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.
Next major Retailer to go bankrupt / close in Aus?
Last edited 15/06/2019 - 16:59
Comments
Reject stores are in serious hot water! Too many bottom end feeders!
Yes they are in big trouble apparently
yea not looking great.
Kmart is killing the reject/bargain type stores with their 80% private label products but still with Kmart returns policies that the smaller chains can't match.
Dollar stores have been in trouble since internet shopping IMO. Why go to an actual store when you can get the same junk on ebay, shipped to your house for a dollar.
impulse buys - stuff you'd never buy but see at $2, that'll keep you busy for the rest of the afternoon going home
@juki: Also a lot of these smaller dollar stores are like franchises. They're repeatedly bought and sold with certain ethnic communities for visa purposes.
@HeyThereJim: should that matter to me? I'm happy to find those shops when i need them. Also in the few i go to it has always been the same people for years (not quite decades)
@juki: It shouldn't really be a significant factor. It does however suggest that there is a reason that a lot of these stores are being propped up and kept open for other purposes. If they stock what you want at a price that's reasonable and you're happy with the service then that's all that really matters.
Absolutely. Reject Shop is circling the drain. The CEO will come out with the same lame excuses of 'retail sector confidence' and other such nonsense, but truth is KMart is killing it and Daiso is a much better and higher quality '$2' store.
Daiso is one example of Japanese retail finally arriving in Australia and teaching the overpriced junk stores that we’ve had to put up with a lesson.
Daiso at the local Westfield closed earlier this year after being there for a number of years. Probably not the profitable lesson for Australian retail.
@doowhydiddi: I don't like Daiso… for $2.80 there's a lot of crap that would be much much cheaper for shipping included.
Wonders why Daiso stuff is like the equivalent of $1.80 in Asian countries…
Reject Shop have only themselves to blame. They've killed themselves with high staff turnover in management and new corporate hires trying to implement change to put 'their' mark on things ignore market feedback and try to do it their way to look good. Every time it happens it costs them in time and money, the new hires move on, rinse and repeat. It's been like that for at least the last 6 years. I'm surprised they're not dead already.
Last time I looked at their financial statements they were doing pretty well infact. It was about a year ago.
The share price was $14.77 in 2016. It's now just over $2. The business is still making a small profit but the trajectory is a one way downhill slide.
You can go to Kmart can get matching plates & cups in contemporary designs for $1. And you can buy more next time you visit.
Reject stores are being made redundant.
All the small fashion retailers still left, i.e. Portmans, Suzanne, Jay Jays, yd., and Jeanswest. Between Asos, upmarketed Kmart/Target, and multionational fast fashion (H&M, Zara, Uniqlo), there's so little market share left.
Definitely more pain ahead for these retailers.
None of them.
Doubtful. All have solid, multi-billion dollar revenue. The only multinational fast fashion chain that exited Australia was Topshop but that was a local franchise selling off-season product, mostly within Myer concessions (itself on death row).
and we’re all the better for it. I’d say all of those stores are more “fast fashion” than what H&M, Zara and especially Uniqlo are. Quality, design and price are all better at these three store.
I have no idea how Country Road is surving, especially considering some of the retail spaces they occupy.
H&M definitely isn't quality. Its cheap and lasts a short time. Haven't tried Zara or Uniqlo.
Zara is much the same. They make stuff that looks good for a few washes and wears but doesn't last. Threadbare fabrics, piss-poor stitching strength and prints that rub off in no time.
The only thing Zara have going for them is they have solid, creative, modern designs and release new lines endlessly, literally every month, so there really is something to appeal to everyone.
H&M quality is woeful and is known for fast fashion.
Country road which is with witchery and seed has very good quality clothing for their mid range pricing of clothing e.g. saba, sportscraft, marcs, ted baker. They are doing fine since they are expanding at chadstone and a few other places and sell within DJ.Yes, perhaps H and M, but Uniqlo is far better quality than Country Road, at least in terms of men’s clothing. CR is horribly overpriced and only justified at sales. I don’t think they’ll adapt to the younger generation who will be accustomed to places like Uniqlo or slightly higher end designer gear, and won’t last as a result.
@The Almighty Dollar: Their range is minimal and same stuff all year round. You cant expect to wear puffer jackets, thin knits and plain tshirts all the time and to work. Yes it appeals to younger generations as its cheaper but quality is subpar. Country road isnt for the younger demographic, they are for the mid to late 20s upwards and you cant compare if they are for different markets.
@Milk tea: Mid to late 20s is a younger demographic ;)
As a late 30something that just wants unbranded, functional, and reasonably priced clothing… Uniqlo is 90%+ of my wardrobe.
Reasonably certain that I've never been into a CR store (only lived in AU for 11 years).
@ely: Uniqlo is good for casualwear but CR is for businesswear as well as casual so its hard to compare the 2 at all. If CR is in trouble then witchery and seed would be too but none of them are and juat keep expanding
Asos isn’t Aussie though
Most of those companies aren't Aussie. You don't have to be an Australian company to affect local retail.
Driving down Bridge Rd recently, where I don't go through regularly can definitely agree with you. These streets where those small local clothing shops usually trade are just getting bare.
Bigger retailers and the internet have killed them off.
a lot of customers inside the many stores that I attended.
Why is this a negative?
Sorry I had a typo.. not a lot of customers..
Using my phone lol
The Bad Guys and Hardly Normal?
Gerry is here to stay
went to harvey norman the other day and it was surprisingly busy. lots of floor staff too. cant say the same for myers tho. i think they can get away with 3 floor staff for an entire 4 story building sometimes.
Except for just one time, i’ve had pleasant experience in general at HN. Most recent being a price match for ebay deal including shipping thats available for ebay plus members. I was really surprised.
He’d most likely try to take our internet down with him, if he hasn’t already…
In fairness I think they’ve adapted well. I find their staff a bit more knowledgeable and customer focused than other stores, and they offer some good deals on occasion, which they weren’t known to do a few years ago.
HN allegedly make more money from their property empire than their retail stores.
Same goes for Maccas and Caltex
@mousie: Tough decade to be a franchisee.
I pretty much know the next major retailer that will enter administration shortly but I can't post here or I'll risk being doxxed.
@Typical16-bitEnjoyer: Common..Give us some hint to figure it out so that OzBargainers can use their gift cards in time.
@Danger: Just spend all your gift cards now. They're basically a scam with an (albeit longer now) expiry date.
The Good Guys are part of JB, so I'm sure they can probably absorb a fair bit of pain before it goes under.
Would be surprised if HN went under too.
I wish for Hardly anyway
JB owns GG.
We aren't going anywhere. You might as well give me your wallet now.
Ted's camera?
Why?
I have no idea how they perform financially but they are so overpriced compared to other retailers so it wouldn't shock me.
They are like the EB Games of the camera market.
Every time I go into Teds, there’s no prices on their lenses or bodies.
I turn around and walk out.
Optus for the Razer phone 2 muck up
Just look out for whoever is having Dick smith type sales / gift card promotions.
I wish Ben & Jerry's to close down ASAP! I am happy to forgo $14 for this happening.
Why.. don't like free cones?
I tried them in the US and they were awful. Icy crap, not enough creamy goodness. Avoided them here assuming that they were the same. Are they, or did they adapt to the local market?
No they are imported as is and wholly owned by Unilever. Ex US
Try them again. Seriously. Everything in America tastes sh*t because their entire food chain over there contains very little real food, so maybe the stuff produced for overseas markets is actually different.
Have a tub of Phish Food, Karamel Sutra or Choc Fudge Brownie and then tell me you think they're not the best ice cream around. Ben & Jerry's don't aerate their ice creams unlike other brands.
They beat the sh*t out of Peters, Streets, Cornetto or any other local brands.
@Gnostikos: mousie above reports that they're imported as is, so I don't hold out much hope. Agreed that most local icecream is pretty crap too, but I do like Connoisseur (Peters brand, I think?) - certainly far better than B&J was in the US. A friend went through at one point and compared weight / volume and concluded that 1L Connoisseur was the best value for money available on the shelves at that point in time (that was ~2008 though, may have changed)!
I'm curious about the passionate B&J fans negging me above though, why?
100% agree.
I've also had friends work for them and they've been shafted ridiculously.
I can't justify their ice creams and even when I do crave gourmet ice cream, I try Lygon St.
JB is like Best Buy
They survived the e-shopping and are here to stay
City Beach is one for me not already mentioned. Constant sales repeated and extended and they've also done the discounted gift card promos.
Their online site is popular so maybe theyll just move online?
My guess is one of the jewellers, like Michael hill or shiels, maybe not close completely, more like Colorado, become online only.
Michael hill is pretty strong I think. The margins on their low quality Diamonds stock are really quite disgusting. The realisable value on their rings is typically 1/3 of their list price.
Try 1/10
Michael Hill has a "formula" of physically small stores and small merchandise, no "big" items like clocks, and home brands made in China. They do well in the engagement ring/wedding ring sector.
Has Colorado done ok since going online only? I regularly shipped at Jag but haven't since they went online only.
My predictions:
- Big W will be closed during the next 3 years by Brad Banducci following a failed sale attempt.
- Myer is at high risk
- Early Settler
I was telling people from when it opened that I thought Debenhams would go out of business quickly in Australia. I haven't look at the media on retail for over 9 months now but looks like that came to fruition (as well as the UK businesses) going under recently:
https://www.afr.com/business/retail/debenhams-collins-street…
So now I am out of dead set going out of business retailers that people would be surprised at. The big one that people have mentioned here is Myer, it was pretty close to being a desperate situation over 9 months ago. I think it could end up being a 6 or 7 store Sydney/Melbourne/Perth/Brisbane/Canberra kind of deal if they don't sort it out.
There are a few businesses I don't get the value proposition for customers anymore:
Best n Less is one, I just don't see why anyone would want to shop there where the known lines they do stock are elsewhere, the cheap stuff they have is pretty much on par with the low end Kmart stuff, just nothing separating them from other medium/big box retailers. They may be well capitalized though, I've never looked into them.
Aquila is another, high priced shoes which quality wise is not that much of a step above other men's shoe stores that do regular discounting (more so at the higher end of the discount men's stores). I don't find the stores inviting to shop in, the customer service is indifferent and the footprint of these businesses is pretty large so the lease costs must be high (again I've never studied their financials and if they are privately owned might have deep pockets). Again, maybe the average Australian does go there and I'm missing something, but again I just don't see the compelling reason to shop there.
Valentino: I struggle to see the Value Prop for a lot of high end stores personally, but from a retail perspective, these guys have only entered the market recently in Australia and I think they really struggle for business. Namely because the stock they sold here (at least when they opened) was at least a year behind what is being sold elsewhere in the world (almost making them an "outlet" store) and the customer service is very average for an upmarket store. I think these guys globally are much better capitalized than they previously were, so perhaps it won't be an issue not selling anything in Australia in their couple of tiny stores.
I could go on with a few other names but I should stop. Australia is definitely an interesting place to run a retailer. I am always super impressed when I new ones pop up that aren't global chains and do really well!
I don't get why Debenhams exists in Australia. Most of the brands they sell like Calvin Klein, Veronika Maine and Tom Ford, you can get at Myer and DJs.
Exactly. Plus the location they had was probably the worst place you could have it. I think the mall that Debenhams was anchoring will probably go under or be sold at fire sale too!
Love the detail in your response Serpserpserp. Thanks mate.
+1 on Aquila. They are in that awkward price point. Too expensive for a cheap shoe, not high enough quality for an expensive shoe.
Maybe the profit margins on whatever they have actually sold will save them?! Those shoes are really poorly made imo.
Domayne? it is basically selling the same stuff as Harvey Norman but with a higher price tag (it is own/run by Gerry's wife I think?), everytime I walked past one, it is a complete ghost town (even during the EOFY and X'mas sales)
I have no idea what position Domayne is trying to fill either. I remember Clive Peters went under about 7 years ago. Agree that there is so much duplication with Harvey's and they are often located next to each other..
I have no idea what position Domayne is trying to fill either.
iirc, in some interview years ago, Gerry said that Domayne is/was going for the section of the market "who would rather be dead then to be seen inside a Harvey Norman store".
They just opened a new one ~ 4 - 5 months ago next to the Harvey Norman here in Darwin. Is it common for them to be collocated? I don't get out much :)
Even if Domayne makes a loss, that's a good investment for Gerry as it keeps his wife busy and out of his business.
His wife has been the CEO of Harvey Norman for 20 years.
Katie is turning the pages! Her Yobo Gerry is doing the smiling while her cash pile is enormous!
Katie has been the brains behind the turn around in the business. Gerry is too busy with his horses to care.
Really? Every single time I've looked at something from Harvey Norman and Domayne, their pricing has been identical. Same with Joyce Mayne, and Gerry owns all of them.
ok, maybe things has changed, last time I looked at time (years ago I will admit), Domayne was usually more expensive.
Peter Alexander. For sure the clothing market is very difficult. I do buy from PA, but only when on sale as they do have some cool sleepware. The way people are now its just to get the cheapest clothes possible at Kmart or the like.
Agree. At my point in life I have 5x business shirts, 2x suits and 2x quality shoes for work. Usually 1x smart casual combo for nights out and the rest is Kmart, Target or whatever is cheapest.
I certainly don’t have enough disposable income to consider any other stores. If my clothing purchases are common, retail is in trouble.
Have a look at Marks & Spencer online. Fairly good quality, consistent sizing and reasonably priced (especially when they have one of their regular sales), prices in AUD and free delivery to Australia (usually less than a week)
Shirts are CT Shirts, only buy when 3 for $99. Suits usually Van Huesen ( not amazing but good enough for my needs) at outlet, 2 for $500 approx. undies, socks and basics Kmart. My splurge is Loake shoes for work (im too poor to afford to buy cheap shoes) and they need to look good and be comfortable. Everyone notices shoes! (Get the right deal and they’re almost cheaper than some aforementioned cheap brands)
Jeans are $49 target which surprisingly last better that expensive levis i used to buy.
The suit jackets are versatile and go well with casual as well.
I’ll def check out M&S.
Don't knock Costco - they have some random brands and had great CK shirts / Van Hussein for about 30-40 bucks from memory. The nautica polos are OK too for about 28
If my clothing purchases are common, retail is in trouble.
They aren't the average though.
Peter Alexander… I do buy from PA, but only when on sale as they do have some cool sleepware.
A lot of people probably do this too. I cant think of another sleepware retailer that they have to compete with though. They do decent quality stuff (although on the decline).
Nop. They are under the just group and ladies flock their stores when theres a sale.
All the chains that are mentioned as having store closures etc. are unlikely (IMO) to go under. There is still a huge amount of value in brands like Myer, and rationalisation and restructuring is the sign of a business that is at least aware of its problems.
Personally some more minor fashion brands probably carry the biggest risk. Aquila was mentioned above - that would be a candidate. I don't see what it offers a customer and if the answer is to put stores as many places as possible to increase foot traffic, well that is a recipe for disaster as costs ramp up.
Fashion stores like Miller's, ones that exist in random shopping centres around the country…my money would be on them. Whether that would be considered a major retailer though…Reject Shop looks to be in trouble. Again, expansion seems to have hurt them.
Maybe a formalwear chain. Stores like MJ Bale, Charles Tyrwhitt and TM Lewin have all invaded Australia in the last few years, how stores like Peter Jackson, Stafford Ellinson, Tony Barlow keep it going with the retail presence…I have to believe they'd be starting to struggle and would have problems if the economy slowed more.
EB Games, I can see them surviving even if the parent company has issues. They have a compelling position being the only dedicated games retailer in the country, as long as they keep that identity they will still be relevant & strong in the sector. The digital future is not coming as quickly or forcefully as people predict, in my opinion. Not saying their stores will all remain open (let's be honest they have a lot of them), but can't see them disappearing. Especially if Target & BigW get rid of their gaming departments (which I hope does not happen - but been an ongoing rumour for years).
JB is an interesting one. But they went and bought their biggest competitor, so while they are in a way cannibalising sales off each other, they have maintained the difference in product ranges and as much as they may be cannibalising off each other, there is Harvey Norman & the online presence of AO, VideoPro, Amazon etc which provide a healthy market. And even if the economy does slow, consumer entertainment is such a main stay of our lives….discretionary spending will drop, but given how relatively cheap streaming services are, IMO people will stay at home a lot more than they used to when money became tight.
Also men.