Speaker 1: Just because brands sit under the same roof, it doesn't
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  Speaker 1: mean they thrive in the same economy. Right now, Smiggle
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  Speaker 1: is struggling well, Peter Alexander is quietly performing. If you
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  Speaker 1: look at them on face value, they're both consumer retail
• 2:12
  Speaker 1: and they're both discretionary spending.
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  Speaker 2: So be man at what is the difference.
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  Speaker 1: Well, for Smiggle, its core customer is young families, and.
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  Speaker 2: These are the same group who are facing significant financial
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  Speaker 2: pressure right now. In fact, nearly fifty two percent of
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  Speaker 2: families say they found it hard to afford all the
• 2:25
  Speaker 2: items that children need for school according to the Smith Family,
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  Speaker 2: So buying a glittery notebook for twenty nine ninety five
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  Speaker 2: kind of feels like an unnecessary cast.
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  Speaker 1: But Peter Alexander has a broader customer base but has
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  Speaker 1: positioned itself for gifting.
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  Speaker 2: Think Mother's Day, Father's Day, Birthdays, Valentine's Day.
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  Speaker 1: You know, it's a small treat that still feels reasonable
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  Speaker 1: even when budgets are tied and.
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  Speaker 2: A man in top of conditions like now, The brands
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  Speaker 2: that win are the ones that either feel essential or
• 2:48
  Speaker 2: easy to justify. For our second story, Lamborghini has ditched
• 2:52
  Speaker 2: its plans for a full electric vehicle, apparently after customer backlash,
• 2:56
  Speaker 2: because it wouldn't have an engine raw. As they say,
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  Speaker 2: at the big of the E go the loud of
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  Speaker 2: the engine, So tell me more.
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  Speaker 1: Lamborghini is the Italian luxury car maker that was founded
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  Speaker 1: in nineteen sixty three.
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  Speaker 2: It was built to compete head on with another Italian
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  Speaker 2: luxury car maker, Ferrari and Juzboy.
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  Speaker 1: The Lambo is known for its high performance supercars and
• 3:14
  Speaker 1: very loud.
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  Speaker 2: Engines aka their announcement that I have arrived.
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  Speaker 1: Back in twenty twenty one, Lamborghini laid out an electrification roadmap,
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  Speaker 1: saying that its first EV would arrive by twenty twenty eight.
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  Speaker 2: In twenty twenty three, they revealed their first EV concept car.
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  Speaker 2: But now Lamborghini's officially scrapped all of their electric figal plans.
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  Speaker 2: And why is that customers pushed back hard.
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  Speaker 1: Yeah, the Lambo CEO said that their buyers don't want
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  Speaker 1: a quiet car.
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  Speaker 2: Yep. They want a car that sounds like it's about
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  Speaker 2: to take off, even when it's just going for brunch yep.
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  Speaker 1: The type of raw that keeps up households very late
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  Speaker 1: at night. I would know.
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  Speaker 2: And the man fun fact for you, Lamborghini only sold
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  Speaker 2: just under eleven thousand cars last year globally. So when
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  Speaker 2: your entire customer base is that small, you listen very closely.
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  Speaker 2: So what is the key learning here?
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  Speaker 1: You don't mess with what customers actually value in luxury.
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  Speaker 1: Lamborghini's mistake was not investing in electric vehicle now. It
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  Speaker 1: was assuming that its customers are valued the same things
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  Speaker 1: as the broader car market.
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  Speaker 2: For most car buyers. Electric vehicles could offer a lower
• 4:10
  Speaker 2: running costs, a bit of sustainability, and of course some
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  Speaker 2: new tech. But does boy Lamborghini buyers aren't buying the
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  Speaker 2: car so that they can just commute to work. Now,
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  Speaker 2: they're buying a feeling and of course a big roaring announcement.
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  Speaker 1: Yeah, and when you strip that out, you risk stripping
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  Speaker 1: out the entire reason someone buys the product in the
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  Speaker 1: first place.
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  Speaker 2: And be man. Back in twenty twenty one, Lamborghini announced
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  Speaker 2: a one point five billion euro investment into electrification.
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  Speaker 1: And now they'll be substantially writing down the value of
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  Speaker 1: this investment.
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  Speaker 2: But in their view, it's worth it to ensure they
• 4:38
  Speaker 2: don't alienate what their customers actually value. The For our
• 4:43
  Speaker 2: third and final story, flight center share price has taken
• 4:46
  Speaker 2: off after acquiring a creative agency as it starts to
• 4:49
  Speaker 2: look to sell more than just flights.
• 4:51
  Speaker 1: Looks like flight Center isn't just booking your Barley trip anymore.
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  Speaker 1: They're planning the whole corporate offside as well. Tell me more.
• 4:56
  Speaker 2: Okay, so, flight Centers, the ASX listed travel company, started
• 4:59
  Speaker 2: as a humble Aussie shop front back in nineteen eighty two.
• 5:02
  Speaker 1: Interestingly, flight Center still has a massive physical store footprint globally.
• 5:06
  Speaker 1: We're talking more than Fine and fifty stores.
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  Speaker 2: And while flight Center still has agents that will book
• 5:10
  Speaker 2: your trip to Vietnam, it also now has a big
• 5:12
  Speaker 2: focus on corporate travel.
• 5:13
  Speaker 1: In fact, corporate travel accounted for fifty one percent of
• 5:15
  Speaker 1: the group's total transaction value in the first half of
• 5:18
  Speaker 1: FI twenty six.
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  Speaker 2: And now flight Center's announced the acquisition of a UK
• 5:22
  Speaker 2: based creative agency called Fresh Approach seems.
• 5:26
  Speaker 1: A little strange.
• 5:27
  Speaker 2: Yeah, the company specialized in brand experiences and events and
• 5:31
  Speaker 2: corporate meetings.
• 5:32
  Speaker 1: And that means flight Center is trying to become a
• 5:34
  Speaker 1: one stop shop for corporate clients.
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  Speaker 2: Yeah, they had just booking the flight to the conference.
• 5:38
  Speaker 2: They're running the entire conference themselves. Massive, So what's the
• 5:41
  Speaker 2: key learning here? The real money isn't always in the
• 5:44
  Speaker 2: core product, it's in earning more of the customer journey.
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  Speaker 1: Flight Center has traditionally made money booking travel, but that's
• 5:49
  Speaker 1: a competitive and often low margin space. YEP. Their net
• 5:52
  Speaker 1: profit margin over the last year is three point eight
• 5:54
  Speaker 1: percent compared with four point one percent a year ago,
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  Speaker 1: so it was.
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  Speaker 2: Thin and it's getting even thinner.
• 5:59
  Speaker 1: So instead of just competing on flights and hotels, flight
• 6:01
  Speaker 1: Center is looking to expand into other services like events,
• 6:04
  Speaker 1: like experiences, because the more touch points you control, the
• 6:07
  Speaker 1: more revenue you can capture.
• 6:09
  Speaker 2: And the harder it is for customers to leave your
• 6:11
  Speaker 2: travel ecosystem plux AM. If you've applied for a credit
• 6:14
  Speaker 2: card or a home loan or even a car loan
• 6:16
  Speaker 2: over the last month, that will be impacting your credit score.
• 6:18
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• 6:20
  Speaker 2: credit score, whether it's gone off, whether it's gone down,
• 6:22
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• 6:24
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• 6:25
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• 6:27
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• 6:29
  Speaker 1: Thanks for listening, and we'll see you on Wednesday.