In some ways the last week could be the beginning of the end for the bad news. If you can make sense of that opening sentence, what we are saying is that the bad news must almost be at an end! The media generally undertook some excellent reporting on Strategic Finance, various frozen funds, and other finance companies, and in general were able to put together a network of involvement from various individuals who were involved as Directors in the various organisations.
It couldn’t have been easy identifying the various levels of shareholding and networks that were interrelated. It will now be a matter of time while the dust settles, as to how various investors fair from the tangle of poor investment decisions that were made, and the inevitable loss of investment funds for so many individuals.
Like it or not, those of us unfortunately caught up in the myriad of the financial debacle that has occurred over recent times, simply must pick ourselves up and make a new start. Difficult as that is there is no option. We have all been caught in some way or another, few have benefited from the meltdown, and despite being angry over the economic decline, a new start is best. What we can do is learn from the mistakes and make sure they don’t happen again.
We believe that the irony of the economic collapse is the realisation that the various Directors may well have had a level of skill in economics, but lacked the ability to make sensible judgement in respect of property issues. At the risk of repeating ourselves, why would anybody loan money to a project without having a high level of leasing commitment, and without a level of financial security that could be double tested?
So there we are, in our view the bad news is over, lets move on.
NZRPG (New Zealand Retail Property Group), did manage to sell $13 million worth of property through its auction process in both Westgate (Auckland) and Fraser Cove(Tauranga). Probably not ideal for the owners, but an indication that there are buyers out there for quality retail property opportunities.
The fact that 31 of 46 properties were sold at Pegasus Town Centre, is also an indicator that buyers are still about, and lets not forget this was bare land for residential development. This result gained little media coverage. Kiwi Income is about to open their excellent new extensions at the Plaza in Palmerston North, which incorporates a new 2 level Farmers Department Store.
Kathmandu also showed pretty good revenue results for the six months to January 2010 with revenue of $106.6 million compared to $83.6 million for the same period 09. Postie Plus also significantly improved its performance with a significant jump in sales. So all the good news was unfortunately forgotten by most over the last week.
We at RCG don’t “blow our own Trumpet” through the News in Brief, we prefer to focus on retail and property activity that will be of interest to all. However, we are very active in all retail categories from fashion to food to DIY to education and we also have a number of new development projects on for clients that will soon be realised.
Our focus remains on our key disciplines of Retail and Property Design, Architecture, Planning, Economic Analysis, and Property. We regularly receive enquiries from Retailers, prospective investors, City Councils etc and that level of activity continues to increase. This remains a further indicator that the market is improving.
On a final note, in the next week, there will be the regular annual commentary from various commentators and NZ Retail as to the desire by some to open on Good Friday and other days in the year when stores are required by law to remain closed. Our opinion in respect of this is pretty straight forward, and effectively one of economics. Since the early 1980s, our retail trading hours have been deregulated to the point where if you really want to you can buy something 24/7. As an example, you can go on Trade Me on Good Friday, and buy what you like!!
If shops open on Good Friday, sure people will visit and spend, if their not open then people will spend and buy the following day or the day after etc, in fact Retailers use the closure of Christmas Day as a sales motivator for consumers to shop on Boxing Day. The final point on this issue which is constantly missed, is the fact that a significant number of retailers in such places as Mount Maunganui, Tauranga, Queenstown, Remuera (yes Remuera, that’s in Auckland), Newmarket, Christchurch CBD, Dunedin CBD, Hamilton CBD, fail to open when they are entitled to e.g. Sundays and normal public holidays.
Therefore they are not taking advantage of the normal shopping hours they are entitled to open!! The NZ Retail Association should do a survey on the number of stores NOT OPEN when they are entitled to, we are sure they would find the results fascinating.
Kathmandu Shares 2009-2010
Kathmandu is a specialist in clothing and equipment for travel and adventure in New Zealand and Australia. They have released their first half-year results last week since entry into the stock market, and their performance has been excellent. Christmas sales had been strong and sales were up 24.9% to $42.8 million in New Zealand, EBITDA was up 83.8% to $8.8 million.
These figures show that Kathmandu’s “store rollout programme” have been successful. They now have two new stores in Timaru and Onehunga and plan on 3 more stores in Hastings, Gisborne and Tauranga by the end of this year. With share prices soaring after this release, investors can now rest assured and look forward to the next half-year results.
Latest NZ Retail News
Hoyts snaps up NZ cinemas
Private equity controlled Hoyts Group has acquired Auckland-based Berkeley Cinema Group from Everard Entertainment for an undisclosed price.
Berkeley Cinema Group is New Zealand’s fourth largest cinema circuit and will give Hoyts a greater presence in the market, Hoyts chief executive Delfin Fernandez said.
(Source: www.insideretailing.co.au)
Retail marketer honored
Retail marketing consultancy IdeaWorks has been named as one of the world’s most effective rebrand design companies at the sixth annual ReBrand 100 Global Awards, run out of New York.
ReBrand 100 is the highest recognition for brand rebuilding and redesign in the business arena, and is the only global, juried program of its kind.
(Source: www.insideretailing.co.au)
Bankruptcy taunts video chain
A leading video rental chain is struggling to keep afloat and says it may be forced to declare bankruptcy.
Shares in he heavily indebted US based movie rental chain Blockbuster plunged nearly 30 per cent on Wednesday.
(Source: www.insideretailing.co.au)
NZ optimism waning
Rising petrol prices, higher mortgage rates, falling house prices and worsening unemployment are knocking back consumer confidence.
The Westpac McDermott Miller Consumer Confidence Index fell slightly in the March 2010 quarter, to 114.7 from 116.9.
(Source: www.insideretailing.co.au)
Brand merger creates global giant
Two of the world’s biggest apparel brands are to be united under one owner in a $A3.4 billion deal sealed overnight.
Clothing maker Phillips-Van Heusen said on Monday it had agreed to buy Tommy Hilfiger in a cash-and-stock deal valued at about $US3 billion ($A3.27 billion) that will put the designer name under the same ownership as Calvin Klein.
(Source: www.insideretailing.co.au)
Kathmandu shines in ho hum NZ sharemarket
Kathmandu shares rose 7c to a new high in early trading on the New Zealand sharemarket, on top of a 19c gain yesterday after it reported its first interim result since being floated last November.
The 3 per cent gain in the outdoor clothing and equipment retailer took the shares to a new high of $2.45, but was one of few interesting developments on a generally flat market.
(Source: NZ Herald)
Playboy store goes bust
With his Playboy mansion and Bunnies on tap, Hugh Hefner must be the envy of millions of men around the world.
But the chance to buy into his luxury lifestyle failed to arouse sustained interest in New Zealand and Auckland’s much-hyped Playboy concept store has closed after less than three years.
(Source: NZ Herald)
Last Kiwi-owned cinema chain sells up
Another New Zealand cinema exhibitor is headed for the exit door.
New Zealand cinema exhibitor Barrie Everard is selling the Berkeley Cinema chain to the Hoyts Corporation.
The sale of the 21 screens at four multiplexes boosts Hoyts’ flagging profile in Auckland.
(Source: NZ Herald)
NZ slow to embrace wonders of 3D
Hollywood movie distributors are hoping Hoyts’ purchase of Berkeley Cinemas will hurry up the rollout of 3D.
After the success of Avatar, there has been a big global push to make cinemas 3D-capable and Hoyts has been active in that shift across the Tasman.
(Source: NZ Herald)
