By Patrick Avenell
SYDNEY, NSW: Clive Peeters managing director Greg Smith has explained why the publicly listed retail group was forced to close three stores recently, and why a fourth store closure is also planned. Eight staff members are set to lose their jobs, with the unprofitable stores closed for not properly adhering to the Clive Peeters business model.
Smith said the three stores that have already closed, in Greensborough, Victoria; Northbridge, Western Australia; and Aspley, Queensland, were all small format, non-profitable stores. The fourth store closure, planned for the coming weeks, will be in Hervey Bay, Queensland. It is from this last store that eight Clive Peeters staff members will be let go. The timing of these closures is focused on the opportunity for the group to walk away from leases.
“They were all lease expiry opportunities, so we had the opportunity to walk away from stores that were not profitable,” said Smith. “They were all stores that were acquired in acquisitions, so they weren’t premium stores; they were ones that we picked up in clusters of stores that we bought, so it was a good opportunity on the expiry of the leases to walk away from them.”
When asked how these closures would affect staff, Smith said that it should only significantly affect one of the stores.
“In some cases we’ve managed to relocate staff into nearby other stores, like in Perth and Melbourne, so that virtually involved no loss of staff. In the Hervey Bay one though, unfortunately there are, I think, about 8 staff in that store…and we’re going to have to let those people go, because we don’t have a store nearby sufficiently close to relocate them to.”
Due to the demographics of the Hervey Bay area, Smith is confident these staff members will be able to find new work.
“No doubt they’ll pick up work in the area, it’s still a reasonably prosperous area, Hervey Bay, but the store there was a tiny one and it just didn’t suit our footprint and it was a real anomaly in our group.”
Smith explained that the Clive Peeters format can’t work in smaller sizes stores, as there is not enough room to properly display the big ticket items the group specialises in. At the Hervey Bay store, Smith said there was no cooking display and “very poor” displays of air conditioning and refrigeration.
“It really wasn’t befitting to what we’re trying to do, so when the lease expired, we thought ‘well here’s the opportunity’, so we’ve taken it.”
Smith concluded by reassuring staff and the industry that there are no more store closures planned.
“That will bring to an end all of the store closures for us,” he said.