Another Aussie retailer has collapsed.
Popular women’s fashion brand, Bardot, has become one of the latest victims of the cluttered
retail sector in Australia and called in the administrators.
CEO Basil Artemides commented,
“Despite double-digit growth in online sales, and our highly successful expansion into the
US and Europe, Bardot’s retail stores in Australia are competing in a highly cluttered,
and increasingly discount-driven market.
Operating a national retail network in its current state is no longer sustainable.
However, I can confirm that Bardot store trading will continue on a business-as-usual basis
while we undertake an immediate assessment of the business.
Both gift cards and credit notes will also be honoured.”
Bardot was launched in 1996, and has opened 72 stores across Australia employing 800 staff.
I guess it would be wise for the staff to start looking for a new job.
CEOs language often include a lot of feigned optimism.
Earlier in the year, menswear retailer Ed Harry also went into voluntary administration.
That came soon after the closure of veteran menswear brand Roger David in late 2018.
Actually, it’s one year to the day since Roger David went bust on the 2nd December
2018.
In March this year, cult fashion startup Shoes of Prey went into liquidation.
It offered shoppers ways to customise and design their own footwear, and attracted a
number of high-profile investors.
It sounded like an interesting idea, but was mired with controversy and months of uncertainty.
Co-founder Jodie Fox suggested that their downfall was due to them listening to their
customer base.
It sounds counter-intuitive, but apparently, customers don’t know what they want.
You have to be very careful when listening to their suggestions.
One high-profile example that comes to mind is New Coke which was launched back in 1985.
Coca-Cola famously tried to reformulate its iconic drink based on market research where
customers indicated they preferred something sweeter.
However, the backlash was swift, and the new drink was pulled from shelves just 79 days
after launching.
Time Magazine’s resident food critic at the time, Mimi Sheraton, described New Coke
as,
“… sweeter than the original formula and also has a body that could best be described
as lighter.
It tastes a little like classic Coca-Cola that has been diluted by melting ice.”
Ooh, harsh.
Big companies have to remember that customers aren’t business people and so their opinions
should be taken with a grain of salt.
In 1982, someone on the Apple Mac team suggested to “do some market research to see what
customers want”.
Steve Jobs famously replied, “No, because customers don’t know what they want until
we’ve shown them.”
Jobs has also been quoted as saying,
“Some people say, ‘Give customers what they want.’
But that’s not my approach.
Our job is to figure out what they’re going to want before they do.
I think Henry Ford once said, ‘If I’d asked customers what they wanted, they would
have told me, “A faster horse!”‘
People don’t know what they want until you show it to them.
That’s why I never rely on market research.”
And consequently, we have a bankrupt shoe retailer in Australia that listened to their
customers who said they wanted to customise and design their own shoes.
In practice, that’s not want they wanted at all.
Also in January 2019, Napoleon Perdis Cosmetics also went into administration.
Half of its 56 stores were closed and the chain put up for sale.
Mr Perdis blamed falling foot traffic and rising costs as the reasons for calling in
the administrators.
It’s not just fashion retailers that have been suffering.
Food outlets have also been failing.
In October this year, celebrity chef Shannon Bennett’s Melbourne burger chain Benny Burger
went into liquidation owing almost $170,000 to suppliers and the Australian Taxation Office.
Also in October, Red Rooster closed seven of its stores in Queensland after a franchisee
went into voluntary administration.
Hundreds of thousands of dollars of wages were owed to staff with more than a hundred
thousand dollars outstanding in superannuation and annual leave.
It’s understood that the parent company, Craveable Brands, has covered these costs.
Pizza chain, Criniti’s, also went under just last month.
Employees were told that several of the 13 sites across the country will be closed for
good but administrators are yet to announce which will survive the reshuffle.
Co-founder, Rima Criniti, who left the business in 2009, commented on the collapse,
“It takes more than fantastic food and hospitality to make a restaurant group a success.
It also requires smart management.
There are very high costs involved in the hospitality industry, and if this is met with
poor business decisions, then the business, its staff, and customers, will all suffer
– as we now see with Criniti’s.”
Also in November, online furniture shop Zanui collapsed after suddenly entering voluntary
administration.
In recent years, many commentators have blamed the shift to online sales for the retail slump,
but Zanui was an online retailer, and it still went under.
So perhaps online retail is being used as a bit of a scapegoat.
Popular fitness store Muscle Coach also collapsed last month.
It’s said to be almost $1,000,000 in debt.
Iconic Australian discount retailer Dimmey’s is also closing its doors.
Despite having traded for more than 166 years, it too has succumbed in this struggling retail
environment.
Dimmey’s is believed to be the oldest ongoing retail company in Australia.
Clearly, no one is immune.
Obviously, it’s not just Aussie companies going under.
In September this year, US fashion retailer Forever 21 filed for bankruptcy.
This is just the latest in a long chain of collapses and store closures of US retailers
including Toys ‘R’ Us, Sears, and Barneys, just to name a few.
The situation has been described as a “Retail Apocalypse” with US retail giants such as
JCPenney and Macy’s all suffering.
Aussie department store giants aren’t immune.
Both Myer and David Jones are in decline having been described as being in a “death spiral”.
Credit Suisse analyst Grant Saligari says that department stores around the world have
been on a downturn for quite a long time.
He said,
“Shopping habits have changed.
We’ve seen growth in different category pillars, and there’s been an evolution in
online shopping.
There’s no light at the end of the tunnel.
It’s a structural decline.”
Personally, I think there’s one major reason for this retail slump — debt!
Australians are swimming in it!
Here’s a chart from the RBA.
Debt has been dramatically rising over the last three decades.
It’s just been going up and up and up.
What effect does this have on retail spending?
In this chart, we can see that consumption is going down.
Disposable income is going down, and household savings are going down.
Although Coles Supermarkets have dropped their “Down, Down” advertising campaign, they
were right on the money in that along with their prices going down down, so too were
Australians’ ability to purchase anything.
Income down.
Savings down.
Consumption down.
No wonder Australian retail is in trouble.