The Adidas Debacle
Much of the past week or so the focus has been on the Adidas debacle and its ability to handle its own public relations. Ironically this debate was interrupted by the London riots (and elsewhere), which stunned most of us. We believe there is a connection between the two issues. How so you may ask?
First off, the cost of the All Black jersey is an appalling price. If you want one of these then make the decision and buy it. Effectively it is a fashion item, but most of us with more brains would hop along to The Warehouse and buy a similar Jersey for $39. The benefit of your purchase is that you are supporting a New Zealand company and you will get more “bang for your buck”. Frankly we think anybody spending $220 on an All Black jersey must have more money than brains.
The London Riots
So how is this “connected” to the London riots? Well there were no brains evident in the rioters, but their fashion statement was the “hoodie”. Isn’t it about time that this form of dress was either banned or at best taken out of the production run of apparel manufacturers? How many of you wear one? And why is one worn both in hot and cold weather, what’s the purpose? Ban them and save everybody a lot of unnecessary grief.
Consumer Awareness
The common theme however of both scenarios was the impact of social media and how it affected people’s activities and their choice. Five years ago we would not have been aware of the global purchase and pricing of a Rugby Jersey nor would we have been able to communicate to a large audience and invite them to gather as was the case in London. Both scenarios demonstrated to us the impact that this form of communication is having in our daily lives.
If we don’t engage with it, it will leave us floundering in its wake. Incidentally, one of our readers living in Chelsea, London saw smashed windows in upmarket stores and retailers reducing their window displays in the evening or blanking out the windows in an attempt to lower the attraction levels. So lets conclude on this subject by banning “hoodies” either for sale by retailers or worn by consumers. How many of you agree?
The NZ Retail Scene
Meantime what else happened in the past week that is worthy of consideration. We remain confused by the lethargic NZ Retail scene. The lack of support to the NZ Retailers association is nothing short of amazing. The AGM in Auckland attracted about 50 people, and this is a group that has 5000 members. That’s a mere 1% of members attending!! Is this an indication that every retailer is happy, or are they too fed up with the market and have lost interest? Two members of the association were made life members at the meeting, Bill Wallace (Formerly Hannah’s, Wellington) and Philip Richards (Ballantynes, Christchurch), two serious retailers with a breadth of experience, both of whom richly deserved the accolade, and it was a pity there were not more people present to acknowledge their efforts.
For all that, some retailers still seem alive, rather than succumbing to a winter slumber. As our Sharewatch notes this week, JB HI FI have recoded sales for the June year end in New Zealand of $170 million. They have 13 stores and that suggests sales of around$15 million per store per annum. That’s a simple quick average. Apparently they still want to see a better performance out of New Zealand, but having said that, for a group that have been here a relatively short time, the performance is pretty good. We also contemplate where the sales have come from to achieve those results. Some from major competitors but also from smaller outlets who must be finding the going so tough it will cause further closures.
A New Target Market
Finally one retailer has cottoned on to the fact that “Seniors” have a few bob, and should be worthy of targeting for special events. Furniture City produced a flyer announcing a “Senior Lifestyle Sale”. They suggest the specials are “only available exclusively to you” !! This is a very interesting concept, and we believe it will be followed by similar offerings to this group of consumers and others. This is not a bad consumer market and we wonder how many “Seniors” bought Adidas Rugby Jerseys, or wear Hoodies?
NIB Update
As you may have noticed, we’ve made some changes to the RCG website, and the NIB is in for an alteration also; you’ll receive an email invitation to join the new-fangled News in Brief tomorrow. It’s a format that we think will allow for a healthy discussion. Stay tuned…!
Sharewatch – JB Hi Fi
JB Hi Fi Share Prices 2009 - 2011
JB Hi Fi is a retailer of consumer electronics, games and music. With 144 stores in Australia and 13 in New Zealand, it racked up sales of $2.96 billion AUD for the financial year to June.
In New Zealand, JB Hi Fi achieved sales of $188.7 million (New Zealand dollars), but made a small loss – with EBIT of -$1.8 million. The company has been in strong growth mode here over the last few years but has not yet managed to become profitable. Comparable sales were up 2.4%, with most of that growth coming in July to December 2010: further evidence that the first six months of 2011 have been pretty tough for retailers.
JB Hi Fi listed a number of places where they plan to open stores in the next year, but none of these were in New Zealand. This is odd, since there still seem to be opportunities here: for example, JB Hi Fi has seven stores in Auckland but none in Christchurch. We will be watching with interest to see whether JB continues to expand on this side of the Tasman.
Retail News
ASB get new eco-friendly waterfront HQ
ASB’s new national headquarters will move from Albert St to Auckland’s waterfront once its radical new building is complete in two years’ time.
The circular building will be a 23,000sq m structure with a natural ventilation system, a controversial step forward in New Zealand office blocks, aimed at eliminating traditional air conditioning systems which have a high power usage.
(Source: NZ Herald)
Apple in top spot as largest listed US company
Investors seem to reckon you want oil, less than an iPad, as Apple became the most valuable company in the United States, surpassing Exxon Mobil on Wednesday.
(Source: NZ Herald)
Little band of gold gets dearer
Financial turmoil has pushed the price of gold to new highs and sent ripples through jewellery markets from Auckland to India.
While there are signals a bounce back in world stock markets could restrict the sharp gains of week gone, some analysts say the top of the gold cycle is a short way off.
(Source: NZ Herald)
Westfield seeks expansion in Brazil
Australian-based global shopping centre giant Westfield is to obtain a 50 per cent stake in a Brazilian shopping centre portfolio.
(Source: Insideretailing.com)
2nd supermarket planned for Auckland’s CBD
Construction of a further supermarket is soon to get underway in Auckland’s CBD. The New World store will open by the middle of next year at 125 Queen Street on the intersection of Queen Street and Shortland Street, beside Burger King.
The supermarket, which was formerly occupied by a food court is in addition to one being planned by contender Progressive Enterprises on Victoria Street.
(Source: NZ Herald)
Riot fashion: adidas PR ‘disaster’
Adidas is enmeshed in new PR predicament over its emergence as the fashionwear of choice for many of the juvenile rioters in London and other parts of Britain.
Dozens of images show looters and rioters wearing adidas clothing – hardly surprising, say British experts, when fashion labels cultivate a gangster chic image.
(Source: NZ Herald)
Westfield selects Milan for a provincial shopping centre
Westfield Group is making its second venture into a new market in a week, spending US$160 million to buy into a development site in the northern Italian city of Milan for a provincial “ world-class iconic regional shopping centre”.
(Source: NZ Herald)
