ess [to PAS]. The PAS business is 70% fashion and 30% shoes, whereas this one is the other way around. It’s probably 70% shoes and 30% fashion.  The businesses have a similar DNA. They really own brands and take brands to market. They have a retail-wholesale philosophy — they have their own stores, they’re in large department stores [through concessions] and they hold licences for a bunch of very well loved and established brands. They’re also a well-run business. We felt we were getting involved in something that was already well operated.  IR: What about that mix of own stores, concessions, wholesale and licencing appeals to you as a retail business model?  LK: I love consumer brands. I think people are very brand-driven. To me, a big differentiator is obviously quality and what you buy, but people trust brands. So for me, I want to be the best operator of brands, and I want brands to trust what it is that we do. To me, it’s no different whether we own or licence a brand, our job is to figure out what the best go-to-market strategy is. That could be an own retail store, it could be a concession store, it could be a wholesale deal — whether it be a high-end store or discount department store — it’s all about finding the right go-to-market for a particular brand. And both of these organisations do that really well.  There’s not a single formula that works in the right way. There’s no cookie-cutter approach. That’s where I think retail has gone a little bit wrong with old-school retailers thinking there’s a particular method to the madness that everyone needs to follow. I think it’s the other way around. You need to be very strategic and understand what each brand needs for it to be successful — where it should be, how it should be distributed and how it should be represented. IR: So when it comes to future acquisitions, are you more interested in brands and business with portfolios of brands, rather than a multi-brand retail business? LK: Yes, I would say we’re more interested in brands. As brands come into Australia, I want them to think of us as the best home to represent brands, and we’re already getting approached by overseas brands. I’m also interested in companies that have built brands locally that want to grow. So if there are brands out there that have already built something and have a following and want to scale and grow — whether they need capital, skills, or whatever it is to grow their brands — we’re happy to chat with them. The door is open, and we’re ready for business. We are an organisation that now has scale with over $550 million turnover, 250 freestanding stores and 113 concessions. We’re a player in the retail space, and we want to continue to grow.  IR: A lot of people describe retail as a really challenging business to be in. It certainly is right now with Covid-19. What’s driving your decision to invest in retail?  LK: I don’t buy into the idea of retail as a failed or struggling sector. I think it’s a sector that is going through an evolution like a lot of industries have. I mean the idea of banking has been around forever and probably will be here for a very long time, but everyone has to evolve, and I think that’s the phase that retail is going through. Me not being a retail guy, I’m coming in with a completely open mind as to how these things should be run. We all will continue to buy things, we just need to evolve as a business and make sure that we’re meeting the customer’s needs as to how they want to buy. I think retail stores are here to stay for a long time, but there is a very strong online component. We want to be the best at digital, and we’re going to continue to invest in that component of it, but it’s about merging all of those aspects together. There’s a lot of buzz terms like omnichannel, but to me, it’s ultimately about evolving.  We’re not going to be the company that has that Kodak moment. We’re coming into this with eyes wide open, realising there’s an opportunity here. It’s a very substantial sector, and you have to look past Covid. I’m looking at this as a longer term play, not what will happen in the next three, six or 12 months. I’m buying businesses that are credible, that have strong brands, and I’m investing in brands, that’s what I’m doing.  If you look at the collection of brands we now have in our portfolio — Superdry, Hush Puppies, Review, Slazenger, Lonsdale, Bluey, Marvel, Disney and so on — they’re strong brands. They’re not going anywhere. It’s on us to make sure that we represent them in the right way. We want to grow Shoes & Sox as a business. I think it’s a great business and something that services are a real need in the community, and that’s something we want to keep growing.  IR: What other plans do you have for Brand Collective? LK: We want to understand from each business owner what it is they need from us to grow. We’ve already had those conversations with each organisation and none of them are the same. Some are focused on expanding stores, some are focused on revamping certain channels and we’re also looking at bringing more brands on board. For us, it’s around growth. If that [requires] reinvestment, then we’re very comfortable doing that because we’re not a traditional private equity firm. We don’t have a three-year window where we have to get in and out, we may very well be long-term owners of these businesses.  We’re happy to invest in the short term to gain long term benefits. There are some amazing opportunities there. When you look at Volley, it’s an old Australian brand that’s loved by a lot of the general public that really hasn’t had a lot done with it. We’d like to revamp it and figure out what it’s rightful place in the industry is.  IR: Can you give an update on what’s happening with PAS Group?  LK: I’ll start off by saying that we have to exclude the effects of Covid from any sort of positive conversation. We’re all struggling, with more than half the country in the middle of a lockdown. I don’t think any business is too happy right now unless you’re selling toilet paper in the supermarkets.  But putting that aside, [before] these latest lockdowns, we were tracking extremely positively. We managed to turn the business around from being a loss-making or breakeven business to a business with strong profitability and one that’s moving towards the record profits it experienced in the earlier days.  And I’m happy to say the mood of the business is extremely upbeat. It’s not easy out there, but everyone feels like we’re absolutely on the right track.  IR: What are a few things that have been instrumental in getting back to that profitability? LK: You have to have a very clear strategy. The way I would describe it is if the rope is not held tight, it’s very hard to move forward, and that’s where I think the business was at. Being a public company, being owned by an organisation overseas, most of the board was based overseas, there was not a clear strategy for what the business needed to achieve. It became a little bit top heavy and expense heavy — running public companies is not a cheap exercise — so having a very direction and vision of what we were trying to achieve was very important.  We also gave people certainty. Between Covid, administration and everything else, it was not necessarily the happiest place to be working. PAS Group has some amazing talent, and those people want to be winners. We gave them the confidence to go and do what they needed to do, and the results are showing. They all feel like winners.  IR: Looking ahead, what are your key priorities? Is it about revamping stores? Reaching new customers?  LK: Digital is still a huge part of what we’re looking at. Making sure that we’re the best in breed in how and where we present our product. And that is ever evolving, so it’s about continual growth and investment in the online presence.  I think the marketing component of it needs to improve. There’s not been a huge amount of marketing investment in some of these brands because people have run them on very  tight budgets. So we are absolutely going to be investing in revamping stores and concession stores and bringing them up to standards, as well as general marketing and promoting the brands. IR: When you think about marketing and getting brands back in front of customers, do you see that as TVCs and outdoor campaigns, or are you looking to go down the digital advertising route? LK: I think each brand is a different story. If you take something like a Shoes & Sox, it might be more traditional marketing. Promoting a brand of that nature and driving people into a store requires one approach, whereas a fashion brand like Review might require an influencer campaign and a bit more on digital and social media.  But people want to feel confidence in brands and they want to see other people wearing the clothes. We are influenced by trends and fashion — that’s what that industry is about. We’ll be designing a way forward for each business and brand separately. IR: When you look at bringing more brands on board will you stick to fashion or branch out into other categories like beauty or homewares? LK: Think brands and consumers — that’s really what we’re about. I wouldn’t rule anything out, but we would want to make sure that it’s complementary to what we’re doing. We would look at something like homewares, but I don’t think you’ll see us in food and beverage — that’s a different type of business. But as long as we think it’s complementary then we’re absolutely open to it. We don’t intend to bring [PAS Group and Brand Collective] together, we just want them to collaborate together, so whatever business we bring in, we want to feel like it’s complementary. Whether it’s marketing or logistics, how can we all gain something from each other? That’s an important part for us.  IR: What’s your thinking around keeping the businesses separate rather than consolidating the leadership?  LK: There are a few reasons. Number one, you don’t change things if something’s working. You only change things if you feel things are not working.  Number two, they are big enough businesses to have their own groups within them. I think if you become too widespread, you get too far away from the individual businesses. Putting them all together under one umbrella would actually remove people even further from understanding what each one of these brands needs and stands for.