STOCK WATCH: Adore Beauty share price takes a battering

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By Published On: December 6, 20220 Comments

It's been a tough fortnight for the ASX Listed E-Com Index, underperforming compared to the ASX200, with Adore Beauty the worst performer.

The Adore Beauty share price closed at $1.43 on Monday, marking a 19.3% drop over the last 14 days. This makes it the worst performer on the ASX Listed E-Commerce Index by a substantial margin.

Last month, Adore Beauty announced that Tamalin Morton will be taking the reins as CEO, starting on 9 January. She brings to the role more than 20 years retail leadership with CEO, General Manager and Chief Operating Officer roles at Priceline, Kathmandu, Spotlight Retail Group, and most recently Best Friends Pets and My Pet Warehouse.

“Tamalin’s extensive industry experience will be instrumental in fast-tracking our growth, and delivering on our strategic initiatives to increase revenue, customers, and margins over the short and longer term. She brings relevant category experience and a proven track record of driving growth within omni-channel, high-growth entrepreneurial businesses,” said Chair, Marina Go. “Tamalin’s customer-centric approach and focus on team culture aligns with Adore Beauty’s values. The Board is particularly excited by Tamalin’s ability to scale businesses quickly. Importantly, Tamalin’s marketing credentials will be invaluable as the industry continues to navigate higher customer acquisition costs.”

“Adore Beauty is at an exciting juncture in its growth trajectory with two owned brands now successfully launched, and the structural shift to e-commerce well underway. In addition to the business’ clear growth strategy, I see additional opportunities for Adore Beauty to capitalise on its market-leading position to increase basket size, order frequency, and profitability,” Morton said of her appointment.

The appointment not only failed to lift the Adore Beauty share price but it has since been hammered on the ASX (continuing to fall to $1.40 by lunchtime on Tuesday).

ASX Listed E-Commerce Index

Source: ASX Listed E-Commerce Index based on ASX reporting for the period

Booktopia’s share price also dropped following its AGM (in which outgoing Chairman Chris Beare described the year under review as one of the “most challenging” in Booktopia’s 18-year history). Last Thursday, it announced the appointment of its new Chairman and non-executive Director, Peter George (replacing Beare). George comes to Booktopia with a background in telecommunications, media and corporate finance. “Booktopia’s strong market position and loyal customer base mean it has huge potential for further growth,” George said.

On Friday Booktopia also announced its exit from Welbeck (selling its 25% interest in the business for a cash consideration of $AUD1.5 million to its partner in the venture, Welbeck Publishing Group Limited (UK)), dissolving its Australian distribution agreement. Booktopia acquired its interest in Welbeck Publishing Pty Ltd (Australia and New Zealand) in 2021 for $3.1 million, writing down down the value of the investment by $2.2 million earlier this year.

The Booktopia board is currently finalising the appointment of two further Non-executive Directors and a new CEO. The pureplay book retailer closed at $0.205 on Monday, shedding 8.9% in the last 14 days.

The Kogan share price also dropped in the last fortnight, down 4.8% to $3.34. Like Booktopia, it experienced a post-AGM slump, with news that the company’s gross profits for the financial year-to-date (July-Oct 31) at $41.1 million, down 40.6% on the same period in 2021. Director Janine Allis snapped up 10,000 ordinary shares at $3.33 on Monday (bringing her total to 14,761 ordinary shares). With shares in the retail space severely underperforming (and price to earnings ratios eye-wateringly low), it could be seen as an opportunity. Regardless, Kogan shares have continued to slide on open.

Temple & Webster is down 2% in the last fortnight, with Cettire up just 0.7% in the same period.

Bike Exchange is the best performer in the last two weeks, up 5,9%, but for context it closed at $0.018. Redbubble is also up in the last 14 days, lifting 3.4% to $0.605. Yesterday it announced the appointment of Mark Hall as interim CFO, replacing Emma Clark. It has yet to find a permanent CFO.

The success of Cyber Week, heightened online spend in the lead up to Christmas and strong consumer confidence in the face of the rising cost of living has done little to boost ASX-listed pureplay online retailers. In the last fortnight, the ASX Listed E-Com Index has dropped 4.8%, underperforming compared to the ASX200 which lifted 2.6% in the same period.

Figures are current as at close of ASX on 5 December 2022. This is analysis only and not intended as investment advice.

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About the Author: Natasha Scholl

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