Briscoes' store refurbishments drives record sales

Friday, 8 September 2017

Briscoes Group managing director Rod Duke says he is not worried about Kmart, or The Warehouse's new home range.

Briscoe Group has poured money into refurbishing stores around the country to attract more shoppers and drive sales in an intensely competitive market.

Briscoe Group, which includes Briscoes Homeware, Rebel Sport, and Living and Giving, reported a $28.58 million profit after tax for the year to July 30, up 4.8 per cent on the same period last year.

Briscoes Homeware stores around the country have undergone refurbishments this year.

Briscoe Group managing director Rod Duke said he had been trying to move the Lower Hutt Briscoes and Rebel Sport stores for 20 years.

The Petone Briscoes store 'was probably the worst store across the entire network. It was just a horror', he said.

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Both stores have been moved to a new purpose built complex in Petone.

As part of a nationwide store upgrade, key stores including in Wellington's Taranaki St , were under scaffolding and construction for a number of months, effecting sales.

'The Taranaki [St] store is performing its socks off at the moment. It fell away but we were lucky enough that during that period we also opened Petone and renovated an extended Lyall Bay,' he said.

Stores were also upgraded in Rotorua, Auckland and Canterbury.

Duncan Cotterill retail expert Katrina Hammon said refurbished stores improved foot traffic in the short-term.

'However the most important refurbishment result is to ensure the brand remains relevant, on trend and instore experience reflects the online experience,' she said.

Duke said ongoing intense competition in retail and major disasters and a late start to winter affected sales had led to lower profit margins.

The February Port Hill fires in Christchurch and a major flood in Edgecumbe in April, a relatively late start to winter, and warmer than average temperatures in the North Island during the key June sales campaign. That was followed by intense cold, snow and heavy rain affected many parts of the country during July.

Despite competition and impact of unusual weather, Duke was satisfied with the group's sales and profit growth.

'The economic outlook for the second half remains uncertain. With the New Zealand general election imminent and house prices appearing to have stagnated, we believe that consumers will be as controlled and discerning as ever in relation to discretionary spending,' he said.

Duke said the retail market remained competitive, but new entrant Kmart posed no threat to sales, which were up 4.4 per cent to $280.3 million across the group in the six months to July 30.

'I don't see Kmart as a direct competitor for either of my brands,' he said.

On Thursday, The Warehouse announced its new homewares range that rivalled Kmart.

Duke said he knew his customers, and Briscoes' range of outperformed competitors.

'[Our competition] comes from a combination of Farmers … The Warehouse, probably a little of Kmart and a little of specialty stores. There's no one in that particular category that has a real sizeable chunk in the market outside of us.'

But Hammon said Kmart had a diverse offering compared to Briscoes.

'For example Kmart has clothing, toys, food products and stationery. There is, however, crossover given Kmart and Briscoes are both ramping up their homewares and sporting goods offering both in store and online,' she said.

'The Warehouse will likely become a more relevant competitor for both Kmart and Briscoes given the recent changes to their pricing, everyday low prices, catalogue layout and increase in homewares range.'