By James Wells
SYDNEY: Leading Edge Group (LEG) chief executive officer, Keith Lane, sent a document to BSL members outlining the reasons his buying group should win a bidding war against a retail consortium headed by Everard Johnson to purchase the Betta Stores Limited franchise business.
In the document obtained by Current.com.au, Lane said that trust, and the ability to control their own future are the key isses BSL members should reflect on when deciding between the Leading Edge offer and that of the Retail Consortium.
"Many of you have put 20 years hard work into your businesses and your brand," Lane said in his statement.
"But you have been failed by poor management and bad decisions by the very people who are now trying to persuade you to give them a second chance with YOUR money and YOUR future. They got it wrong, but won’t admit responsibility.
"How can you again trust them and their promises when the evidence is so clear? Membership has dropped by 40% over the past 3 years. You have lost your shareholding, the revenues from the Telstra deal, your $7,500 deposit and now, your rebates from suppliers. They have damaged your brand by letting the situation get to where it is today.
"Let me make it clear. Leading Edge will retain your IT system, which we regard as excellent but could be better managed. We are going to protect your brand, grow it with you an the supplier networks you depend on. We will form member committees to make sure all this happens with your input.
"At Leading Edge, every member has one vote, regardless of their status as a shareholder. The Leading Edge Board, runs the company; the members committee and the members at large run the group to avoid conflicts of interest.
"At Leading Edge, we pay members the rebates they are entitled to. Your rebates are your rebates.
"Our opposition say they will employ 40 staff. That’s at least $4 million in wages alone, coupled with $1.7 million on IT. Add in all the other expenses and the numbers just don’t add up. Their offer just doesn’t add up.
"There is now winding the group back to 1999, those days have gone. What the group needs is a new and proven model and that is exactly what LEG is offering. Logic says you can’t go forward with the consortium that has taken you backwards.
"They say we don’t know about white goods and the supply chain. Wrong again. The man we have chosen to head your group comes with seven years experience in white goods both in buying and marketing for Australia’s largest retailer. Additionally, he brings operational experience from owning and running his own retail/wholesale appliance franchise.
"He is known by your suppliers.
"And the suppliers we have spoken to know nothing about additional rebates being promised by the Retail Consortium.
"They have told us that they will go wherever you as members decide to go, that business will be as usual and even that they will provide more support with LEG involved.
"I understand it is a difficult decision for many to shift from what you have known for so long. But you have to decide your future, and that of your brand, and that must be built on trust and deciding who can best represent your interests, protect and re-build the brand and reputation. We will do that without asking you to invest yet more of your own money.
"Our offer is built on a true partnership with every single member – one that will increase your sales, margins and cash flow, reduce your costs, support the brand and the group and draw on the depth of your retail experience and supplier relationships.
"Our performance is proof of that. Just ask our 1,600 small business retailer members around Australia – people just like you, with similar goals to you.
"I ask that you reject the Retail Consortium offer. Take up the Leading Edge offer instead and build a better future for you and your business."