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
I read this year about how JB are still expanding. Which seems odd in this climate. Assume management still believe expanding is the way to go. They brought out Good Guys, and where I live. I can easily access JB and GG all within 10-20mins from my place. 4 stores. 2 JBs in large shopping centres. Which is ok. Not so sure about the separate suburban stores.
Still surprised JB are keeping their audio , video, gaming disk sections. ie CDs, DVDs, & Games disk. Wouldn't be surprised if they get rid of those as well like other chains. The pricing isn't really competitive compared to online.
Probably the only saving grace is that the stores are pseudo stock houses for their online sales which would help keep stock moving.
By the way the Gen Is and Millennials aren't bogged down by physical possessions compared to Gen X and earlier. They have digital music, video, & books. My son has hardly ever gone and brought those 3 physical items, unless he can't get a study book digitally. He doesn't watch TV. Now that's another interesting topic.
There is no talk of Recession but our large country town has lost 100's of small businesses in recent times and some large businesses. And Banks are not allowed to advertise foreclosures on domestic residences in case it starts a property collapse. What is happening in Australia?
I thought the results of the last election shows what's wrong with Australia.
It's everyone for themselves these days and we don't want to invest in our future at the expense of tax cuts, negative gearing & franking credits
defo cant mess with the seniors and their franking credits
Franking credits are awesome - and I'm far from being a senior
Get them working for you
Nope, it showed what's right about Australia - we dodged the big fat .357 socialist bullet that was heading for straight between our eyes
The people have most definitely spoken
There is talk of recession. Whether or not itll happen is another story.
Australia is already do close to a recession, the only thing keeping growth positive is population growth.
Correct!
Its all smoke and mirrors.
GDP per capita (per person) has been going backwards for years
It's already happening- 18 months + of negative car sales.
Safe journeys everyone
Ask the RBA !!!!
Interest rates just dropped from an all time low of 1.5% to a new all time low of 1.25% with 2 or 3 more cuts already on the table.That tells you a hell of a lot!
Interest rate cuts are our buffer to prop up the economy during a recession. The fact the RBA is using up our lifelines is indicative of where the RBA thinks we are heading in the next few years.
Have seen many Pizza Capers shutting down lately. Kind of sad as their pizza is pretty good. I think the franchisors have driven them into the ground.
I think the franchisors have driven them into the ground.
To honest, any small franchise system that is in the retail/food sector is at risk. I think a lot of perception out there is making people turn away from them both from a ownership perspective but also a consumer perception. Plus Fair Work, ATO, other government agencies are watching them very closely and gaining finance in the sector from the big 4 banks is a lot harder/expensive than it use to be.
The only food chains I'd invest in are unfortunately privately owned. Guzman Gomez in my eyes is the star food chain in Australia and I've been saying that since they had two stores in Sydney only. Just a great business (and great owner).
Had a Pizza Capers in my old suburb in Brisbane in 2007. The owner had lengthy battles with Pizza Capers HQ and got into the community newspaper. Don't think he liked the supply deals at the time.
True, I am from Brisbane myself. Recently went to Carseldine the other week only to find out the local shop had closed down. Quite sad, they were by far the best Pizza Capers store I had been to. Incredibly friendly staff, order was always correct and the pizza quality was always outstanding. Other stores I had been to were rubbish in comparison. Found out a Dominos store was opening up next door too which wouldn't help the situation.
Radio Rentals.
They are shutting down their stores, but me thinks it won't be long until they shutdown their website too.If you're talking about SA, didn't they just recently go broke? I don't know about the RR from the rest of Aus (Rent Low here?)
Oh didn't know it was only limited to SA. From their ads they're just closing down their store, their online stores will continue.
There marion store never had anyone in it.
There was one at Edwardstown/Melrose Park (now closed).
The reject shop.
They have lost the individuality as Kmart is just pretty similar now and on lower end there are plenty of $2'ish shops.Diaso next in line if they don't restructure.
They did recently introduce a new line of cards, super well priced for really nice cards for birthdays and weddings. But in saying that selling $1 cards probably won’t be the road to riches. But every time we have a work persons leaving or whatever birthday event I going there for cards is a steal compared to most places selling $6 hallmark, and much better than the really cheap $1 cards
Thanks, good tip! I hate paying $5 for a card
Daiso was good when it first came to australia but now its just clutter and miniso has taken over.
one things for sure: kmart aint going anywhere. that place is the bomb. can get everything there. good for basic clothes like socks, undies and t-shirts. i havent bought a brand name $70 t-shirt in years thanks to kmart. $4 plain white ftw
i do miss world 4 kids tho :(
I don't understand why everyone loves Kmart. Everytime I'm in there, everything is just so cheap and flimsy. Everything looks like it'll only last a few uses. Am I the only one that really dislikes the store?
In saying that, I must admit I haven't really looked at the clothes in Kmart.
I bought two pairs of KMart jeans a year ago: they're still perfect, colour fast, and look fine. $20.
I agree with you. I used to love kmart but realised now that their stuff like tops shrink in the washing, knits and fleece start peeling after a couple of washes and their shoes..ugh..kmarts good if you want to fill your house up with junk and call it decor.
i havent bought a brand name $70 t-shirt in years thanks to kmart
The fact that you used to might bring your OzBargain membership into question…
Unfortunately Kmart have cut Auto, paint and hardware.
Auto is limited pretty much to oil these days.Was a much better store when they had a full range of Auto, paint and hardware.
Now we have to go to Bunnings who have cornered the market for paint and hardware
I agree. I much preferred Kmart when it was a proper variety department store, now it's most just clothes, homewares, and toys. They've cut garden, hardware, paint, and massively downsized electronics.
I know it's made them much more profitable, but as a consumer, I don't feel like they're as good as they used to be.
Overall Wesfarmers is pooping over the Woolies group. Sure Kmart has embarrassing thin margins but Bunnings is a real cash cow and Officeworks as well on present time. They are still scared of Amazon and have been trying to offload Officeworks. Woolies actually had been ordered by the banks to shut 90 BigW stores but they try first with 30 to see if it helps.
Here’s hoping none. But if I could choose one just for Karma sake: Harvey Norman.
+1, I vote for Pedro!
Maybe not immediately next, but I feel Myer is inevitable. Stepping into a store is like visiting a museum. I'm starting to get the same vibe as to what Americans say about Sears stores.
They've been on the brink since the early 90's It's a miracle they've survived this long.
Yes. Myer is a relic stuck in the 1980s. It's just like walking into Sears or Macy's in the USA: there is no one there.
Myers share price says it all.
In a steady long term decline with the odd unfounded bounce of hope.
My prediction is franchisor Retail Food Group (think Gloria Jeans, Donut King,Brumby's, Michel's Patisserie, Crust). Share price has taken a dive from about $7 per share to 16 cents.
There has also been an inquiry and possible investigation (can't find the article I remember reading) into RFG's practices.
Edit: And a potential class action to top it off.
Just beat me to it
Anything under retail food group:
Donut King
Gloria Jean's
Brumby's
Pizza Capers
Michel's Patisserie
Crust Gourmet Pizza Barpieface.com.au was a similar train wreck.
Now United think they can revive it by turning all their stations into a Pie Face front. Unfortunately they're thermo nuclear expensive pies of pastry and not much else.
@Clear: Saw the United near me full of pies one day. Just wondered how the hell the expected to sell all those pies when I was the only one there.. not a very busy servo.
I did like their pies though
@Geoff-bargain: Me too. Theres still some piefaces at petrol stations and one at Southern cross train station
Crust seems to be doing ok
With a decline like that there is more to the RFG price then a delcine in retail sales…..
"Retail Food Group just posted a half year loss of $111.1 million………
Retail Food Group’s 73.4% drop in underlying profit was driven by a number of factors including ongoing difficult retail trading conditions, the cumulative impact of outlet closures, investment in restructuring activity, prevailing negative sentiment regards franchising, and declines in new store, resale and renewal activity."
Isn’t that last line amazing. Basically says churn is part of their business model.
Damn, read that so quick and thought you said Chum was part of their business model. lol
Michele and Glorias are viable, the other brands not so much. They have a lot of executives that are linked with the Hillsong church so are fanatical.
The company may go down but the food chains are brand names that people still go to, they can be sold to someone else to run.
Anaconda. Huge floor space. Huge range of merchandise. Hardly anyone in any of the stores when I (seldom) visit, except a lot of annoying young kids (staff) on the min. casual hourly rate. Maybe they sell more online, but then why have bricks and mortar?
I know a lot of different branded outdoor stores (like many other store types) have the same corporate owner, so strictly aren’t in real competition with each other, but just strategically placed. I don’t know how or if Anaconda fits into this scenario.
Owned by Spotlight Retail Group. Deep pockets I reckon, if they have kept it going this long, why stop now?
I have a family member that works for a company that sells shoes to Anaconda, container after container… insane volume and majority of high end shoes
I go there mainly to let my kids play hide and seek in the tents. There's no one on the floor to object, so its harmless fun.
There is a lot of competition in this area too - every suburb/town has 3-4 big box outdoor/camping/fishing stores
I’m surprised Aussie disposals isn’t mentioned.
Also Godfrey’s alaways looks empty in my local shopping centre.
I'm surprised Godfreys hasn't gone under yet. I've walked passed any open stores with no one in them.
Yes godfreys lol wtf how are they still around.
I had a chat to a Godfrey’s store owner recently. Not hugely busy but enough to keep the doors open and pay the bills and have a bit left over for fun. I think lots of bags and commercial sales help them but days are numbered surely.
I was in a Good Guys today, 2 Dyson and an LG vac were sold in about 2 minutes
From all the business mentioned, it sounds like all the stores In Westfield will go bankrupt.
Looks like Westfields might be finally going bankrupt !
This is why the Lowy family recently sold up and retired to Israel. I will follow their financial movements more than any other organisation in the world.
They will surely have to cut rents to try and keep their tenants above water. I feel so sorry for these soy sauce chicken joints that are paying over $2000 a square.
kinda of be sorry. They are adults and fully aware of what kind of operation Westfield runs
X fingers crossed X
Kogan (hopefully not telco bit).Thanks for the link.
Most of their physical product deals only make double-digits in voting. Cheap data is fine, selling sub-standard rubbish and giving customers the runaround? Not so much.most of amazon's posts are single or double digit up votes. Kogan DC Fan, or the Mechanical Keyboard or many gaming monitors come to mind with hundreds of votes. Shrugs, just wonder why so much hate
I'll be dancing a jig the day that smug bastard Ruslan has to close his site. God knows how many fair trade and ACCC complaints they really get.
I hope bigw stays, I like it.
"The Book Grocer" or some other book shop.
"The Book Grocer" in Melbourne CBD (Bourke St) has had 'closing down' sign in the window for the last few years … still there/will be there next year.
Yep I know lol. They offered me a membership once. I asked "why? Aren't you closing down?"
The guy replied "closing down for Christmas" lol"Closing down prices" - Made me do a double take too.
The Book Grocer on Elizabeth St IS closing down and has all books $3-5 instead of the usual $7
Aren't the Book Grocer a remainders book store?
Australia is slipping into recession!
The Reserve bank has openly admitted this by unexpectedly slashing interest rates to an all time low and suggesting 2 to 3 more cuts are on the table.
WOW. That is desperation!!!!!!!!!!!
This didnt help business confidence which has slipped even further.
Coles has announced that 450 jobs are disappearing in head office.
The evidence suggests that Retail is already in recession!
There will be many more store closures and cost cutting measures before the year is out.
Some of the cost cutting will be for some bricks and mortar retailers to transition further into ONLINE RETAILING in an effort to close marginal stores.
Interesting times ahead.
Dont know why you were down voted it is true retail is in a recession in Australia but most retail as said in another form is failing due to high wages and high cost of commercial leasing.
Rebel sport must be suspect.
Just noticed they still exist.
More staff than customers the last time I went in.Agreed, feels like a ghost town in there..
Yeah especially with Decathlon moving in. They are going to smash Rebel when they get known a bit better.
Decathlon does not sell any branded gears though, and there are many people who want (and are willing to pay) Nike and adidas. Rebel is also one of those stores where you go in trying to buy a cheap pair of runners, and the staff pushes you to buy that $200 GEL-Kayano instead which you obviously don't need.
Their sales have a heavy seasonality curve, much busier at Christmas time, school holidays and back to school when the weather is ok. The margins are quite healthy.
http://www.superretailgroup.com.au/about-us/brands/
proof that certain goods have dumb enough customers so one can actually run such a chain in Redneckistan….
I glanced into a best and less a few months ago. Looked like the 80’s all over again.
As manufacturing continued to dwindle in Australia there was the general feeling that retail, mining, and services would continue to make the economy grow. Well, mining is still healthy but the construction phase is broadly over. Services like education continue to do well but it's a fickle market based on overseas students. And retail, well, I'm not surprised retail is in recession. We simply have too many stores. We have become a nation of shopkeepers selling imported products. That won't end well.
The next wave of mining construction is coming up like a freight train - I work in the industry - project engineering design, and see what's in the pipeline. It won't be 2004-2011 all over again but it'll get close
Billions in tax deductible capital expenditure and depreciation with nil/delayed taxable profit but plenty of 24/7 FIFO construction workers taxable high income followed by wageless robot operators. Best profession to be a maintenance engineer.
Companies (all companies) investing in fixed assets can claim tax deductions - where's the problem? Chevron have spent $100 billion in WA, isn't it fair that they can deduct that against tax? They employ thousands of Australians on top dollar. Still plenty of jobs in mining - with growing demand for workers. Yes, some jobs are being automated out but other types of jobs are being maintained and created.
Any engineer is the best profession.
Agree Myer is an eye sore, but their online store is pretty good.
Not when they take over a fortnight to issue refunds due to failed online orders …
Target. Simply due to the massive drop in quality of their goods in recent years. It's pretty clear they are burning the Target brands reputation for quality to sell junk for higher profit, till inevitably, Target falls in a heap.
Really hope that Harvey Norman go bankrupt
why would u wish that upon anyone
Because Gerry lobbied for the removal of the $1000 gst free amount on imports
Because ppl are dumb and selfish. Mostly clueless
Gold Coast-based RFG is the country's biggest food franchise operator, whose brands include Donut King, Brumby's, Gloria Jean's, Pizza Capers, Crust Gourmet Pizzas and Michel's Patisserie.
They will go bust in the next 18 months IMHO.
Note already mentioned above. Agree with all the comments…
Yeah RFG are doomed thought they might bounce back but they looked f**ked
Miller's has a similar range and position to Williams, I think they will be ok as buying shoes online isn't for everyone.