Smiggle fights sluggish growth for past two years
The brand was once the envy of grade school students and the crown jewel of a billion-dollar retail empire; but Australian stationery giant Smiggle has spent the last two years struggling with slow growth and spectacular infighting.
In 2023, Smiggle was rapidly expanding its stores into new markets and recording record sales, but its performance has dropped significantly since then.
Smiggle’s global sales fell 10.7 percent annually to $264 million in fiscal 2025, after falling 7.4 percent in the previous year.
It’s a striking shift from the brand, which was one of the most successful in the portfolio of billionaire Solomon Lew’s listed retail empire Premier Investments.
Premier Investments acquired Smiggle’s parent company, Just Group, in 2008.
By 2016 Smiggle was rocketing to the top of the Australian stationery market by offering school supplies as colourful, quirky accessories.
Griffith University retail and consumer expert Graeme Hughes said Smiggle was pioneering this “trendy” stationery brand in the school supply market, which otherwise emphasizes functionality.
“Their products were primarily aimed at children and 2- to 3-year-olds and quickly became something of a status item in classrooms,” Mr. Hughes said.
Smiggle continued to grow, reaching its peak in 2019 with over 350 stores worldwide in Australia, New Zealand and the United Kingdom.
The brand slowed significantly during school lockdowns in 2020, 2021 and 2022, but a post-pandemic sales surge in 2023 propelled Smiggle to its highest global sales figure of $319.8 million.
Shortly afterwards, Premier Investments announced it would examine the possibility of splitting Smiggle into a separate ASX-listed company.
But by the end of fiscal 2023, the brand was already showing signs of decline and Smiggle was forced to close 56 stores worldwide.
“There are a number of factors that are hindering Smiggle’s growth,” Mr Hughes said.
“Cost-of-living pressures are particularly damaging to young families, who are their core customer base. They will cut back on such discretionary products.”
“Competition in this market has also intensified. We are seeing national players like Kmart really stepping into this space.
“Smiggle also competes with a highly connected digital ecosystem where digital rivals such as Amazon and Temu can deliver stationery to your door within hours.”
Despite the shrinkage of its stores in the UK and Australia, Smiggle has continued to expand into new markets in the Middle East and Indonesia, where it has entered into wholesale partnerships to expand its presence.
Smiggle also suffered the departure of its former CEO, John Cheston, who worked at jewelry chain Lovisa, as the brand struggled to gain a foothold in an increasingly competitive market.
Mr Lew was forced to pause plans to launch Smiggle as a standalone company on the ASX.
“I think they’re really trying to strengthen their leadership group and their strategic direction over the next three to five years, then I would imagine they might rethink turning (Smiggle) into something of its own,” Mr. Hughes said.
The future of Smiggle, which still lacks a permanent chief executive and is struggling with tough competitors, is uncertain.
