Next major Retailer to go bankrupt / close in Aus?

Dear OzBargain
I'm wondering if the community has any views on the next major retailer to go bankrupt or closes operations in Australia.
There has been a lot of coverage about BIG W store closures, toysrus, Roger David, Napolean Perdis etc.
I had a previous thread on here about being a retired Mystery Shopper.
Whilst I was working I did think that Dick Smith could potentially go bankrupt because of Rapid store expansion and a lot of customers inside the many stores that I attended.
My next prediction is JB Hi-Fi for a similar reason I see too many stores that cannibalize sales off each other. Why have two stores in the same suburb etc, Migration to streaming services also in major consoles in and skinny margins on TVs mobile phones etc.
I'm not trying to be a Doomsdayer here but maybe an opportunist as an ozbargainer. I kind of feel that David Jones and my is a very tired business model as well with too much real estate them from positions. Love to hear some thoughts.

Comments

  • +53 votes

    Not JB Hi-fi, it'll be a clothing store. Something like Just Jeans

  • +74 votes

    My guess is Myer. They're already closing down stores like Hornsby in NSW

  • +4 votes

    JB won't go anywhere anytime soon, even though i personally don't shop there

  • +36 votes

    EB Games. Their parent company Gamestop is in trouble over in the US. I can't see Gamestop lasting much longer and who knows what'll happen to EB then.

    • +2 votes

      I'd agree with that. Never see many customers in eb stores anymore.

    •  

      They seem a bit confused with their positioning of Zing in the same Shopping centres as Ebgames.. interesting thoughts.

      • +3 votes

        I have seen shopping centres where the stores are opposite each other (like Macquare Centre) or exist as one store (like under Myer in Sydney city).

        I can see that one is a game store, and the other is a pop culture paraphanalia store. And while there is an overlap in clientel, they don't want to merge the two brands, and want to give enough space for each set of merchandice.

        •  

          I find this interesting given that ThinkGeek is going to be merged back with GameStop. I'm wondering if that means that Zing will merge with EB at some point.

        •  

          Ironically, they don't give enough space at this rate.

          The average EB Games outlet has a quarter of the store dedicated to loot in general. It's usually combined and thrown in with all the games on their racks.

    • -15 votes

      Google Stadia is all set to change the way people buy games. I reckon EB is going to be struggling/closing stores by the end of 2020.

      • +53 votes

        Google Stadia will never take off in Australia until we start having 1st world internet instead of ADSL2+ speeds.

      • +20 votes

        Not while 3/4 of the country are stuck on copper wiring for the next 30+ years. The Liberals did the physical gaming stores and cinemas a massive favour.

        • -1 vote

          NBN will close shop with the arrival of 6G.

          • +1 vote

            @Ozpit: If wireless networks can provide 1tb plans within a reasonable price. Then yes

          • +7 votes

            @Ozpit: nbn has the capability to go faster. They’re just arrogantly waiting for competition from 5g… i’d go fixed internet anyday over wireless tbh.

          •  

            @Ozpit:

            NBN will close shop with the arrival of 6G.

            Said by someone who has never used latency-sensitive applications over a mobile broadband/fixed wireless connection. Real fibre (not Australian "I can't believe it's not fibre") is far cheaper to roll out and far more future-proof.

            Not to mention the fact that moving all of our fixed line Internet traffic into our barely-able-to-cope-with-voice-data-during-peak-times mobile infrastructure will literally cause it to fall over. Optus's network drops calls or fails to connect you like it's playing Russian roulette.

            This is Australia last time I checked. Even if we opted to roll out 5G nation-wide in place of fixed line services, we'll find a way to fck up our mobile internet infrastructure, don't you worry.

      • +5 votes

        The kinds of people who shop at EB won't have a clue as to what to do with Google Stadia.

        • +1 vote

          I doubt that, Google will make it very easy for the average person to use.

          • -1 vote

            @Vinodra: Then Google will shut it down or rebrand it with YouTube branding or some other stupid decision.

            Google doesn't exactly have a lot of good will and trust from people at the moment.

      • +6 votes

        I sincerely hope that google stadia is a complete failure. Moving to all digital is terrible for the consumer. No physical products = no ownership = barely any rights.

        • +3 votes

          I hate to break it to you but not only does having the discs mean nothing in terms of ownership becuase the underlying license can be revoked or tied to your machine so you have to buy it again if your computer dies but also it can double your downloads. This is becuase if you install without an internet connection, it can't check for updated versions so you end up downloading it twice or twice plus patches. The number of times I have had that happen with boxed software is quite frustrating.

          • +1 vote

            @Neverpayretail: Physical PC games don't mean anything. Console discs/cartridges you do own. This is why I avoid digital copies of console games.

            • +3 votes

              @FireRunner: No you don't own console games either. They are also license based you never own sotfware period and use of the software indicates your acceptance of TOS and other legal agreements. Both microsoft and Sony can prevent games being played on there consoles to quote from Microsofts Community Guidlines "We may permanently suspend a profile or device if we can no longer trust it due to a severe violation, or if our attempts to correct repeated negative behaviors are unsuccessful". This means they can brick your entire console so it won't play any games or with some games make it so it won't play that game anymore even with the disc in. Happily this can't be done to a PC i.e. the bricking to playing all games anyway.

              Now ther are advantages to discs such as convience if a game actually runs of the disc but legally you NEVER own the software on the disc thats always licensed for your use just like movies are. Legally the only thing you own is the disc and your license. The information on the disc is owned by the creators.

              • +3 votes

                @Neverpayretail: Yes, you technically don't own the game - just as you don't own the rights to a movie by purchasing a DVD - but having a physical copy includes much more rights.
                You make a point about the the console manufacturer disabling your console but this still doesn't affect your physical games. You can sell them or buy a new console and they will work. It's much less restrictive - which is my point.

                On the side, I don't think they are legally allowed to brick your console - the worst they can do is permanently ban it from accessing online services. I believe that's what your quote from the Microsoft means.

                •  

                  @FireRunner: I know for a fact Song does brick Playstations, its a software bricking but "Once a PlayStation system has been banned the decision is final and cannot be reversed." Its a banning of that specific console from operation. Most reports say its now a brick as far playing games on useful only for parts but other reports say games like unpatched mine craft still run so either theres different types of console bans or Sony has changed its methods sometime recently.

                  I know microsoft used to hardware ban consoles by detecting registration of specific parts particularly in modded consoles but I can't find current confirmation other that a report of a official statement (that I couldn't find) saying "microsoft does not kill swith consoles" but even if true it still doesn't mean they can't software ban a specific console.

                  Anyway it late and I need to go to bed. Still an interesting subject.

                  • +1 vote

                    @Neverpayretail: Sony do not, and have never, purposely bricked a console as a punishment. This has only happened by accident with firmware updates, however please feel free to post legitimate news sources of when this has occurred.

                    When Sony ban a Playstation, they are only blocking the PSN aspect of it which can still be bypassed anyway (Atleast with a PS3, unsure with a PS4). Just like Microsoft with the XB360 & the XBOne

          • -1 vote

            @Neverpayretail:

            the underlying license can be revoked or tied to your machine so you have to buy it again if your computer dies but also it can double your downloads. This is becuase if you install without an internet connection, it can't check for updated versions so you end up downloading it twice or twice plus patches.

            GOG.com

            Your argument is invalid.

            Their installers are 100% offline and do not require activation whatsoever. You can download them, make as many copies as you like and install them an unlimited amount of times on any PC. It's a perpetual licence, just like in the days of old.

            Obviously multiplayer games will require connecting to game servers and if they're no longer around, then that's no longer possible, but otherwise for predominantly single player games, GOG.com is the place to buy your games from if you actually want to own them.

            Steam, Origin and Uplay however, are simply software-as-a-service platforms dressed up with the illusion of ownership.

            • -1 vote

              @Amar89: @amar89

              Wrong With GOG you are still only buying a license to play the game AND the license is in many ways worse than a software developer like microsofts. Heck GOG just proves my point. Really the only benefit to GOG is the lack of DRM in some games.

              To access GOG games you must have a GOG Account and have to follow the agreement for any GoG services including games "If you materially breach this Agreement, we reserve the right to suspend or cancel your access to GOG services and GOG content."

              Gog Content is defined as "games, in-game content, virtual items or currency or GOG videos or other content or services which you can purchase or access via GOG services, we’ll just call them “GOG games” or “GOG videos” respectively and when we talk about them all together they are “GOG content”." This does include the account as well as the account is covered by the agreement.

              You must agree to any contracts with the developer as well as GOGs terms - "have to agree to additional contract terms with the developer/publisher of the game" both then have the right to deny you the right to play the game if you breach the agreements.

              You are forbidden to (list by no means exhuastive):
              "Don't do or say anything which is or may be considered racist, xenophobic, sexist, defamatory or otherwise offensive or illegal."
              Mod any GOG games
              Make any money from GOG games e.g. Youtube or streaming.
              No modifing code or any of the normal copyright issues that makes it clear you don't own the program.
              You must obey all region restrictions for games.

              Seriously this is the most oppressive contract I have ever seen simply becuase it is so broad they could literally terminate your access for almost any reason. The language in it is so broad you could drive a truck through it.

              To be clear this makes sense in many ways becuase as the document makes clear to get licenses that allow GOG to exist they have to protect the rights of the developers that give them the license. This is true of any intermediary service but it highlights the problem for consumers that any digital purchase means you own nothing. Becuase unless you created the code AND copyrighted it you NEVER own it you just license it. The license is not perpetual as you claim it is so easy to lose its crazy that anyone would ever buy from GOG.

              • +1 vote

                @Neverpayretail: Nothing you said negates the fact that once you buy a game on GOG.com and download the installer to your PC, GOG.com cannot revoke that installer's validity and prevent it from running, even if they cancel your account for some arbitrary breach of the GOG.com EULA.

                So yes, my point still stands. Once you buy it and download it, it really is yours forever.

                In a sea of only bad digital distribution platforms with heavy-handed EULAs and DRM, at least GOG.com does offer the possibility of offline installs and offline play that is truly offline, unlike Steam, Origin or Uplay, which cannot run in offline mode forever (because the cached tokens eventually expire) and which severely limit their functionality in offline mode.

                All of your Steam/Origin/Uplay games are tied to the existence of Valve, EA and Ubisoft as functioning corporations. If those corporations went bankrupt and the infrastructure serving those platforms couldn't be maintained (either temporarily or permanently) then you simply lose access to your games library.

                GOG.com could dissolve tomorrow and all of the installers I've downloaded for the games in my account would still work and the games would still play.

                That's the difference.

                Seriously this is the most oppressive contract I have ever seen simply becuase it is so broad they could literally terminate your access for almost any reason.

                You really don't know much about CD Projekt Red or the history of Steam do you know?

                The only digital distribution platforms to do exactly what you describe (terminating accounts on a whim) have been Valve, Blizzard and Origin.

                I've seen games literally disappear out of my Steam library before when Valve revoked users's rights to access them because give-away competitions exceeded their licensing agreements with publishers and developers, and had to renege on free copies.

                • -1 vote

                  @Amar89: You missed the point entirely DRM is irrelevant to this discussion the issue is ownership. Frankly GOG games have all the weaknesses of steam, uplay and all the rest and worse. How could it be worse?

                  "GOG.com could dissolve tomorrow and all of the installers I've downloaded for the games in my account would still work and the games would still play."

                  This is the weakness of GOG, you could still play them but you would have no legal right to do so - that would be piracy.

                  Why? Becuase of GOG ceased to exist all the agreements they negoiated would cease to exist, since agreements are based on the parties involved existing. To quote the agreement "GOG content is owned by its developers/publishers and licensed by us." So all the licenses they gained are revoked, the license you bought are no longer valid. If you are using a piece of software that previously was licensed but currently is not that is still piracy.

                  That plus the fact they can cancel your account based on the perception, it doesn't need to be proven reality, of wrong doing on your part("Don't do or say anything which is or may be considered") makes me wish I didn't have a GOG account. Plus the ban on modding etc. Unfortunately if you wait more than 30 days to complain you have accepted everything contained with in it.

                  Look I could go on dissecting this agreement but the simple fact is you can't have a license granted to you by someone without a license and if GOG goes belly up it won't have licenses so you will never be able to legally play the games even if you can install them.

                  So GOG has all the weaknesses of Steam and a few more plus an optional side of piracy if it goes belly up. Sounds great to me where do I sign up? Oh wait I already have… Sh!t

      •  

        Many gamers (including myself) are not sold on game-streaming.
        There was even some booing at Microsoft's Project xCloud at E3 this year.

    •  

      I'd say it's a decent likelihood, not sure how they still exist tbh.

    • +9 votes

      Eb games has the worst pricing of any games outlet… relying on idiots to give away their money lol

      • +2 votes

        Idiots that must have something right away and can't wait for it to ship.

      • +3 votes

        For everyday pricing but they do have the odd good sale or second hand item sometimes at ok price

      •  

        Their RRP's are horrid but I just get them to price match the cheapest in store (Usually JB or BigW) and I've never had an issue. I go to them out of loyalty but also convenience as they are the closest game store to the carpark lol

    •  

      EB Games only dedicate about 30% of their stores to games now. It's mostly 'toys'. I wonder how well they do?

      •  

        According to my mate, Zing brings in a lot of money. It's all official merch and has a high margin. He left last year though so unsure how it's going now

    • +3 votes

      Agree, I cant understand how they can get away with charging $99.99 for a video game when JB sells for $79 and sometimes $69, and amazon selling the same games for $68 with free express prime shipping. Then you go into EB and ask for a price match with JB Hi-Fi and they look at you like you just shot their dog

    •  

      I really hope they go out of business. I've been sold damaged and heavily worn discs as new MULTIPLE times and maybe about half of the time they look at me funny as to why I was so fussed. That's fraud. I don't need a store like this and hope they die asap.

      Even though they price match, I don't go there anymore because I'd rather give my business to those who offer lower prices and better services.

  • +1 vote

    target

    • +5 votes

      part of Wesfarmers with a secret "wire" to the US fed. They are laughing to see Big W suffer and ready to scavenge customers if they can.

    • +1 vote

      Yes target have really cut down their SKU count a lot..

    • +12 votes

      I think Target is a marginal business for Wesfarmers.

      Kmart is doing much better, they got a new CEO a few years ago who is buying the cheapest Chinese junk and consumers love it.

      • +2 votes

        Target will just be absorbed into Kmart or if there's both in a centre they'll close the smaller store. Pretty sure I read over a year ago they'd already started merging them.

        • +2 votes

          Agree with Target - they've always basically been an upmarket Kmart, but with Kmart's products improving (thanks to China manufacturing getting better?) and you essentially being able to get the same products at a lower price from Kmart, I can see them going in the next 5 years.

          • +1 vote

            @Chandler: Kmart, IKEA, and ALDI Special Buys judge markets very well.

            Whenever I go to ALDI there are always 10 doodads I want to buy that I didn't know I wanted before I entered the store.

            KMart has no mens clothing over 2XL. Their thongs are in the right sizes and available all year round, unlike BigW who have am occasional wall of thongs with all the main sizes sold out. Little things count.

          • +1 vote

            @Chandler: Kmart's products getting better? Are you kidding? I've seen the count of products and the quality both go dramatically down in the last few years. Use to be able to get light globes for Holden, Falcon and other common brands at my local. No longer.

            For some of the electronics it's a gamble as to whether it the product works at all out of the box. e.g. Had to go through 4 of their USB speakers with disco lights to get one that worked. The others had bits rattling around, wouldn't hold charge, and I can't remember the 3rd problem. Not the only time I've had a problem. If it's a known brand, your chances are the same as always but the cheap in house stuff is…unreliable. (I had 1 of 2 of their cheap educational programmable balancing robots also broken out of the box a year ago….and that was a brand name, but not a major brand…MiP from WowWee).

          •  

            @Chandler:

            Agree with Target - they've always basically been an upmarket Kmart,

            Target are an upmarket Kmart?

            They both look as sh*t as each other to be honest.

            Definitely a cut above The Reject Shop and Red Dot, but I can't really sort out Target, Kmart or BigW into any sort of hierarchy as they peddle the same crap at roughly the same prices.

            To me it goes:

            • Tier 1: David Jones, Myer.
            • Tier 2: Target, BigW, Kmart.
            • Tier 3: Red Dot, The Reject Shop, Price Savers, etc.
    • +1 vote

      Kind of disappointed as I liked their new direction/look they were going with the in-cafe stores, and I've always liked them for their business pants in particular, but I have to agree there.

  • +13 votes

    FWIW JB Hi-Fi has a market cap. of over $3billion so I cannot see it going anywhere soon

    • +3 votes

      JB is profitable & safe.

    • +1 vote

      FWIW… It's not worth much. Market cap doesn't necessarily have any relationship with the underlying value.

      That said, they do seem to be doing a decent job at retail - I think Myer and DJs are in far more trouble.

      • +1 vote

        @Ely "It's not worth much"

        They paid dividends of $1.31 a share recently on $230m profit. It's worth plenty in this market and is indicative of good growth in a stagnant economy

        • +1 vote

          $230m profit

          Relevant.

          market cap. of over $3billion

          Irrelevant.

          •  

            @ely: Thanks Ely- They also have a significant risk with the potential aging of inventory. With such a 'wide' SKU count and a high number of stores, a write down of $500m of stock could happen!

  • +3 votes

    Women still depend on brick stores they like to try and see them on mirror before buying clothes

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