The Winning Group has today completed the purchase of fellow Narta member Kitchen HQ (KHQ) , an upmarket appliance retailing chain started by Rick Hart and Nick Kirby, which has three stores in Perth. This acquisition marks The Winning Group’s entrance into the highly lucrative West Australian appliance market.
The Winning Group currently owns and operates Winning Appliances, Appliances Online, BigBrownBox and the Handy Crew.
“As a Group, we are continuing to experience strong demand and this investment will leverage our current distribution network in Western Australia, whilst also enabling our century-old bricks-and-mortar business, Winning Appliances, to enter the Western Australia market,” said Group CEO John Winning.
“Kitchen Headquarters is well-respected within the Australian appliance industry and its acquisition will see two like-minded Australian businesses come together to provide Western Australians with the best appliance shopping experience possible.”
Rick Hart said he was excited to join The Winning Group.
“Having worked in the appliance industry for more than 30 years, I am looking forward to joining a company that not only shares my passion for appliances, but upholds similar values and a high standard of customer service,” Hart said.
Hart and business partner Nick Kirby first met in 1999 — Kirby accused Hart of overcharging him for a washing machine — and the pair will continue in their management positions and all existing teams will retain their roles.
David Crane, who specifically manages Winning Appliances within the Winning Group as its CEO, said:
“Similarly to Winning Appliances, KHQ is a premium kitchen and laundry appliance retailer that provides exceptional customer service and a unique showroom experience.
“The company’s offering and culture is a great fit for our business as both brands have a distinct focus on customer satisfaction and maintain long-standing relationships with suppliers.
“We are looking forward to working closely with Rick Hart to continue providing West Australians with a premium appliance shopping experience that’s second to none.”
Hart and Kirby opened the first Kitchen HQ outlet in 2010 in Osborne Park and have since added a second showroom in O’Connor and a third in Joondalup to the business.
Hart has been involved in electrical retailer since 1975 when he first began selling hi-fi equipment. Over the course of the next 30 years, Rick Hart sold and bought back his chain from the Strathfield Group before selling it to the publicly listed Melbourne-based Clive Peeters chain. After Clive Peeters collapsed in early 2010, the Rick Hart brand name was sold to Harvey Norman, who maintains ownership of it. It is for this reason that Hart cannot leverage his incredible popularity in Western Australia in his business name.
The Winning Group’s acquisition of Kitchen HQ comes amid speculation that company CEO John Winning, a member of family that retains 100 per cent ownership of the Group, is exploring options to sell or float some or all of the company. Winning rejected several assertions regarding this in a blog post in early June 2014.
Bringing these three Kitchen HQ outlets into the fold means The Winning Group will have 12 showrooms across Queensland (2 stores), New South Wales (7) and Western Australia (3).
The two retail brands share significant synergies, such as a desire to trade at the predominantly premium end with full service kitchen appliance brands, often from pro forma vendors. Kitchen HQ showrooms are large and spacious with appliances laid out by brand, rather than by type, in much the same way as Winning Appliances’ flagship Redfern store. In August 2013 when Kitchen HQ opened its second showroom, Appliance Retailer reported that:
Compared to the exciting but extravagant Winning Appliances retail concept that was launched in Sydney, KHQ O’Connor cuts the right corners and efficiently presents the best products from the world’s best brands: Miele, Smeg, Sub-Zero, Gaggenau, Neff, ASKO, Electrolux, Bosch, ILVE and Fisher & Paykel.
Rather than employing a traditional retail designer, Hart employed someone who specialises in designing nightclubs, and in addition to the sky-high ceilings, the fluorescent lighting is a very distinctive component of the store’s look and feel.
Like Winning Appliances, the new KHQ O’Connor store has around 20 separate locations showcasing each brand’s message to the consumer in a slick kitchen fit-out.
But KHQ also has separate product category comparison areas for refrigeration, washing machine and dishwasher brands. This best of both worlds approach allows consumers to test 20 products in the one location without having to visit 20 separate locations within the store.
The Winning Group’s decision to acquire Kitchen HQ as its West Australian beachhead means it does not need to compete directly with his long-time Narta stablemate and respected rival, Rick Hart, to carve out its slice of the West Australian retail pie. Even in the challenging economic circumstances, when consumer confidence is low and national economies of scale are essential, The Winning Group has resisted the temptation to open its own showrooms in the West or in Victoria, which has traditionally been E&S Trading’s patch. Of course, The Winning Group does service these market through its incredibly successful Appliances Online venture, though this website and its physical outlets attract a significantly different customer profile.
By moving into Perth through acquisition, The Winning Group is able to take its share of the mining boom’s flow-on effect without hurting the overall make-up of the market. Another new entrant would have inevitably placed downward pressure on pricing while the Narta Christmas party would have been a little bit frostier considering the deleterious impact a standalone opening would have on Kitchen HQ’s business.