Close
 

Why the Arthur Barnett purchase is a really good move

  • Opinion
  • May 19, 2015
  • Paul Keane
Why the Arthur Barnett purchase is a really good move

Last week, it was announced that the Arthur Barnett department store, in Dunedin, was being acquired by the owners of the H & J Smith Group. This passed unnoticed in most news items. So was this news? Yes, most definitely.

It also came hot on the heels of the latest retail sales figures. Likewise, was this important information? Absolutely. For the past few months, we get nothing on our news other than the burgeoning house prices in Auckland and the impact on homeowners etc. As we have said before, there is more to life than Auckland property prices.

Retail is a significant part of NZ's economy

The retail industry in New Zealand accounts for 340,000 jobs nationally. The industry is one of the most important to the NZ economy. Through this industry, there are not only jobs created but new wealth for property investors, importers of product (merchandise), distribution facilitators (product needs to be dispatched); transport operators; the list goes on. Therefore, the retail sales results announced last week were truly outstanding. 

Rising sales across the board

Sales rose across the board and most store types saw solid growth. Department stores and anyone selling home products – furniture, appliances, hardware – will have been very pleased. Strong lifts in accommodation and food & beverage suggest that it’s been a great summer for tourism.

Fashion toughing it out

Fashion retailing has had a rough time of it in the last few years. These stores have struggled with online competition and downwards pressure on prices. In the March quarter, the actual volume of product sold was up 4.1%, but prices fell, meaning that sales were up just 3.0%. That’s still a good result compared to the last year or two, but stores are really working hard for those sales. It also follows a sales increase of just 0.6% in the more important December quarter.

How retail is fairing in the regions

The plot thickens when you take a regional lens. A large part of the retail growth is happening in Auckland. Most of the growth that remains is happening in Canterbury. For retailers in other parts of the country, chances are they’re looking at sales and wondering why they’re so flat. Retail sales increased by $2.8 billion in the year to March 2015 – 5.1% growth, and worth crowing about. But $1.5 billion was in Auckland, and $800 million in Canterbury. For other regions, all they can do is take comfort in the economic outlook seeming fairly stable, hope for some small amount of growth, and do the best they can to manage costs.

More people, more tax, better services

It’s incredibly important that as a nation we don’t get wound up about the number of people arriving in NZ annually, most of whom are moving to Auckland, and lose sight of the benefits that such new numbers bring. The people who arrive need housing of course, but they also need to be fed (supermarkets); they also need to buy clothes (apparel stores); they need furniture (appliance and furniture outlets); education (more schools); medical services (doctors, nurses and facilities), leisure activities (games, bars, restaurants, entertainment), on and on the list goes.

The opportunities through new numbers of people for the retail industry and others that hang off it are huge. Are these not the benefits of our national population growing in numbers? Will this not have immense benefits for our economy? More people, more tax, better services!

It really is a no brainer. This country is better off with 5 million people than 4.5. Retail growth is what the country needs for all the above reasons. it was no surprise to us, therefore, to see the acquisition of Arthur Barnett. 

The history of Arthur Barnett

This department store business has a long history in NZ retailing. It’s a “southern identity”, born and bred from good South Island roots. Ventures north were never successful, and regrettably, despite its owners making every effort, it never really made it in Dunedin in our modern retailing times. Why was that? A department store trading out of a single location simply does not have the infrastructure. Kirkcaldie and Stains in Wellington falls into the same boat.

Will H & J Smith succeed?

So will H & J Smith make a difference? We think this is a really good purchase. The Arthur Barnett name may change, but the strength of the H & J Smith brand in the deep south, together with its family culture and a really good understanding of retail in the South Island, will make a huge difference to the Arthur Barnett offering. It will also help the much maligned Meridian Mall in Dunedin that has some quality speciality retailers but demands a strong anchor, something Arthur Barnett could not quite give.

It will also rekindle some new love from local consumers who, while faithful to Arthur Barnett, will be overjoyed at the opportunity to support a strong South Island identity. Consumers should return in large numbers to the new brand.

What it comes back to is retailing. Good product, knowing what your customer wants and providing quality service. The retailing industry, through the latest results, is in very good heart. May it continue to prosper. The Arthur Barnett acquisition will just be another milestone in this incredibly fascinating industry.

 Paul Keane is a registered property professional and has vast experience in New Zealand’s commercial property industries. He provides retail and property consultancy including development management to many New Zealand property owners, developers and city councils. 

This article was originally published on RCG's blog.

​ ​

This is a community discussion forum. Comment is free but please respect our rules:

  1. Don’t be abusive or use sweary type words
  2. Don’t break the law: libel, slander and defamatory comments are forbidden
  3. Don’t resort to name-calling, mean-spiritedness, or slagging off
  4. Don’t pretend to be someone else.

If we find you doing these things, your comments will be edited without recourse and you may be asked to go away and reconsider your actions.
We respect the right to free speech and anonymous comments. Don’t abuse the privilege.

 

Direct sales: How multi-level marketing works

  • News
  • April 18, 2019
  • Sarah Dunn
Direct sales: How multi-level marketing works

The $200 million-plus direct sales economy contains many lessons retailers can use. As part of a wider look at this thriving corner of retail, we created a quick explainer showing how this business model typically works.

Read more
 
 

Direct sales: Meet the upliners

  • News
  • April 18, 2019
  • Sarah Dunn
Direct sales: Meet the upliners

We profiled different participants in the direct sales industry to find out what retailers can learn from them. Meet Isagenix distributors Adam Nesbitt and Bianca Bathurst.

Read more
 
 

Direct sales: Meet the business builder

  • News
  • April 18, 2019
  • Sarah Dunn
Direct sales: Meet the business builder

As part of a wider story looking at what retailers can learn from the direct sales industry, we profiled Isagenix distributor Ben Frost.

Read more
 

Social scoreboard

Zavy and The Register have worked together to create a scoreboard that compares how the top 25 traditional media advertising spenders in New Zealand have performed on social media over the past 30 days, updated in real time.

 
topics
Concept to closet
Business coverage of New Zealand Fashion Week.
Town centres
A positive retail environment over the past 12 ...
Amazon Arrival
Keeping up with all things Amazon as it ...
The Retail Yearbook 2017
As we battle our way through the busiest ...
Hospitality enhancing retail
Some think food and integrated hospitality offerings will ...
The future is bright
We spoke with four retailers in their twenties ...
Spotlight on signage
At first glance, the humble in-store sign might ...
Red Awards 2016
The Red Awards for retail interior design celebrate ...
Auckland Unitary Plan
Auckland is changing. The Unitary Plan will decide ...
How to open a store
Sarah Dunn considers what it would take to ...
All things to all people
Kiwi retailers share their omnichannel strategies.
Rising stars
Retail's top young achievers.
Delivering on your promises
The sale isn't over until your item is ...
Retail in heartland New Zealand
Retailers keep the regions pumping, but how strong ...
Sisterhood
Women in retail help one another. We spoke ...
The changing face of retail
Shifting demographics are creating big changes in New ...
The retail yearbook
With the help of experts in the retail ...
Retail rogues
We put the spotlight on staff training. Jai ...
Here come the giants
Topshop has arrived in Auckland’s CBD, David Jones ...
Window shopping: A spotlight on social media
Sarah Dunn and Elly Strang look at how ...
From retail to e-tail
Ecommerce has become part of the way mainstream ...
Loyalty in the digital age
How are retailers maintaining loyalty? Sarah Dunn, Elly ...
The Innovators | In partnership with Spark Business
Technology is rapidly changing the retail industry as ...
 
News

Leveling up: Exploring multi-level marketing in New Zealand

Is the $200 million-plus direct sales economy retail by another name or something different? Regardless, what can we learn from it?

 
 

A spectrum of retailers

  • Opinion
  • April 18, 2019
  • David Farrell
A spectrum of retailers

In recognition of April being Autism Awareness Month, retail commentator Dave Farrell considers the role of those on the spectrum in retail.

Read more
 

How on-trend is your retail business?

  • Sponsored Content
  • April 18, 2019
  • Sponsored content
How on-trend is your retail business?

New insights from Visa highlight five evolving trends emerging from savvy retailers around the world. We’ve taken these global trends and looked at how they are playing out with merchants in New Zealand, and we’d now like to hear what you think of them.

Read more
 
Next page
Results for
Topics
Jobs
About us.

The Register provides essential industry news and intelligence, updated daily. And the digital newsletter delivers the latest news to your inbox twice a week — for free!

©2009–2015 Tangible Media. All rights reserved.
Use of this site constitutes acceptance of our Privacy policy.

Advertise
The Register

editor@theregister.co.nz

Content marketing/advertising? Email anita.hayhoe@icg.co.nz or call 022 639 3004

View Media Kit

}