Aussie clothing retailer Jeanswest has collapsed into voluntary administration. There are 988 jobs at risk after the group's collapse, with administrators KPMG pointing to online competition and a "challenging Australian retail market".
So, what does this mean for Jeanswest's ASX-listed retail peers?
Why Jeanswest collapsed into voluntary administration
It's no secret that bricks-and-mortar retail has been a tough environment for years. January is usually an interesting period for ASX retail shares as companies assess their Christmas sales and re-evaluate their business.
That appears to be the case for Jeanswest, which has begun the restructuring process in the wake of weak sales.
However, the group is far from the only Aussie retailer to restructure or collapse in the last 12 months. Big names such as Ed Harry, Harris Scarfe, Bardot and Napoleon Perdis have all experienced a similar fate.
What does it mean for ASX retail shares?
There aren't too many ASX retail shares that compete with Jeanswest directly. However, there are several groups that still have significant bricks and mortar operations.
The Myer Holdings (ASX: MYR) share price has been hammered in recent years and is down 61.48% in the last 5 years. However, that may be the exception after a strong year for the listed retailers in 2019.
Harvey Norman Holdings (ASX: HVN) and JB Hi-Fi Limited (ASX: JBH) both recorded strong capital gains last year. The two ASX 200 shares are up 41.21% and 94.63%, respectively, in the last 12 months.
It's a similar story for Super Retail Group Ltd (ASX: SUL), which owns and operates brands such as Supercheap Auto, BCF and Rebel Sport. The Super Retail share price is up 56.71% in the last 12 months and is well ahead of the benchmark ASX 200.
So with all of these ASX retail shares rocketing higher, you'd be forgiven for thinking that there aren't any issues in the sector at all.
However, while low interest rates have helped boost sales in the last year or so the underlying economic data in the retail sector still isn't all rosy.
Strong Black Friday sales saw retail sales smash economists expectations but the long-term downward trend isn't going away just yet.
If you're holding ASX retail shares at the moment, I'd be keeping a close eye on the sector as we head into the February reporting season.
