Australian Retail Chain Glue to Shutter All Stores by 2026 Amid Financial Struggles
The popular Australian retail chain Glue has announced the closure of all its 16 stores by the end of the 2026 financial year, a decision driven by severe financial underperformance and mounting losses. Experts have pointed to high labour costs and a significant dip in consumer spending, exacerbated by the ongoing cost-of-living crisis, as primary factors behind the collapse.
Financial Performance and Impairment Issues
In a trading update released on Thursday, Glue disclosed that an impairment test revealed an Earnings Before Interest and Tax (EBIT) loss of $8.4 million during the first half of the 2026 financial year. The report further indicated that multiple stores required impairment write-downs, highlighting the brand's deteriorating financial health. This follows years of ongoing underperformance, culminating in the decision to cease operations entirely.
Expert Analysis on Labour Costs and Consumer Spending
Gene Tunny, director of Brisbane-based consultancy Adept Economics, attributed the collapse largely to the pressure of meeting Australia's high minimum wage standards. 'Labour costs have increased – or are relatively high – in Australia compared to other countries due to minimum wages,' he explained. 'If their costs were lower, they would not be losing as much. This makes retail particularly difficult, as entry-level workers can be relatively expensive.'
However, Tunny also noted that while employees earn steady minimum wages, the high cost of living has led to reduced consumer spending. 'Discretionary spending is not as strong as it would otherwise be because households are struggling with real wage declines,' he said. 'We haven't had any real wage growth over the last decade or so, which means less discretionary income for goods and services.'
Broader Economic Context and Insolvency Trends
The collapse of Glue occurs against a backdrop of economic challenges across Australia. In December 2025, the economy recorded 1,366 insolvencies, the third-highest monthly total ever. Real wage growth, a critical measure of purchasing power, remains stagnant around 2011 levels despite recent nominal pay rises.
The Reserve Bank's latest forecasts, published in its Monetary Policy Statement on February 3, indicate that inflation is expected to outpace wage growth until at least mid-2027. This projection ensures a continued erosion of household purchasing power, with economists arguing that such a squeeze is necessary to control inflation. Consequently, households are likely to tighten discretionary spending further, placing additional pressure on the broader retail sector.
Customer Reaction and Brand Background
Glue, known for stocking popular brands such as Nike, Ksubi, New Balance, Adidas, and Birkenstock, has left customers devastated by the closure announcement. One shopper lamented on social media, 'One of my favourite shops, I buy heaps of things there, what a loss.' In response, Glue is currently offering a 30 percent sale on already discounted items on its website, with 40 percent off t-shirts and shorts.
The brand, founded in 1998 by Australian retail entrepreneur Hilton Seskin, was acquired from JD Sports Fashion in 2021 by Accent Group. Accent Group owns and operates several major retail chains, including The Athlete's Foot, Hype DC, Platypus Shoes, Skechers, and Vans, and distributes brands like Dr Martens, Timberland, Hoka, and Lacoste in Australia and New Zealand.
Strategic Shift and Future Plans
It is understood that Accent Group decided to close the remaining Glue stores after five years of ownership to narrow its focus on global brands. This strategic move aligns with the conglomerate's plans to open five new Lacoste stores over the next year, following its appointment as the exclusive local distributor of the brand in 2024. The closure of Glue marks a significant shift in Accent Group's portfolio, reflecting broader trends in the retail industry as companies adapt to challenging economic conditions.
