By Martin Vedris
MELBOURNE: Electrical appliance retail group Clive Peeters continue to expand into the highly competitive Sydney market with their fifth NSW store at Bella Vista in Sydney’s northwest, which is expected to begin trading in early August.
NSW is proving to be a difficult market for the publicly listed company. In an earnings announcement to the ASX in June this year, Greg Smith, the group’s managing director stated that the business was performing well in all states except NSW. He said that the retail brand was taking longer to become established in NSW than they “had hoped for and expected”.
Smith said he believed that the opening of their fourth NSW store in Auburn in May this year and then the fifth at Bella Vista would provide better economies for their advertising warehousing costs.
The Bella Vista store brings the number of stores in the group to 20 Australia wide. The company has been operating in Melbourne since May 1993 when the one and only Clive Peeters store at Ringwood, Victoria, was acquired by Greg Smith and Peter Lord. Before Smith and Lord took over the Ringwood store, it was reportedly generating approximately $15 million in annual sales and employed 25 staff. Since then, Clive Peeters has embarked on a national growth strategy with its second store opening in Dandenong, Victoria in 1995.
The group expanded into the Queensland market with their Brisbane store and central warehouse opening in 2001. The group listed on the Australian Stock Exchange in 2005 under the ticker code CPR and since then opened the NSW stores.
With NSW sales underperforming expectations to date, analysts will be looking closely at their 2007 year end results, to be released on 31 August. Their half year results released in February showed a 51.7 per cent increase in profit to $9 million. However the company is only expecting a full year profit after tax of $12.1 million to $13.1 million due to the high costs of establishing the brand in Sydney.
The Bella Vista store is located at Shop 13-16, Totally home Bella Vista Centre, 4-6 Celebration Drive Bella Vista, near Baulkham Hills.