SmartCompany readers have become accustomed to the weekly dose of entrepreneurial inspiration that is Channel Ten’s Shark Tank. But the first season of Shark Tank came to an end last week and we will have to wait quite a few months for season two when the sharks will grace our television screens again. Season one of Shark Tank saw sharks Naomi Simson, Steve Baxter, Janine Allis, Andrew Banks and John McGrath offer 30 deals worth close to $7 million to budding entrepreneurs from all walks of life. The sharks didn’t open their wallets on the first episode of the season – although with Simson eating dog food on national television, the tone was set for a whole host of weird and wonderful business pitches. Now is the perfect time to re-live some of those highlights—and some of the deals that got away. The deals that were done One of the first successful deals done in the tank was for Hegs, a South Australian-based business that produces washing pegs with hooks to help hang additional pieces of clothing. Founder Scott Boocock secured a $380,000 deal from Naomi Simson, made up of $100,000 for 15% of the company and a $280,000 loan. Hegs has since capitalised on the investment, sending a Qantas plane full of washing pegs to the US to meet urgent orders. Tracy Beikoff, founder and chief executive of first aid kit the Original Rescue Swag, also scored a deal in the first few weeks of the season, convincing Steve Baxter to invest $100,000 for 40% of her business, which he topped up with a $120,000 loan. Baxter and Janine Allis teamed up to invest in portable washing device the Scrubba Washbag, with founder Ashley Newland leaving the tank with a $240,000 deal. The sharks each took a 10% stake in the company. The potential to tap into the lucrative US sports licensing market was what convinced Andrew Banks to invest in Bottlepops—sports themed bottle openers created by former Australian volleyball players Greg Jury and Stephen Brooks. Banks teamed up with Baxter to offer the duo a $150,000 deal for 40% of the company. Brisbane entrepreneurs Leah James and Rebecca Glover had the sharks in tears when they pitched their childcare service for children with special needs. Their pitch won over Baxter and John McGrath, who invested a combined $80,000 for 25% of the company. The founders of Tommy Sugo Spaghetti managed to secure a $350,000 deal from Allis at the end of March but not without some drama, with some Shark Tank viewers labelling the deal as “greedy”. In April, entrepreneur Meray Yassa scored a $200,000 investment from John McGrath the baby showering highchair she developed with her husband Hani, Charli Chair. But Yassa told SmartCompany the deal was more about the man behind the money than the money itself. It was McGrath turn to team up with Simson later in April, with the pair offering a $60,000 deal to Jeff Phillips, the founder of Byron Bay-based business Grown Eyewear. Emma Lovell parted with a third of her business Flybabee for a chance to work with Janine Allis. The Boost Juice founder offered Lovell $80,000 for 35% of the company, which designs and manufactures pop-up canopies for airline bassinets and baby strollers. Allis and Simson now own 25% each in a company that delivers underwear and socks to people’s homes every three months, after the sharks offered a deal worth $120,000 to Will Strange, co-founder of Three65 Underwear in May. Strange later revealed what he learnt from his time in the tank. Podiatrists Rachel Ferguson and Marie Ann Lewis created a three-way bidding way for their Synxsole orthotics but Andrew Banks triumphed with a $100,000 deal for 45% of their company. Children’s clothing featuring indigenous artwork and a device that helps physiotherapists measure their patients’ joints were also among the businesses that impressed the judges this season, while a range of iced tea drinks scooped up a $70,000 deal with Baxter on the last episode of the season. The ones that got away Appearing on the second episode of Shark Tank, Mobile Tyre Shop founder Travis Osborne seemingly walked away with a $250,000 deal from John McGrath and Steve Baxter. But within days it emerged that the deal had fallen over when it did not make it through the required due diligence process. The largest amount of money offered by one of the sharks this year was Steve Baxter’s $2 million offer to Stan Kruss, founder of Expocentric. But Kruss turned down Baxter’s offer as it was conditional on him agreeing to list his company on the Australian Securities Exchange. Many of the entrepreneurs who tried their luck in the Shark Tank ended up giving away more equity in their business than they originally planned, but not Dean Salakas, founder of party-supply business The Party People. Salakas was prepared to give up 10% of his business but not the 40% Janine Allis was after. Mobilyser founder Robbie Adams did not manage to net a deal in the Shark Tank and he opened up to SmartCompany about what got cut from the show and the harsh reality of reality TV. Similarly, Supreme Incursions co-founder Mark Pollard told us how the sharks got it wrong about his business. Joanne Rathbone and Michael Crosts, founders of Mr Browne self-tanning products, also missed out on a deal. They told SmartCompany this month the experience was “deflating” and “humiliating”. Pearls of wisdom from the sharks The five sharks in season one were full of advice and wisdom for fellow business owners and they regularly shared that wisdom with SmartCompany: Here’s Naomi Simson’s top five strategies for nailing a pitch. We also went behind the scenes of Shark Tank with Simson in March and in this opinion article, Simson asked: has Shark Tank made pitching the new Aussie national sport? The founding director of RedBalloon also revealed the one way to keep the passion alive in your business, her top tip for e-commerce success and four ways to improve your chances of business success. The first one is to never give up. Steve Baxter shared his tips for how to find an investor for your business, as well as six pieces of no nonsense advice for entrepreneurs. John McGrath offered these three tips for landing investment for your business. Janine Allis told SmartCompany the key to success in business and life is how you think and she shared some unconventional advice for franchisors. This article originally appeared at SmartCompany.
With the Apple Watch having now officially launched in Australia, developers and businesses releasing apps for the platform are describing a number of unique challenges posed by the device, including dealing with a smaller screen, unreliable Bluetooth links and new contexts for apps. The highly publicised launch of Apple’s wearable device will see the number of companies with smartwatch apps explode. The list of companies committing to apps on the platform includes Domain, REA, CBA, Fairfax, Qantas, Woolworths, OzLotteries, Westpac, St George and Zova. They join startups such as Rewardle and Freelancer which are already operating on smartwatches via Google’s Android Wear platform and, in some cases, created apps even before the Apple Watch was officially announced. Klyp mobile lead Tyson Bradford says many more businesses are taking a wait-and-see approach to the platform. “At the moment as a digital agency, we’re not seeing a lot of demand for apps, but there is a lot interest in the business community. A lot of businesses are watching the launch very closely,” Bradford says. Bradford says screen size is one of the major user interface issues developers need to consider when designing an app. “In general, smartwatch keyboards are unusable and on the Apple Watch it’s non-existent. That creates a number of UI challenges. So for example, for an app that relies on communicating between two people, instead of a keyboard, Apple allows you to use predetermined emoji, draw on the screen or call them by voice. That means the whole UI needs to be rethought,” he says. “The other issue is processing power and the necessity of being synced to the iPhone for many of the features. So, for example, the watch can’t access the internet directly, meaning you need to have your phone nearby – in a pocket, a bag or on a desk – when you want to call someone. “That means if you have a fitness app, there’s a good chance the user won’t have their phone in their pocket when they go running – and you won’t be able to get data onto the internet in real time. So you really need to consider the context as well as the UI.” Among the Australian startups preparing to launch an Apple Watch app is mobile ordering and payments platform AirService. Its chief executive and co-founder, Dominic Bressan says it’s important to be mindful of battery life, and that design elements work differently on a smaller screen. “It’s a new platform, a new experience, and you can’t just shrink an iPhone app down to a smaller screen. So you have to pick which elements you bring from the iPhone to the Watch,” Bressan says. “So notifications are something that naturally flows from the phone to the watch. I don’t see the full ordering experience translating to the watch, at least this stage. We will allow users to save a couple of favourite orders, but a full browse of venues with photos will remain on the iPhone. “It has been really tricky developing an app without a device to test on and needing to do everything in a simulator. You have to remember things like the Bluetooth Low Energy connection is prone to drop out on the real device, but always works flawlessly in the simulator. Likewise, Airtasker chief executive and co-founder Tim Fung says notifications are likely to be a key focus for the startups forthcoming Apple Watch app. “For us, the benefits of an Apple Watch app are proximity and immediacy. Most of our Apple Watch app features are worker-centric features. We’re looking at scheduling, alerts and notifications that will allow them to move quickly and respond to an alert,” Fung says. “When it comes to posting tasks, at this stage the interface just isn’t strong enough. That will change over time, thanks to the likes of Facebook and Twitter. Over the long term, we’re looking at things like using voice-to-text for tasks.” Do you know more on this story or have a tip of your own? Raising capital or launching a startup? Let us know. Follow StartupSmart on Facebook, Twitter, and LinkedIn.
A new co-working space aimed at established entrepreneurs as well as international and domestic business travellers has opened its doors in Sydney. Work Club, located on Elizabeth Street, aims to blur the lines between office, home and hospitality. The co-working space has a membership number capped at 100, with all applicants individually interviewed to ensure they will be the right fit for one another. Work Club also plans to expand into Melbourne next year and approximately eight other sites around the world thereafter, including New York, London and in Asia. Founder Soren Trampedach told StartupSmart he has more than 15 years’ experience in high-end commercial furniture and has advised think-tanks on connected workplaces. He originally got the idea for Work Club after visiting one of the first co-working spaces in New York in 2006. “I liked the idea of a shared office, but it felt like you were at a train station – it was really busy,” he says. “I thought I wouldn’t last half a day because it was really noisy. I thought, why not do something here but just for mature or more established entrepreneurs?” Trampedach says the reason for the strict membership number is not because he wants the space to be elitist. “We just want to make sure it is diverse in terms of industries represented – everything from architects to designers to everything in between. That diversity is important and the vast majority of people in here own their own business.” Trampedach says the space will be perfect for entrepreneurs who want to collaborate with business leaders, but also for people wanting peace and quiet which might not be possible in a traditional office or if they work from home. “We never wanted to be Qantas lounge – we didn’t want that noise aspect and if you don’t want to sit next to someone you don’t have to.” Work Club offers a three-tiered price model for members, ranging from premium 24/7 access, to two days a week or four times a month, with pricing starting from $600. Follow StartupSmart on, Twitter, and LinkedIn.
Australian location-based social platform Local Measure has announced the appointment of former Twitter executive Sara Axelrod as its first chief operating officer. Following Local Measure’s recent expansion supported into Singapore, Manila and Miami, Axelrod joins the Australian startup to further grow the business, oversee the day-to-day operations and ensure operational excellence across the company in all markets. Axelrod will be responsible for driving all customer-facing departments, including professional services, customer services and support, and sales. Having driven growth strategies globally within several business units at Twitter, Axelrod will also focus on fuelling Local Measure’s continued expansion across the US, Asia and other regions. Prior to Local Measure, Axelrod spent three years at Twitter during which she successfully grew Twitter’s mid-market sales team to over 130 employees globally. As the head of Technology, Telecom, and Mobile sector for Twitter, Axelrod’s role involved overseeing the company’s first efforts to develop and market mobile products. “What I find most compelling about Local Measure is its undisputed uniqueness in the way it extracts valuable insights from location-based data in real time, helping businesses delve into any social media interactions relevant to their brand,” says Axelrod. “Working with international brands like Fusion, Singtel and Qantas, and three new offices in Manila, Singapore and Miami, Local Measure is poised for even greater success. I’m looking forward to take the company to the next level in its global dominance.” Jonathan Barouch, founder and CEO of Local Measure, says that hiring a COO became vital to maintain and further mature the company’s global expansion. “Sara is a stellar hire and we are thrilled to have her on-board. This new hire marks a great milestone for Local Measure,” says Barouch. Follow StartupSmart on Facebook, Twitter, and LinkedIn
Location-based social B2B platform Local Measure, spun-off from now defunct consumer-focused Roamz, today announced the opening of an office in Singapore to support the company’s growth in the Asia-Pacific region. According to a statement on the announcement, the Asian market has a big appetite for social media where social content is shared at a higher rate than any other market. “There are many opportunities for Local Measure in Asia to help businesses in the region extract valuable insights from various social media platforms including Facebook, Twitter, Instagram and Foursquare,” says Jonathan Barouch, founder and CEO of Local Measure. “Expanding into APAC is an exciting next step in our growth plan. “Businesses nowadays appreciate the value of real-time local insight and Local Measure provides the tools to capture what customers are saying publicly about their brand on social media, while they’re on the business’ premises. We’ve developed a location-based customer intelligence tool that works for businesses of all sizes and across different languages.” With existing clients who use Local Measure in Singapore like Spizza, SingTel, Gelatissimo and Qantas, the business has already established a presence in Singapore, long before the opening of the Singaporean office, but the move acknowledges the importance of having feet on the ground to service the specific requirements of the local market. The Singapore office will be headed up by Gary Spero, vice president Asia at Local Measure. Spero has been with the company for the past three years. His responsibilities will include growing Local Measure’s market share in Singapore and driving the Singaporean team to service the specific needs of the local market.
Sydney Airport is set to negotiate with the federal government over the rights to build a second airport at Badgerys Creek, 50 kilometres west of Sydney. Under a deal struck with the Howard government, ASX-listed Sydney Airport owns the “First rights over refusal” over the $2.5 billion project. It will have nine months to negotiate terms with the federal government from the day federal Transport Minister Warren Truss issues an official “notice of intention” setting out the government’s terms for the project. News of the proposal for a second major airport in Sydney, without the 11pm to 6am curfew on Kingsford Smith, has been welcomed by the transport industry. “Sydney is the key gateway for air traffic in-and-out of Australia and the benefits of having two major airports will be felt nationwide,” Qantas chief Alan Joyce says. NBN Co to speed-up deployment of FTTB to head off TPG NBN Co's chief customer officer John Simon has announced plans to accelerate the rollout of fibre-to-the-basement (FTTB) technology, warning other carriers not to follow in TPG’s footsteps with a rival rollout. “If TPG can do it, then why can't six or seven other players do it? Then all of a sudden what you find is the more commercial or lucrative sectors of the market get picked off and you end up with a Swiss cheese network,” Simon says. “This is not just a TPG response plan. This is our plan to bring forward those revenues and also at the same time make it clear that we will respond to competitive threats.” Nadella calls on Microsoft to develop a “data culture” Microsoft chief executive Satya Nadella has told employees his company needs to develop a “data culture” in order to compete in a marketplace dominated by cloud services and mobile devices, during his third major appearance since taking the role. “Every aspect of Microsoft's business is being fundamentally transformed because of data. You have to build deeply into the fabric of the company a culture that thrives on data,” Nadella says. “To be able to truly benefit from this platform you need to have a data culture inside of your organization. For me, this perhaps is the most paramount thing inside of Microsoft. “It's not going to happen without having that data culture where every engineer, every day, is looking at the usage data, learning from that usage data, questioning what new things to test out with our products and being on that improvement cycle, which is the lifeblood of Microsoft.” Overnight The Dow Jones Industrial Average is up to 16262.6. The US dollar is down to US93.66 cents.
A move by the Reserve Bank to reform credit card regulations is likely to open up new competition by shifting oversight for credit card issuers away from banking regulator Australian Prudential Regulation Authority. The reforms will likely mean companies will no longer need to register as a bank in order to issue credit cards, with analysts saying the move is likely to open up competition in the sector. “The issue with the access arrangements currently is that they're quite restrictive. Companies essentially need to be an authorised deposit taking institution, a bank,” BIS World senior analyst Caroline Finch told the ABC. “Banks are under a lot of regulation so this has been a significant barrier to entry, particularly to foreign players, and for anybody who's not already a bank it's quite hard to get yourself registered as a bank.” Alan Joyce defends Qantas job cuts Qantas chief executive Alan Joyce has defending plans to slash jobs at the airline during a Senate hearing late last week. “I absolutely believe that the Qantas staff are in the need for the company to change and know that the best way to secure as many jobs in the Qantas group is to have a successful, profitable business going forward,” Joyce told the Senate inquiry. “We have to make, I will say again, some tough decisions. It is not easy having to make 5000 people redundant.” Super pressure grows on small funds The pressure on superannuation funds is growing, with smaller funds overseeing less than $5 billion in assets increasingly being pushed to merge or be swallowed up by their larger competitors. According to Financial Services Council chief executive John Brogden, the federal government’s introduction of the MySuper scheme and reforms to SuperStream were pushing compliance costs beyond the reach of many smaller funds. “Most of the pressure is coming from government changes, whether they be the cost of changing internal processes or adopting new IT systems,” Brogden says. “The smaller funds will have a lot of pressure on them to prove that they're viable beyond the next two or three years. The smaller you are, the more pressure is going to be on you.” Overnight The Dow Jones Industrial Average closed down to 16065.7 points. The Aussie dollar is down to US90.04 cents.
Prime Minister Tony Abbott has hosed down speculation of a GST increase after former treasury secretary Ken Henry called an increase to the tax “necessary”. “Raising the GST rate one day will be seen as necessary to underpin fiscal sustainability in the Australian federation,” Henry said. In response, Tony Abbott said the views of Henry were those of a private citizen. “Ken Henry is a distinguished, retired federal public servant, he's a distinguished former secretary of the Treasury; he deserves to be listened to with respect. “But they're just private views of a private citizen. We have a tax reform program, and tax reform begins with repeal of the carbon tax, the repeal of the mining tax.” Reject Shop chairman says chief executive wasn’t pushed The chairman of discount retailer The Reject Shop, Bill Stevens, has denied rumours former chief executive Chris Bryce was pressured to resign, after the chain announced a 16% slide in half-year profits last month. On Thursday, Bryce announced his resignation from the retailer, effective this financial year, with the sudden announcement sparking speculation he had been pressured by the board to stand aside. “The answer to that question [of Bryce being pressured] is unequivocally 'no'. This is entirely Chris' decision, and he has clearly looked at it from his perspective. Chris has his own reasons and part of it is it has been a solid four-and-a-half years as CEO,” Stevens says. Qantas chairman blames Labor for productivity drop Qantas chairman Leigh Clifford has lashed out at former prime ministers Kevin Rudd and Julia Gillard, claiming the repeal of Work Choices led to a drop in Labor productivity, in a speech to the Australasian Institute of Mining and Metallurgy. “The re-regulation of the labour market a few years back stalled the productivity improvement. Productivity went backwards – just as demand was softening and capital spending was slowing down. “It is already too late for governments to invest the proceeds of the boom. Those proceeds have gone. We are now in need of major infrastructure investment like the second Sydney airport, as well as major roads and rail, at a time when government budgets are under pressure.” Overnight The Dow Jones Industrial Average is down to 16108.9. The Aussie dollar is up to US90.27 cents.
The issues of Qantas and Virgin might be hogging headlines at the top end of town, but Australian start-up Skybid is looking to shake things up further down the travel industry food chain. The new platform, which allows consumers to bid for seats on flights, is set for take-off and Skybid founder Karis Confos says even though it is a crowded market, the platform would manage to differentiate itself from competitors. She told StartupSmart the market for Australians seeking the best price on flights was already large enough for a new contender, and growing. “The ability to bid for flights is so new, and I can see huge potential from both a growth and profit perspective,” Confos says. Being first doesn’t guarantee a start-up’s success: Google wasn’t the first search engine and Facebook wasn’t the first social network. Confos says she checked out her future competition closely and was encouraged by what she discovered. “I looked at what was out there and thought I could do it better. We’re yet to find out if we’re right, but I feel like there are so many more opportunities that the businesses already in this space aren’t taking advantage of.” While Confos says the social media potential for travel-focused companies is a largely untapped commercial advantage they’ll explore, her focus is on customer retention. “Pay-to-bid models can be wearying for customers and there is a lot of scope to reward customers on these services more. It’s significantly easier to keep a customer than get a new one. They’re the core of your business, so it’s a small tragedy when one walks away,” she says. The idea for Skybid has developed considerably for Confos, who says collaborating with others and discussing the idea with as many people as possible helped her shape an offering she’s confident in. “At first I was more concerned about accessing flight data and supply, but realised through conversations that I should be focused on traffic and reach. Marketing is my main concern and challenge right now,” she says. She adds critical feedback made her realise which answers she needed to know, and which weren’t critical at this stage. Skybid is set to launch within the next month or two. Even if it fails, Confos says she’s never been more excited about a project. “Even if it does fail completely, the experience will be so worth it. Don’t let something stop you if you’re gung-ho and committed to making it work.”
Embattled Qantas chief executive Alan Joyce is set to begin talks with union heavyweights today after announcing 5000 job cuts and a wage freeze, following a massive $252 million loss for the December half. “The current position is unsustainable. There are many Australian companies that have failed because they were not prepared to make the hard decisions. Qantas is not one of them,” Joyce says. Meanwhile, Prime Minister Tony Abbott has poured cold water on the idea of a federal government debt guarantee for the troubled airline. “Why should the government do for one what it is not prepared to do for all, or what is not necessarily available for all?” Abbott says. Air New Zealand posts record profit Air New Zealand has posted a record half-year profit of $NZ140 million ($A130 million) despite expectations of a $49 million loss at Virgin Australia, in which it holds a 24.5% stake. “We have worked hard on improving our cost base in an environment where we have not grown,” Air New Zealand chief executive Christopher Luxon says. “In fact, we have reduced our capacity flown overall as we realigned our long-haul network.” Nationals MP raises doubts over paid parental leave New South Wales National Party Senator John Williams has raised doubts over the future of Prime Minister Tony Abbott’s proposed paid parental leave scheme, telling the ABC the economy is too weak to support the plan. “I've said all along, I don't have a problem with the paid parental leave scheme. That is our policy so long as the economy is strong, but I do have concerns about the strength of the Australian economy,” Williams says. “To me a strong economy in Australia [has] a four in front of unemployment – that's currently got a six in front of it and a four or close to four in front of economic growth - and we're currently growing at 2.5%.” Williams says he will have talks with Abbott before announcing whether he’s willing to cross the floor over the proposal. Overnight The Dow Jones Industrial Average is up to 16248. The Aussie dollar is down to US89.6 cents.
Competition watchdog the ACCC has secured a deal with supermarket giants Coles and Woolworths capping petrol discounts at 4¢ a litre. The deal will see large cross-subsidies for fuel, estimated at between $350 million to $509 million in 2013, reallocated to deeper discounts on grocery items. “I'm quite pleased with them giving discounts off groceries and discounts off petrol – it was the linkage we objected to,” ACCC chairman Rod Sims says. “[The major supermarket chains were] using their position and profits in one market to subsidise prices in another market – that was what was causing the problems. “Our evidence was it appeared when shopper dockets went above 4¢ a litre that petrol prices went up. People who didn't have shopper dockets were paying more for petrol when shopper dockets went above 4¢ a litre.” Jetstar Asia records a profit as Qantas nosedives Jetstar Asia, a joint venture partly owned by troubled airline Qantas, has reported a small full-year profit for the year to June. The airline, owned 49% by Qantas with the remainder held by Singaporean businessman Dennis Choo, posted a bottom-line profit of $S2.5 million ($A2.2 million) for the year to June, compared with $S2.1 million a year earlier. However, the carrier faces intensifying competition from other low-cost carriers in south-east Asia, including Malaysia's AirAsia and Singapore Airlines-backed Tiger Airways. Chinese shadow banking warnings Experts are warning China’s economy could be derailed by excessive borrowing through the shadow banking system, with the sector now accounting for the equivalent of 40% of China's gross domestic product (GDP). The growth of the sector has been caused by strict lending requirements to non-government entities, forcing many businesses to look elsewhere for finance. “Shadow banking is the financial activity that exists outside the formal banking sector,” says Peking University finance professor Michael Pettis. “So it includes things like wealth-management products, it includes pawn shops, it includes a wide variety of things – but basically it's the non-regulated part of the banking sector.” “There's been an increasing sense that a lot of [that] borrowing is simply going to protect existing borrowers from going bankrupt.” Overnight The Dow Jones Industrial Average closed up to 15882.2. The Aussie dollar is at US87.53 cents.
There has been a slight tempering in business confidence following a post-election surge, according to the latest NAB survey. The index fell to five points in November, after hitting six points in October. A score above zero suggests confidence is improving, with higher readings suggesting a faster rate of improvement. “People are starting to see that changing the government doesn't change the economic activity levels. The other thing that also doesn't help is that our employment confidence was quite weak. And so that was offsetting some of the better trading conditions we were seeing,” NAB chief economist Alan Oster says. General Motors names its first female CEO General Motors is set to become the first US automaker to be run by a woman, after naming its global product development chief, Mary Barra, as its new chief executive. Barra will be the company’s fifth chief executive since US President Barack Obama forced out Rick Wagoner in 2009, and replaces Dan Akerson, who is standing aside after learning his wife had an advanced stage of cancer. “This is an executive who has a vision of where she wants to take the organisation. [Barra] is an adaptive personality and one who reacts to change well,” Akerson says. Qantas shares nose-dive to a record low as Abbott rejects bailout Qantas shares hit a new record low of just 96.5 cents, after the airline’s announcement it is expecting a first-half loss of $300 million, prompting ratings agencies to downgrade its debt to junk bond status. The airline has since announced plans to slash 1000 jobs over the next 12 months. However, despite calls from Qantas executives, Labor and trade unions to provide the struggling carrier with subsidies, saying that a bailout would risk creating a “bottomless pit” for taxpayers. Overnight The Dow Jones Industrial Average is down to 5146.2. The Aussie dollar is up to US91.61 cents.
Westpac has announced plans to topple NAB as Australia’s biggest lender to business by 2017, as competition between banks over the SME sector heats up. The bank has already increased the number of business lenders and appointed Julie Rynski as its first senior executive to manage the sector. “We believe we can significantly expand our share of the market after investing in our business banking arm,” Westpac’s head of business banking, Jason Yetton, told Fairfax. “It's a big market, growth is improving, and I think we've got a good capability in this segment.” China records strong export growth in November China’s General Administration of Customs has released figures showing a 12.7% year-on-year increase in exports during November, beating analysts’ forecasts. Total exports for the month increased to $US202.2 billion, while imports were up 5.3% year-on-year to $US168.4 billion. China’s overall trade surplus was up to $US33.8 billion, up from $US31.1 billion in October and significantly above the median forecast of $21.7 billion tipped by economists. Labor calls for partial renationalisation of Qantas Shadow treasurer Chris Bowen has called on the government to consider all options to help Qantas, including a partial renationalisation, after ratings agency Standard & Poor’s downgraded its credit rating to junk status. “A small stake would send the signal to debt markets around the world and to finances that this was a body with which the government had a keen interest. That is one of the options on the table that we'd look at constructively,” Bowen says. However, his call has been dismissed by Prime Minister Tony Abbott, who says the government’s job is to create an environment in which the airline can operate profitably. “Businesses have to operate profitably and in the end they have to operate profitably because of their own decisions and from their own resources,” Abbott says. Overnight The Dow Jones Industrial Average is down to 5186.0. The Aussie dollar is up to US91.36 cents.
Australia has secured an historic free trade agreement with its fourth-largest trading partner, South Korea, with the Abbott government claiming the deal will grow exports to the nation by 73% over the next 15 years. The deal will see South Korea scrap tariffs on a range of Australian commodities, including wheat, sugar, dairy, wine, horticulture, seafood, resources, energy and manufactured goods. However, it acknowledges that some sectors, including steel, auto manufacturing, steel, textiles, clothing and footwear will face increased competition from Korean businesses. “Independent modelling shows the agreement would be worth $5 billion between 2015 and 2030 and boost the economy by around $650 million annually after 15 years,” Prime Minister Tony Abbott says. “We wish to appreciate the impact upon our budget and our economy, not least of all we want to ensure that Australian jobs are supported and maintained and Australian opportunities are available in the future to make sure our national interest is advanced,” Opposition Leader Bill Shorten says. Qantas warned its debt could be downgraded to junk bond status Moody’s has warned embattled airline Qantas it is considering downgrading its credit rating to junk bond status, with the ratings agency tipping a full-year loss of up to $868 million. The news comes as Qantas warned of a first-half loss of up to $300 million, its first since being privatised, with the carrier announcing plans to axe more than 1000 jobs. The airline is also considering sell-downs of its Jetstar businesses in Australia, Singapore and Japan, as well as a partial sell-off of its lucrative frequent flyer program in a bid to shore up its position. Holden set to announce it is pulling out of Australia early next year Holden has reportedly made the decision to shut down its Australian operations as soon as 2016, with an announcement set for early next year. Citing “senior government ministers”, the announcement was set to be made this week, but was delayed on account of continuing discussions with the government. A decision to pull out would cost South Australia 13,200 jobs, along with $1.24 billion in economic activity. Overnight The Dow Jones Industrial Average is down to 15810.9. The Aussie dollar is up to US90.67 cents.
Mining tycoon Andrew “Twiggy” Forrest has publicly backed a controversial decision by Treasurer Joe Hockey to block the takeover of GrainCorp by US agribusiness giant Archer Daniels Midland. In a speech to the Australia-China Senior Business Leaders' Forum, Forrest pointed out that of 130 foreign takeover bids reviewed since the September election, the GrainCorp takeover was the only proposal rejected. “In the case of GrainCorp, the decision was necessary given the concentration of power in a near monopoly situation. “The upshot is whenever you have got such concentration of market power there, consideration needs to be given to more than one set of stakeholders, the shareholders.” ANZ hit with massive class action over bank fees ANZ has been hit with the largest consumer class action in Australian history, with law firm Maurice Blackburn taking action over excessive bank fees. Andrew Watson, the head of class actions at Maurice Blackburn, says the bank’s fees don’t accurately reflect the costs of minor transgressions. “The fees range, but $25 to $35 is the sort of range for fees that are imposed, so you might be a dollar over on your account or a day late in your payment and the banks will slug you with a fee that's out of all proportion to what it costs them for that minor transgression," he said. "We think it's worth [in total] about $50 million, but overall we're running a case for 170,000 bank customers against eight major banks, and that's worth about $220 million." Virgin attacks federal help for Qantas Virgin chief executive John Borghetti has called for Virgin Australia to receive the same support from the federal government as its arch-rival, with Treasurer Hockey refusing to rule out using public funds to prop up Qantas. “There have been media reports that the government offered comfort letters to Qantas’s credit rating agencies, prior to our capital raising,” Borghetti says. “I would also note that if Virgin Australia had been afforded the benefit of such a letter, it would have enabled us to achieve superior outcomes from both the recent debt bond issue undertaken in the US market and the capital raising that is underway.” Overnight The Dow Jones Industrial Average is down to 5314.3. The Aussie dollar is up to US91.36 cents.
When Gabrielle Thompson and Shannon Gunn quit their jobs as shoe designers for a big company a few years ago and decided to branch off on their own, they knew they needed to build up their business skills quickly. “We’re definitely designers first, and we weren’t especially business-minded,” says Thompson, who says the training programs and incubator programs they went through were critical to the ongoing success of their shoe and accessory label Tom Gunn. “It’s no good designing beautiful things if you can’t get it out there and get it sold,” says Thompson. “We had a lot to learn about managing the business side, how to bring your product to market, and cash flow. Cashflow is always a challenge for fashion business.” The pair graduated from the Creative Enterprise Australia Fashion Incubator run by Queensland University of Technology in 2010. Thompson and Gunn share the designing, but have separate areas of business responsibilities. Thompson says Gunn looks after the finances, the stores, visual merchandising and marketing, and she looks after the production and manufacturing. One of the key challenges they’ve had to grapple with as fashion design entrepreneurs is manufacturing issues. They did their own manufacturing until they realised the required price-point was just too high and then went searching for Australian manufacturers, but ended up having to go with a Chinese manufacturer. “Before us, there weren’t really independent shoe designers in Australia,” says Thompson. “Shoes are quite hard; there is no manufacturing so it’s hard to start selling as you grow. We have to go overseas. It’s a big step to start out.” In March this year their creative work was recognised by winning the fashion category in the 2013 QANTAS Spirit of Youth Award. They will be mentored by the team at Zimmerman for the next year. They now have over 15 stockists and have launched their own boutique in Fortitude Valley, Brisbane. They successfully ran a Melbourne pop-up store last year and plan to launch a Sydney one soon. “We’d love one in Sydney and we’re working on it. But it’s quite complicated because we really need to work in it and on it ourselves, so we need to get down there and no one wants to lease something residential for such a short time,” says Thompson. She adds that organising insurance for short periods, and creating a quality fit-out that matches the price range of their stock (shoes can be over $400 a pair), is challenging too. “The whole experience has been a dream come true. A dream with a lot of hard work!” says Thompson.
Surfwear giant Quiksilver has missed second quarter revenues and sales targets, announcing that it will dump non-core brands and liquidate excess inventory, placing further pressure on embattled rival Billabong. Quarterly losses at Quiksilver blew out to $US32.4 million, up from $US5.1 million a year ago, as revenue fell 6.8% to $US458.7 million. “Asia-Pacific revenues fell 9%, with the shortfall driven by headwinds in the Australia wholesale market. But we were pleased to see solid positive comp store sales growth in our full-price retail stores in that market,” Quiksilver chief financial officer Richard Shields said. Echo attacks Crown as Sydney casino battle intensifies Echo Entertainment chairman John O'Neill has lashed out at James Packer-controlled rival crown, alleging the casino giant is waging a “smear campaign” against Echo chief executive John Redmond as part of its campaign to win a second Sydney Casino licence. According to reports, the leaked emails allegedly detail an internal investigation by Echo into whether Redmond fell asleep in one of the bars at its Star Casino just weeks before taking over as chief executive. “These allegations are entirely baseless and the timing of this cheap smear campaign comes as no real surprise," Mr O'Neill told The Australian. Virgin looks to spread its wings further into Asia Virgin Australia is looking to begin running flights to Singapore using its long-range Boeing 777 or A330 aircraft in a bid to strengthen its alliance with Singapore Airlines. For its part, Singapore Airlines has purchased 19.9% of the shares in Virgin, with Virgin in turn recently cleared to take a controlling stake in Singapore Airlines controlled low-cost carrier Tiger Airways Australia. The move comes as Qantas moved its new international hub to Abu Dhabi in the United Arab Emirates. Overnight The Dow Jones Industrial Average lost 0.06% to 15,238.59. the Aussie dollar is down to US94.64 cents.
Boeing has warned of delays in deliveries of its 787 Dreamliner jumbo jets, with the aircraft grounded by air safety regulators in several countries as a result of overheating batteries.
China’s State Council has unveiled new energy conservation plans that would see the nation dramatically cut the growth rate of its coal consumption.
Australian musician Clare Bowditch will accelerate the development of her side project Big Hearted Business after smashing her $26,450 target on local crowdfunding platform Pozible.