Harry Potter die-hards, Masterchef mum's and the retail industry in general, is agog this week, as the news that the parent company for Borders Australia and Angus & Robertson "REDGroup", has entered voluntary administration. - When two of Australia's most iconic book stores can no longer sustain the weight of their own operations, questions WILL be asked.
CK knows a thing or two about retail - I spent 8 long years in it as a whore for many of Australia's iconic names in entertainment. There's the one with the sunglasses. A now defunct well known music name. Two well known current retailers of music, and one now defunct retailer of movies.
I've been a casual. A full-timer. A manager. A merchandiser. A buyer. An area-manager. Opener of stores. Closer of stores. Refurbisher and site-manager of stores. Hirer and firer. Trainer and coach. Even done some stints in warehouses, and head offices.
The death of the independant music store was written off as the evolution of technology, and other quasi-trendy terms like a "shift in marketing trends". I, along with many, mourned the passing of music stores in favour of major retailers carrying a range of homogenised vegetables in their soup. There's something to be said for a place where the freaks of nature can gather and belong, and often the local music store was it. Adorned with street-posters, autographs, memorabilia, ticket stubs and imported goodies from a world away, the music store guy was something I aspired to be. And I was damn good too. They were good times.
By the time my opportunity to join music retail came, the cracks were opening. If I was going to live my dream, and work everyday happily surround by music, I'd have to lower my standards and work WITH the major retailers. I used to be the frustrated metal fan who couldn't get my CD's locally, so I brought this level of fandom to my stores ranges with excellent results.
I can tell you from direct experience that administration for a business in retail, is nothing less than ugly at it's ugly worst. Futures become uncertain for workers across the company, some with mortgages and children, other with debts and rents. Morale goes through the floor as a paralysing hopelessness descends on the vibrancy of the staff.
The process is as follows - An accountancy firm will be appointed to "run the business", which has several immediate effects. Those bitches don't muck around. Orders with suppliers will cease, a moratorium on store rostered hours increasing will be put in place, and (here's the worst bit for the already demoralised staff) "Gift Vouchers will be temporarily frozen". - It's February, and God only knows how many millions of dollars in outstanding vouchers exists with Borders and A&R.
By freezing the vouchers, stopping orders, and capping hours, the firm can then ascertain how much debt exists in the form of (a) bank debts, (b) suppliers debts, (c) landlords debts, and (d) employee entitlements. Frozen vouchers present a massive complication for the suffering managers of those stores. Under the old banner "public interest", mainstream media will sensationalise the situation, and NOT inform the public properly on the process. Just wait until the news picks up that Xmas Vouchers can't be used ! It happened to me in one of my companies.
Frozen vouchers can, and often are redeemable, after a period of time has elapsed, and the accounting firm is assured that enough money is in the company to honour them. - It's just smart business. Imagine if I took over your shop because you were in debt and lost 3 million in cash because you owed people vouchers ! The accounting firm does all of this to ascertain how much debts exists, and how profitable the business is, so they can find a buyer. This is the best way to service existing debts.
But of course the media wont tell people this ... it's much better for them to create fear and uncertainty. Who knows, maybe there'll be a riot outside the City store tomorrow eh ?
It's here where things get nasty. Idiot self-righteous customers will march on in and abuse the pimply teen behind the counter demanding their $30 gets spent ! The pimply teen is of course powerless and out come the expletives and insults. I've heard them all. "I hope you go broke" is a favourite - Gee thanks love, if that happens I have no job, and here I am dealing with your fucking 9-year old rant ! Fed up one day, I even told a woman once "I hope you get hit by a bus" !!!
Administration aside, the more imporatnt on-going issue here for the retail industry in Australia, is the monopoly of landlords on the retail landscape and their strangling of wealth from their tennants - The monolithic Lend Lease and Westfields are the major players. Despite the news of the REDGroup situation, Westfields ($9.42-$9.75) and Lend Lease ($7.20-$9.00) have enjoyed a bumper Xmas as far as I can tell from their respective share prices. Not too bad considering every other retailer is crying poor over the GFC and reduced discretionary spending.
An aspiring business person upon entering the lure of mega-malls, is effectively punished financially for being successful and drawing shoppers to the centre to spend. Centre managers keep constant track of your figures and bump up rents accordingly to ensure the corporate arm is strong. In the struggle to survive, staff are increasingly treated as costs and not an investment in the ongoing success of all concerned. Quick decisions get made by shop owners under financial duress and hours are always the first to get cut. - It's all too familiar. Try buying a CD you actually want these days is a lottery with the choice of retailers on offer. And NOW we have book stores in a massive decline !!!
I predict a mini-revolution - I dont know when or how long it will take. But the struggle is epic and it can only go one of two ways. Internet Delivery VS Local Market Community - Either people realise that it's much more efficient and convenient to have one truck go to 100 homes with goods, rather than 100 people converge on an environmental damagaing concrete colossus with their fossil-fueled cars ..... OR, business minds like mine see the need to rationalise and rebel away from major retailing, to better service local community.
You've got to ask yourself this one question ... If the book-reading needs of 250,000 people (my local community population) cannot be met with giants like Borders and Angus & Robertson having only ONE store each in the biggest mall in town .... isn't something seriously wrong ? People DO read. While I don't buy novels myself, I understand from a music consumer point of view that fans can be equally a rabid in their tastes. You only need to look at the Harry Potter generation.
Ultimately, REDGroup will either close some stores, or find a buyer who will close some and keep the rest. It's uncertain times for a lot of people right now. Until such times as the levels of debt can be established by the accounting firm, no announcements or decisions will be made. If the debt is too high, it's time to take a number a get what you can, especially if you're a worker with leave entitlements.
The only ones that seem to be happy about this revolving door of retailers are Westfields and Lend Lease.
If you go to a Borders or an Angus & Robertson store anytime soon - Be NICE to the staff. Their futures are shrouded in doubt and insecurity, and the last thing they need are arseholes yelling the joint down. If you see someone abusing the staff, tell them to SHUT THE FUCK UP !
Or better yet, tell that screaming idiot "you hope they get hit by a bus !"
CK knows a thing or two about retail - I spent 8 long years in it as a whore for many of Australia's iconic names in entertainment. There's the one with the sunglasses. A now defunct well known music name. Two well known current retailers of music, and one now defunct retailer of movies.
I've been a casual. A full-timer. A manager. A merchandiser. A buyer. An area-manager. Opener of stores. Closer of stores. Refurbisher and site-manager of stores. Hirer and firer. Trainer and coach. Even done some stints in warehouses, and head offices.
The death of the independant music store was written off as the evolution of technology, and other quasi-trendy terms like a "shift in marketing trends". I, along with many, mourned the passing of music stores in favour of major retailers carrying a range of homogenised vegetables in their soup. There's something to be said for a place where the freaks of nature can gather and belong, and often the local music store was it. Adorned with street-posters, autographs, memorabilia, ticket stubs and imported goodies from a world away, the music store guy was something I aspired to be. And I was damn good too. They were good times.
By the time my opportunity to join music retail came, the cracks were opening. If I was going to live my dream, and work everyday happily surround by music, I'd have to lower my standards and work WITH the major retailers. I used to be the frustrated metal fan who couldn't get my CD's locally, so I brought this level of fandom to my stores ranges with excellent results.
I can tell you from direct experience that administration for a business in retail, is nothing less than ugly at it's ugly worst. Futures become uncertain for workers across the company, some with mortgages and children, other with debts and rents. Morale goes through the floor as a paralysing hopelessness descends on the vibrancy of the staff.
The process is as follows - An accountancy firm will be appointed to "run the business", which has several immediate effects. Those bitches don't muck around. Orders with suppliers will cease, a moratorium on store rostered hours increasing will be put in place, and (here's the worst bit for the already demoralised staff) "Gift Vouchers will be temporarily frozen". - It's February, and God only knows how many millions of dollars in outstanding vouchers exists with Borders and A&R.
By freezing the vouchers, stopping orders, and capping hours, the firm can then ascertain how much debt exists in the form of (a) bank debts, (b) suppliers debts, (c) landlords debts, and (d) employee entitlements. Frozen vouchers present a massive complication for the suffering managers of those stores. Under the old banner "public interest", mainstream media will sensationalise the situation, and NOT inform the public properly on the process. Just wait until the news picks up that Xmas Vouchers can't be used ! It happened to me in one of my companies.
Frozen vouchers can, and often are redeemable, after a period of time has elapsed, and the accounting firm is assured that enough money is in the company to honour them. - It's just smart business. Imagine if I took over your shop because you were in debt and lost 3 million in cash because you owed people vouchers ! The accounting firm does all of this to ascertain how much debts exists, and how profitable the business is, so they can find a buyer. This is the best way to service existing debts.
But of course the media wont tell people this ... it's much better for them to create fear and uncertainty. Who knows, maybe there'll be a riot outside the City store tomorrow eh ?
It's here where things get nasty. Idiot self-righteous customers will march on in and abuse the pimply teen behind the counter demanding their $30 gets spent ! The pimply teen is of course powerless and out come the expletives and insults. I've heard them all. "I hope you go broke" is a favourite - Gee thanks love, if that happens I have no job, and here I am dealing with your fucking 9-year old rant ! Fed up one day, I even told a woman once "I hope you get hit by a bus" !!!
Administration aside, the more imporatnt on-going issue here for the retail industry in Australia, is the monopoly of landlords on the retail landscape and their strangling of wealth from their tennants - The monolithic Lend Lease and Westfields are the major players. Despite the news of the REDGroup situation, Westfields ($9.42-$9.75) and Lend Lease ($7.20-$9.00) have enjoyed a bumper Xmas as far as I can tell from their respective share prices. Not too bad considering every other retailer is crying poor over the GFC and reduced discretionary spending.
An aspiring business person upon entering the lure of mega-malls, is effectively punished financially for being successful and drawing shoppers to the centre to spend. Centre managers keep constant track of your figures and bump up rents accordingly to ensure the corporate arm is strong. In the struggle to survive, staff are increasingly treated as costs and not an investment in the ongoing success of all concerned. Quick decisions get made by shop owners under financial duress and hours are always the first to get cut. - It's all too familiar. Try buying a CD you actually want these days is a lottery with the choice of retailers on offer. And NOW we have book stores in a massive decline !!!
I predict a mini-revolution - I dont know when or how long it will take. But the struggle is epic and it can only go one of two ways. Internet Delivery VS Local Market Community - Either people realise that it's much more efficient and convenient to have one truck go to 100 homes with goods, rather than 100 people converge on an environmental damagaing concrete colossus with their fossil-fueled cars ..... OR, business minds like mine see the need to rationalise and rebel away from major retailing, to better service local community.
You've got to ask yourself this one question ... If the book-reading needs of 250,000 people (my local community population) cannot be met with giants like Borders and Angus & Robertson having only ONE store each in the biggest mall in town .... isn't something seriously wrong ? People DO read. While I don't buy novels myself, I understand from a music consumer point of view that fans can be equally a rabid in their tastes. You only need to look at the Harry Potter generation.
Ultimately, REDGroup will either close some stores, or find a buyer who will close some and keep the rest. It's uncertain times for a lot of people right now. Until such times as the levels of debt can be established by the accounting firm, no announcements or decisions will be made. If the debt is too high, it's time to take a number a get what you can, especially if you're a worker with leave entitlements.
The only ones that seem to be happy about this revolving door of retailers are Westfields and Lend Lease.
If you go to a Borders or an Angus & Robertson store anytime soon - Be NICE to the staff. Their futures are shrouded in doubt and insecurity, and the last thing they need are arseholes yelling the joint down. If you see someone abusing the staff, tell them to SHUT THE FUCK UP !
Or better yet, tell that screaming idiot "you hope they get hit by a bus !"