By Claire Reilly
While news broke today that Retravision Southern has gone into administration, it is important to note that this does not mean the closure of Retravision stores all over Australia. While Retravision Southern is certainly in dire straits, the current structure of the Australian business should help to insulate many stores from immediate danger.
In 2006, Retravision’s NSW branch collapsed after it was forced to write off a series of bad debts. The store group was split into two separate sections at the Hunter region, with northern NSW stores joining Retravision Queensland and southern stores joining Retravision Victoria/Tasmania.
This division was kept and, until recently, Retravision stores across Australia operated under three different head offices, with the separate groups going by the names Retravision Western (Western Australia, South Australia and the Northern Territory), Retravision Northern (Queensland and northern NSW) and Retravision Southern (Victoria, Tasmania and southern NSW).
At the end of last year, the company announced that it would unify the three branches as a way of eradicating inefficiencies and cutting costs. This plan was fleshed out in the first months of this year, with the newly-announced CEO of the national group announcing that operations would now be based out of Perth and that the “unified approach [would] deliver real benefits for our suppliers and our store owners in general”.
With the collapse of Retravision Southern, that unification looks to be in serious doubt.
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The company structure
Unlike retail groups such as Harvey Norman and The Good Guys which operate under a more traditional franchise system, Retravision uses a member structure whereby individual stores are owned by individual proprietors. These smaller operators are then able to use the group buying power of the larger Retravision collective to negotiate cheaper wholesale prices from suppliers.
In many cases, these proprietors are Mum and Dad operators. In the words of Retravision’s well-known tagline, “the man that runs the store, owns the store”
Perhaps this system is best summarised by Retravision’s own Company Information brief on its website.
“Retravision has stores right across Australia, many in regional and country towns,” it reads. “Stores are privately owned and operated, backed by professional management at regional and national level.
“Retravision has three regional support offices based in QLD, VIC and WA – providing an understanding of the specific issues that each state faces along with local community requirements.
“The man that runs the store – owns the store. Stores are deeply involved in their local communities, supporting local clubs and organisations.”
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So which stores are affected?
In light of the fact that the merger of Retravision Southern, Northern and Western was not completed, only Retravision Southern stores are directly impacted by today’s news. These include all 68 stores in Victoria, all 11 stores in Tasmania, and 23 stores in the lower half of NSW.
The Retravision stores in NSW that form part of Retravision Southern and will be affected by today’s news are: Bathurst, Moruya, Finley, Condobolin, Cooma, Cootamundra, Deniliquin, Eden, Forbes, Griffith, Goulburn, Eastwood, Kingsford, Narooma, Orange, Parkes, Corowa, Rozelle, Springwood, Thornleigh, Tumut, Tura Beach and Yass.
In a statement released today, administrators KordaMentha said Retravision Southern is “an unlisted public company which employs approximately 35 personnel,” and “it should be noted that the appointment is NOT over the independent Retravision stores which continue to operate.”