RetailBiz Round Up for Wednesday 19 February 2014 – with Patrick Avenell
Today's ASX results are here
Dick Smith has started strongly as a publicly listed company, reporting sales of $637 million and a $41.7 million net profit for its first half of FY2014. Claire Reilly from AR takes up the story:
Measured against the company’s financial targets for the full year, made in last year’s prospectus, Dick Smith has reached 52 per cent of its sales goal for the year in the past 6 months, as well as 58 per cent of its earnings goal and 63 per cent of forecast profits. Today’s results are described as pro forma, meaning that while they’re an accurate indication of the company’s performance, they aren’t made up of previously listed figures (the company floated on the ASX mid-way through 1H2014 and does not have year-on-year listed results to compare).
Dick Smith further announced that it opened 46 new stores in the first half of the financial year, primarily in the second quarter, including 15 Dick Smith stores, 30 David Jones Electronics powered by Dick Smith shopfronts and 1 Move concept store. The brand also plans to open 11 additional stores in the second half of the financial year — 7 Dick Smith stores, 1 in David Jones and 3 Move stores.
The major driver here has been Dick Smith’s RBMAs with David Jones, first announced in August 2013. The partnership officially began on 1 October, and though Dick Smith has seen financial outlay with the investment in store refurbishment, rebranding and staff training, there is evidence that it has boosted the retailer’s overall performance.
For those that don’t speak the lingo, RMBA stands for ‘Retail Brand Management Agreement’.
Bronto Software, an American company that provides cloud-based marketing software to power email, mobile and social campaigns, has opened a Sydney office as it looks to expand its Australian business.
“The time to expand into Australia is right. The Australian e-commerce market is growing, and we already have a number of great Australian clients, including 2XU, Virgin Wines, Asics and O’Neill,” said Bronto CEO Joe Colopy. “This new office will help us to serve clients better, strengthen partner relationships and add to our global roster of commerce marketing customers.”
For those not in the know, 2XU stands for 'Human Performance. Multiplied.'.
SLI Systems has launched a new Learning Recommendations software program for online retailers. This software suggests products for web browsers to look at, based on sophisticated metrics, to enhance sales opportunities.
“In general, recommendations tools are shown to generate an average lift in revenue between 5 and 15 percent,” said SLI Systems VP of product management Blair Cassidy. “Yet, we find that retailers more often than not have failed to add these capabilities to their online stores.
“By building on our popular set of SaaS e-commerce offerings and taking the hard work out of retailers’ hands, we hope to bring the benefit of robust recommendations to the many sites that haven’t been able to take advantage of them to date.”
For those that don’t speak the lingo, SaaS stands for ‘Software as a Service’.
There were six Australian winners at the 2014 POPAI Global Marketing at Retail Awards, which were announced overnight in Germany:
Category: Food Retailers – Semi Permanent Category
Winner: ACTIVE DISPLAY GROUP for Retail Safari/P&G, Oral B Pro Health Sampling Table
Category: Convenience/Route Stores – Permanent
Winner: POP IMPACT Pty Ltd for Ferrero Australia, Kinderino Counter Display
Category: Professional Healthcare (Medical/ Pharmacy/Veterinary) – Permanent
Winner: SUMO VISUAL GROUP for Chemmart Pharmacy, Chemmart Natural Medicines Wall
Category: Home Entertainment, Telecommunications & Computer Retailers – Temporary
Winner: CHEIL AUSTRALIA for Samsung Electronics, Taking On Goliath
Category: Home Entertainment, Telecommunications & Computer Retailers – Permanent
Winner: CONVERT for Hewlett Packard Australia Pty Ltd, HP ePrint Units Live & Non Live
Category: Digital in Store Media Content
Winner: CHEIL AUSTRALIA for Samsung Electronics, Genuine Stopping Power
“The entries were evaluated on their design, engineering, shopper engagement, retail experience, brand performance and sales results,” said POPAI ANZ GM Philip Best.
“Once again, our entrants have demonstrated global leadership in translating strategic shopper marketing insights into effective and innovative solutions at the point of purchase. Congratulations to all our winning members.”
For those not in the know, POPAI stands for ‘Point of Purchase Advertising International’.
The publicly listed Super Retail Group, which administers Amart Sports, BCF, Goldcross Cycles, FCO, Ray’s Outdoors, Rebel, Supercheap Auto, Workout World and Super Retail Commercial, is looking for a new managing director of leisure retailing, following the retirement of Steve Doyle.
Joining Doyle in retirement is Graham Chad, who is being replaced as the GM of group logistics by Gary Carroll.
For those not in the know, BCF stands for ‘Boating Camping Fishing’ and FCO stands for ‘Fishing Camping Outdoors’.
Quote of the Day
“We continue to manage our existing store portfolio to ensure our locations are viable in the long term. Reductions in occupancy costs continue to be achieved as leases have been removed, and will continue to be a major focus going forward. We will close stores if appropriate terms are not achieved. We have closed one store during the period with a further four stores currently under negotiation [that] may close this half.”
Despite openiang 33 new stores during the first half of FY2014, The Reject Shop MD Chris Bryce maintained a pointed focus on tenancy costs during of flat like-for-like store sales growth. The Reject Shop had underlying EBITDA of $36.9 million from $385 million in sales.
For those not in the know, EBITDA stands for ‘Earnings Before Interest, Tax, Depreciation and Amortisation’.
Image of the Day
Trampoline Gelato, which has 12 franchises in Victoria and the Northern Territory, is running a clever promotion through its Facebook page and a bespoke voting app to choose its next flavour. It’s down to the final five pictured above.
For those not in the know, lemon sorbet is definitely the best iced treat.