After the flurries of the past few years, with the myriad collapses, takeovers, merges and acquisitions, 2014 proved to be a relatively quiet year for the appliance retail industry. In the past, stories about embezzlement at Clive Peeters, international woes at Harvey Norman, internal chicanery at Retravision and the rise of Leading Appliances have captured readers’ attention and propelled these in-depth pieces to the top of the charts.
This year, however, the industry has enjoyed a prosaic stability, with most of the interest and activity gravitating around The Winning Group and its charismatic leader John Winning. Through 2014, Winning managed to strengthen his burgeoning cult of personality by buying out Rick Hart’s Kitchen HQ, repeatedly refuting Rear Window’s Joe Aston, imparting his 50 pearls of business wisdom (or biz-whizz for short), winning a World Retail Award and, in the most Bransonesque move of his mightily impressive year and career, launching the Appliances Online Blimp. A more cynical scribe like UnderCurrent might prevision that in days to come, the moment an appliance retailer becomes too big for its boots, it is said to have ‘launched the blimp’. I would like to remind John that his #36 rule for living life is to not take it too seriously.
Elsewhere, there was change at the top for JB Hi-Fi, with Richard Murray taking the reins from Terry Smart. Not only did this afford an opportunity to use a ‘Richard the Third’ headline, it also provided a timely contrast to Good King Joffrey untimely demise. Meanwhile, praise be! Harvey Norman has had a good year! Well done to the management team at Harveys for righting the ship after a few stormy years and well done on the well-earned pay rises, even if those pesky shareholders weren’t too happy about it.
Down at The Good Guys, Andrew Muir was so busy accepting multiple awards for outstanding customer service that he temporarily forgot that his retail group doesn’t do public relations, so much so that The Good Guys now has a PR company that is sending out a steady stream of good news stories (and that’s full pun intention) for us to devour. We hope Muir never remembers his media-shy ways: so much more enjoyable to share stories of success than tales of woe.
Another quiet achiever through the year has been Betta Home Living. The Brisbane-based franchisor has really excelled with its regional focus and customer-service-centric proposition. Throw in a couple of really good brand campaigns in association with the Brisbane Heat team in the Big Bash League and a clean, uniform brand ethos and you have a winning formula. The industry scuttlebut surrounding Betta Home Living — and make of this what you will — is that Graeme Cunningham, the CEO who has done an outstanding job at the helm of Betta during a time of great challenges, is being groomed for bigger responsibility within the wider Narta group — the biggest responsibility of all — some say.
Appliance Retailer’s Top 10 Retail Stories of 2014
10. ‘Sound strategic decision-making’ behind 48.9 per cent jump in Harvey Norman profits (29 August 2014)
Harvey Norman today delivered strong financial results for full year ended 30 June 2014 “despite some short term weakness associated with the Federal Budget and a generally challenging retail environment,” chairman Gerry Harvey said.
Profitability improved across all of Harvey Norman’s operating segments leading to a net profit after tax (NPAT) of $211.70 million, a 48.9 per cent increase from $142.21 the year before.
9. The three big threats to another strong year of growth for Harvey Norman (2 October 2014)
Harvey Norman’s annual report to shareholders, released this week, outlines three major obstacles the retail giant has identified as being a potential threat to another strong year of sales and profit growth. The retailer, which operates the Harvey Norman, Domayne and Joyce Mayne retail brands and has 677 franchisees in Australia, as well as 82 company owned stores, along with overseas retail operations in Singapore, Ireland, the United Kingdom and Slovenia.
After his recent purchase of Kitchen HQ, CEO of the Winning Group, John Winning has spoken about a new entrepreneurial pursuit in the works, transforming his installation business Handy Crew into a logistics company to provide delivery services to non-competing businesses.
The Winning Group launched the Handy Crew installation company in June 2012 to offer delivery and professional custom installations.
A further four Harvey Norman franchisees have been fined by the Federal Court for misleading consumers over their guarantee rights, bringing the total to nine franchises that have been ordered to pay $234,000 between them after an ACCC investigation.
In December 2013, five Harvey Norman franchisees were fined a total of $148,000 after the ACCC brought action against the retailers for making “false or misleading representations to customers regarding consumer guarantee rights.”
The Australian response to the arrival of US homewares retailer Williams-Sonoma has exceeded the company’s expectations says Pennie Rende, general manager of Williams-Sonoma Australia.
Williams-Sonoma opened four new stores in Chatswood Chase shopping centre today —Williams-Sonoma, Pottery Barn, Pottery Barn Kids and West Elm — spread over two levels. Across the four brands, the stores offer a mix of cooking classes, design advice and children’s activities; something Rende says sets the business apart from its competitors.
Woolworths today revealed that its Masters business lost $176 million during the 2014 financial year, bringing its total loss for the past two financial years to just under $333 million. CEO Grant O’Brien said the supermarket giant’s venture into home improvement, in partnership with US retailer Lowe’s, will not meet forecasts and will not break even until at least the 2017 financial year.
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.
3. Oh the humanity! Appliances Online literally flying high on new blimp (5 November 2014)
Since embarking on its first major TV advertising campaign earlier this year, Appliances Online is continuing to lift its public profile with a newly acquired ‘Legendary Blimp’ recently making its first maiden flight from Riddells Creek Airfield in Victoria.
Built by the Van Wagner Airship Group, the dirigible is 39 metres long and 11 metres wide and is illuminated from inside by two 1,000-watt lightbulbs, making it visible at night. Appliances Online say it’s the only blimp currently flying in the Southern Hemisphere.
Selling appliances and kitchens together as a complete package is clearly a growth area, based on the successful launch of The Good Guys Kitchens as part of the Melbourne based retailer’s sponsorship of Channel Nine’s The Block.
The new venture sees The Good Guys’ team of expert designers visiting customers to specify and recommend new cabinetry and appliances. In a nice touch, The Good Guys’ website introduces the designers: there’s Thomas and Zachary in New South Wales; Alex and Keith in Queensland; and Elena and Nicole in Victoria.
…and the #1 Retail News story of 2014:
1. “I gave up the fight” — Why Designer Homeware is being liquidated (15 January 2014)
When Athan Papoulias closed his two Designer Homeware showrooms, in inner-city Camperdown and Chatswood on Sydney’s affluent middle north shore, for a Christmas break on 21 December 2013, he fully expected to reopen in the New Year.
Although turnover was down and debt was mounting, Papoulias was confident he could find the financial backing during this shutdown in order to open for business, as expected and advertised, on 2 January 2014.
Unfortunately for Papoulias and his staff, however, a liquidator was appointed instead.