Fraud, lying and deceit: just another year for CE retailers

Compiled by Patrick Avenell

SYDNEY, NSW: It was the best of times. It was the worst of times. This famous quote from Charles Dickens’ masterpiece A Tale of Two Cities perfectly sums up the year in retailer news.

Although they are based in the same city, Clive Peeters and JB Hi-Fi were the contrasting stories of 2009: one posted record results despite the economic downturn, while the other is picking up the pieces from a $20 million betrayal. This is Current.com.au’s look back on the biggest stories in retail in 2009.

No surprises at the top of this list, with Clive Peeters’ $19.4 million shortfall, investigation, trading halt and criminal charges against former employee Sonya Causer well ahead of all other stories. After two years of disappointing results and a nosediving share price (once as low as 6 cents), Clive Peeters was able to steer back on course after discovering the alleged theft. The share price is still well short of its peak, and a conviction is yet to be secured, but a 9-fold increase over 12 months is mightily impressive.

Still in Melbourne, new kids on the block Costco ruffled some high-flying feathers when it opened its first Aussie store in the Docklands region. Bulk merchandise, a membership fee and low overheads enabled Costco to offer some remarkable deals on flat screen TVs, prompting JB Hi-Fi CEO Richard Uechtritz to hit out at this market distortion. Current.com.au travelled to Melbourne for this investigation, and the net result was the second biggest retail story of the year.

If Clive Peeters was struggling and JB Hi-Fi soaring, Harvey Norman was someone in between. The first half of 2009 was worrisome for Australia’s most iconic retailer, with profits down and margins under pressure. In addition, the Ireland operations once again drained money from the organisation. This prompted mass franchisee changes at the start of the year, a topic which always generates strong interest within the industry. This move looks to have worked, with Harvey Norman reporting much better figures by the end of the year.

One man who has done a lot to challenge the traditional retail model is entrepreneur Ruslan Kogan. His eponymous brand, which is sold online, has been successful since launch, with TVs, computers and mobile phones his biggest markets. It was not all good news for Kogan though, with the ACCC slamming the direct-to-consumer importer for misleading advertising. The popularity of this story showed just how much the traditional retailers are keen to watch over their patch.

The first story on this list was Clive Peeters’ woes, and fifth on the charts is the direct opposite: JB Hi-Fi’s highs. The listed retailer racked up $2.3 billion in sales in FY2009, up a whopping $500 million. Net profit was a more than handy $94.4 million, up more than 30 per cent. As a result of this, CEO Richard Uechtritz received a handy pay rise, shareholders celebrated and JB Hi-Fi was elevated into the upper echelons of Australian retailers.

Top 5 Retailer Stories of the Year

1. Missing Clive Peeters Millions Allegedly Embezzled by Staff Member
2. Costco TV Discounts Make Mockery of RRPs, Rival Retailer Hits Out
3. Harvey Norman Makes Sweeping Franchisee Changes
4. ACCC Blasts Kogan Technologies: Bad Advertising Hurts Retailers
5. JB Hi-Fi Smashes Records with Remarkable Profit Announcement

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