We apologise for the delay in recipients receiving last weeks NIB, it was simply a matter of being let down by technology, and last weeks issue sitting unnoticed for three days in our server. There is much to be said for a good “postal service”.
We did however receive a lot of feedback in respect of last weeks issue and we think it’s appropriate to grant some time to this weeks issue on some of that feedback.
Last week we made a statement ” the current cycle has never been experienced since the Great Depression”. Correspondents made the point in reply that the 1987-1995 property slump was far more significant for NZ Property than the current downturn, quoting the BNZ collapse and sell off, and the Chase Corporation collapse, together with empty office buildings etc. Well hang on!!
We were around in that period and frankly we cannot recall it being as bad. We have an across the board impact currently that is not just Property related. Borrowing money for projects is difficult if not impossible.
In the early 1990’s this company was planning many shopping centres on behalf of clients who were able to fund. Not so today. Further there is a whole bunch of people who are currently unemployed, with no immediate hope of getting a job. Regrettably this is negative for consumers, and they are nervous, so they don’t spend, hence less money circulating. In our view therefore 1987-1995 was not this bad.
We also commented last week that aside from Westfield, Kiwi and AMP seemed to be reluctant to assist retailers with rental woes. There were a number of mutterings that came back to us that in fact Kiwi and AMP were also assisting traders.
Well this from a national retailer who wrote to us as a result of last weeks NIB “I am still being hiked with unrealistic rental increases at lease renewal time. They (Kiwi/AMP) still say other retailers are waiting to take your shop, if you don’t agree to the increases”. So there we are chaps, from the horses mouth!!
Maybe we are being a bit unfair but why don’t the respective property owners, whether we are right or wrong, turn the opportunity around? We still say there is an opportunity for some excitement to be created and it could come from the shopping centre owners.
Nothing will happen unless we make it happen!! What does that mean? Well, why don’t the respective owners promote a slightly different approach for the consumer, which will make a point of shopping difference and inject some life into the centres for the retailers?
As an example, did you know that roughly 26% of sales are achieved on weekends? Why not do something to attract shoppers during the week? We have an idea, would any of you like to take it up?
We cannot let this issue go without an observation about South Canterbury Finance. Look, we are not Einstein’s here, just simple people who provide excellent service to our clients. So can anybody tell us how a Finance company with very significant investments and owing investors $1.7 billion can have only a miserable $10 million in cash available at any one time!!
Further, how can the same company advertise in the country’s daily newspapers over the weekend just gone “invest with us today” secured debenture stock 8%!! Then you have investors still saying SCF are being treated harshly. Then there is a call on the Government Guarantee to prop up the company. Are we a country of misfits or what? How do you feel about your tax being used for this purpose?
Moving on, there are some rather interesting stories out there that have been overlooked. In Auckland, both Westgate Shopping Centre and Rialto Shopping Centre in Newmarket, and Fraser Cove in Tauranga are being “carved up” and portions by way of retail tenancies are under offer to investors. A good idea? Not in our opinion.
It merely is an opportunity for the owners to take their money out. Frankly we cringe at these arrangements and worry about the future for these properties as effective shopping centres. We cannot think of one centre that has successfully survived unit titling.
A range of retailers will release their end of year results in September. We have had a preliminary look and some results will surprise you in a positive form, others will be somewhat disappointing. Our view remains as it was six months ago. Profit may well be down for the year for some retailers, but at least it is a profit, lets hope the commentators give the results positive headlines, not negative.
The Reject Shop shares 2008-2010
The Reject Shop operates in the discount variety retail sector in Australia. They are the Australian equivalent of our red shed. Today, we will have a look at the two companies, their similarities and differences.
The Reject Shop reported $23.4 million (Australian) net profit after tax, for the full year 2010. This is a 22.9% increase on the year before. The Warehouse Group had reported net profit after tax of $85.2 million (NZ) for the full year 2009 (and awaiting 2010 results).
The Australian Red Sheds were able to open 27 new stores in this period, bringing the total stores across Australia to 196. The Warehouse currently has 86 stores throughout New Zealand. Despite the smaller number of stores, the Warehouse is doing better than the Reject Shop.
But the Reject shop is definitely leading in growth- there is a lot more expansion potential in Australia. The Reject Shop has also been experiencing continual growth in share prices since 2008, regardless of the economic downturn.
Retail News
Kikki.K Stationery winner of Entrepreneur Award
The Swedish entrepreneur Kristina Karlsson moved to Australia 13 years ago to pursue her fashion stationery brand.
Kikki.K is now a multi-million dollar business throughout Australia, New Zealand and Singapore. Kristina Karlsson received the 2010 Ernst & Young Entrepreneur award for her achievements.
(Source: for a full article on this story please goto www.insideretailing.com.au)
Postie Plus missed margin milestones for the year
Postie Plus Group’s sales have fallen 5.33 per cent in its fourth quarter, the same period as last year.
Postie Plus said the full-year profit would be slightly below last year’s result. Same-store sales for the year rose 3.5 per cent but fell 3.2 per cent in the last quarter. The rise in sales is comparable throughout a flat retail industry in New Zealand.
(Source: for a full article on this story please goto www.insideretailing.com.au)
http://www.insideretailing.com.au/Latest/tabid/53/ID/8967/Postie-Plus-reports-sales-slip.aspx
Farmers Department Store accused of stealing Wellington’s vintage clothing store’s name
Wellington vintage clothing storeowner Tannia Lee is wishing she had a trademark license to protect her brand ‘most wanted’ after seeing Farmers latest advertising campaign.
She thinks Farmers may have copied her branding and said it is a very similar hand painted look, and some of the catalogues are arranged the same as her logo.
Farmers CEO Rod McDermott said there inspiration was mainly from overseas and Farmers had no knowledge of Tannias store.
(Source: for a full article on this story please goto www.insideretailing.com.au)
http://www.insideretailing.com.au/Latest/tabid/53/ID/8962/Department-store-accused-of-stealing-trade-mark.aspx
‘The Base’ – American styled hybrid concept
The Base Shopping Centre in Hamilton has been recognised in Australia as one of the more ambitious retail projects that they have seen.
The ‘unusual’ aspect for developers over in Aussie is the open approach to mixing large and small middle market value, within a mix of enclosed and open format.
(Source: for a full article on this story please goto www.insideretailing.com.au)
http://www.insideretailing.com.au/Latest/tabid/53/ID/8961/The-Base-is-loaded.aspx
Fashion Retailer Gone Bust
Fashion design store Liz Michell Design Ltd has gone bust owing around $200,000.
Director Liz Mitchell who has made garments for celebrities throughout her career, is now back up and running after one of her other companies brought the crashing Liz Mitchell Design shortly before it going into voluntary liquidation.
(Source: for a full article on this story please goto www.nzherald.co.nz)
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10667973
