The Reject Shop to spend $5m on its systems and technology

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The Reject Shop to spend $5m on its systems and technology

Drawn from $22.5 million saved under cost reduction exercise.

The Reject Shop plans to reinvest around $5 million into systems and technology that it saved through reductions in its costs of doing business.

The Australian discount chain cut business costs through simplifying ways of working across its stores and head office, to the tune of $22.5 million in FY21.

Some of those savings will be invested back into the business.

“We plan to invest around $5 million in FY22 to improve systems and technology, as well as prepare for growth,” chief executive Andre Reich told investors during an FY21 results call.

“This includes upgrading our replenishment system which will allow us to increase the number of products we have on replenishment and in turn improve availability of products for our customers.”

Chief financial officer Clinton Cahn told iTnews that part of the investment will also include “modernisation” of the retailer's data centre.

Cahn said the data centre “needs to be modernised and potentially moved offsite or on to the cloud.”

The Reject Shop will also invest funds into improving visibility of its supply chain “from factory to customer”.

“We're working on upgrading systems, tools, processes to give our team greater visibility of stock flows from factory all the way down the stores so we can prepare for potential future disruption but also have a good sense of [where stock is] all along the chain” Cahn said.  

Elsewhere in its results, The Reject Shop said it has named 'stores of trial' in each state “where we test new ways of working, new technology and other innovation before rolling it out to the broader national network.”

Cahn said the ‘stores of trial’ initiative will include testing new registers and equipment however will predominately be “more operational innovation than it is technology”.

“That's the main focus of those stores is to trial new ways of working and at times new technology as well," he said.

Online delivery

In FY21, The Reject Shop also launched its new website in partnership with online food ordering and delivery platform DoorDash.

Under the joint venture The Reject Shop delivered orders to customers from around 255 stores across the country.

Reich said the business will continue to grow its online sales in partnership with DoorDash “as well as explore other options for online growth.”

Covid-19 remained a challenge for the business due to the loss of foot traffic in shopping centres where its stores are typically located.

This resulted in a small number of store closures, however over the next year the company plans to open 20 stores.

The Reject Shop reported a net profit after tax of $8.3 million, up from $1.1 million last year.

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