Country Road's results for the six months ending December 31 showed an increase in same-store sales of 4.5%, which unfortunately came at a cost to gross margins and earnings in last year's promotional free-for-all.  Ebit margin declined from 8.3% to 6.5% of sales and pre-tax profit was down 11.2%.

Although the retailer has laid part of the blame on the general trading environment, it's also a reflection of the struggle that fashion retailers at Country Road's price point are experiencing worldwide to convince fashion shoppers that they offer good value for money.  Pushing the bland old "iconic lifestyle brand" barrow just won't cut it anymore.  There's too much competition in that space.  This is all about relevance. 

Ten years ago Country Road got run out of the U.S. because it was overpriced and didn't have a product that made it stand out from the crowd.  I remember the U.S. mall stores well -- they were pretty sterile affairs, and the merchandise was absurdly expensive and undistinctive even in those go-go days of lifestyle retailing.

Country Road in Australia still resonates enough to ensure the brand will be around for a while. However, Australian fashionistas have increasing access to upscale global brands from their desktops.  Country Road has to raise the bar or it will be a shrinking brand instead of a growing one.