The chief executive of online retailer Kogan has warned the current macroeconomic environment is shaping up to be incredibly challenging for businesses as the Ukraine crisis and continued supply chain disruptions weigh.
“We are operating in a very challenging environment with shortages left, right and centre, inflationary pressures, supply chain disruptions, pallet shortages and various conflicts around the world,” Ruslan Kogan, the company’s chief executive told The Age and The Sydney Morning Herald.
Ruslan Kogan’s online group is winning extra customers but grappling with supply chain disruptions which are affecting all players in the retail sector. Credit:Louie Douvis
“It hasn’t been smooth sailing. We’ll just have to roll with the punches.”
Kogan is a major digital retailer of electronics, furniture and home appliances, areas that have been popular during the pandemic as locked-down customers shifted their shopping online.
However, on Friday, the company reported a downbeat set of financial results, with underlying earnings swinging to a loss of $11 million for the six months to the end of December, a fall of more than 150 per cent on the prior year.
Loading
The sharp decline was due to a number of one-off costs, including $13.6 million in compensation for Mr Kogan and the company’s chief executive, David Shafer, and the final payments for the business’ acquisition of New Zealand online retailer Mighty Ape.
When adjusted to exclude these items, Kogan’s net profit was $4.8 million, which was still a massive 85.6 per cent decline on the prior half. Sales at the company rose, with revenue up 1.3 per cent to $419 million.
Mr Kogan said this fall was largely due to the company’s struggles with supply chain disruptions through the half, which forced the business to spend more on storing its inventory in warehouses, distributing products, and marketing. Kogan was also forced to slash prices to clear out excess inventory in its warehouses, which hurt its margins.
