Last week’s opening of a new fashion zone in central Christchurch, including Glassons, Hallenstein Brothers and a Mecca ‘Maxima’, effectively signalled the return of retail activity to the heart of Christchurch city. It is an indication to the people of Christchurch and New Zealand that the resolve of property owners and retailers to re-establish in the city centre is still strong. The consumer response was similar to this year’s Zara and H&M openings at Auckland's Sylvia Park, with long queues of customers lining up for the opening specials.
I would like to suggest that for Hallenstein Glasson Holdings this opening was more than a simply re-establishing a presence in the city. Some years ago, the two proud individual retail companies merged into one. The new stores in Christchurch were branded ‘Glassons’ and ‘Hallenstein Brothers’ respectively. The latter has me intrigued.
It’s been years since that name was used in full. So is this a new branding statement?
Does it signal a new approach from the company to maybe separate the brands to give them their own identity? The two stores have really operated hand-in-hand or side-by-side for some time, so maybe they will think about operating independently. It could also suggest that they are aware of the international arrivals to New Zealand and they are getting prepared for some fierce competition. Certainly the ‘Hallenstein Brothers’ branding is a very compelling signal.
The new stores also opened the same week that the company's Chief Executive, Graeme Popplewell decided to announce his retirement. Graeme had been with the group a long time and will remember the days when ‘Hallenstein Bros’ were a singular retailer operating out of the head office in Dunedin. The company was very much a traditional “mens and boys wear" store, and was branded as a family store in the truest sense of the word. Graeme's recent leadership has seen topsy-turvy results for the combined group, with profits one year and losses the next.
The apparel industry is tough. It is driven by seasonal changes and apparel Buyers need to possess the ability to judge the quanta of product required a year in advance. Changes to the climate with unseasonal weather will seriously impact on store results.
Regardless of my curiosity in the subtle branding change, it is good to see more retail activity emerge in Christchurch CBD.
Ballantynes which has been the lasting cornerstone of the CBD for the past years virtually trading on its own will be pleased to have some powerful fashion retailers across the road. We should now see the CBD begin to make its presence felt in the retail hierarchy of Christchurch.
Last week also saw a young couple win the Lotto $44 million jackpot. It’s appropriate we spare a thought for the hundreds of Lotto outlets around the country that supply the locations for Lotto agencies at no cost to the Lottery Commission.
Yes, you read that right, "no cost". These retailers make just 7 percent of all sales.
To put that into context, the same retailers would make $70,000 for the sale of a million dollars’ worth of tickets. That's a big call and more to the point, they have to provide the facilities which means renting space for the privilege, paying for the fit-out, together with staying open until 7pm on Lotto draw nights.
It all seems like a good idea to have a Lotto agency, some would say it builds pedestrian traffic and that these customers will buy other merchandise when making their Lotto purchase.
Our information is that buying a Lotto ticket is a singular purchase and pretty much unrelated to other purchases.
Just maybe, the Lotteries Commission may have to re-think their outlet strategy in years to come. The current arrangement is unlikely to be satisfactory for present outlets operating under it, some of whom simply don't make a profit from having Lotto as an outlet within an existing store, or standalone!
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 post originally appeared on RCG's blog.