Forum Archive Index - December 2003

["tennyson@caverock.net.nz" <tennyson@caverock.net.nz>]

I wanted to pass some comment on a recent NZ Herald article by Brian 
Gaynor where he lambasted both ''Air NZ" and  "The Warehouse" for 
buying large extablished buinesses in Australia.  He contrasted this to 
the Hallensteins and Michael Hill approach of piecemeal shop by shop 
expansion that has with hindsight, been much more successful.

IMO , the Warehouse is different from those other two aforementioned 
retail businesses.   WHS tends to operate from greenfield sites and 
markets itself as a destination in its own right.     With the cost of 
advertising in Oz, and the low margins the Warehouse has, I think that 
starting from a single store, and rolling out other stores one by one 
would not have worked.     It makes much more sense to knock out a 
couple of competitors like Crazy Clints and Sollies as a starting point 
and build from there.

By contrast 'mall' based stores like HLG and MHI already have the foot 
traffic before they even open.  I am not sure that either of those 
concepts would work as stand alone shopping destinations.  They 
probably benefit from being around other stores that sell similar things.  
I don't think you can say that about the Warehouse business model.

By the same token suggesting that Air NZ could have got up and 
running on a single route, say Melbourne to Sydney and built from 
there, I don't think is on.    True, Virgin Blue more or less started like 
that.    But they were up against a near monopoly (Qantas), and their 
real break was the collapse of Ansett.   If Ansett  had been better 
managed I wonder if Virgin Blue would still be with us today?

At any rate, I have never worked myself in either the retail trade or  the 
airline trade so I amy be off base with these remarks.   But I am putting 
them out there to see what others think.

SNOOPY

discl: hold WHS


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