The G20 finance ministers meeting has wrapped up, with the forum agreeing on a global growth target 2% higher than current forecasts over the next five years. “In a major step forward, the G20 finance ministers and central bank governors have decided to put a number on our aspiration,” Federal Treasurer Joe Hockey says. “We are committed to implementing policies that aim to lift our collective GDP by more than 2% above the trajectory implied by current policies over the next five years. “Put differently, our policies could deliver over $2 trillion more in real economic activity and tens of millions of new jobs.” BHP Billiton boss still bullish about the Australian economy BHP Billiton chief executive Andrew Mackenzie says he remains confident about the state of the Australian economy, despite auto manufacturers ending Australian production and the closure of Alcoa’s Point Henry smelter. “To be pro-Australia for a moment, I wish [the closures] hadn't happened … but I have a global perspective, I see what happens elsewhere in the world and I still think Australia has an awful lot going for it,” Mackenzie told Channel Nine. “'I think examples like Alcoa and other industries around there just simply underscore the importance of the whole country to get behind an agenda of competitiveness and productivity. “I think we have got to all remember that the world economy is still growing quite well, Australia is still growing and growing a lot better than Europe, so please keep that up because that is one of the bets we are making, that you are going to continue to grow a bit better than Europe.” David Jones still open to a Myer takeover – at the right price David Jones is set to have discussion with Myer in a fortnight to further discuss the possibility of a merger between the two iconic retailers. Senior executives at David Jones are saying they are not opposed to a merger or takeover in principle, although are warning any deal with Myer will have to properly value their company. “It's not a merger of equals, it's a takeover, and in any takeover they have to pay a premium. What we can bring to the table is very valuable and that should be fully recognised in the value,” a David Jones source told Fairfax. Overnight The Dow Jones Industrial Average is down to 16103.3. The Aussie dollar is up to US89.85 cents.
THE NEWS WRAP: Victorian Premier goes to Canberra seeking assistance as Toyota pulls out of Australia2:32PM | Monday, 10 February
Toyota says it will stop making cars in Australia by the end of 2017, drawing the curtain on Australian car manufacturing and costing thousands of jobs. Victorian Premier Denis Napthine will travel to Canberra seeking a federal assistance package. About 2500 Victorian Toyota workers will lose their jobs, while thousands more jobs in the wider automotive industry are also at risk. Toyota blamed Australia’s high dollar, the high cost of manufacturing in Australia and low economies of scale for the decision to leave Australia. David Jones chairman and directors resign as part of “board renewal process” The chairman of upmarket department store David Jones and two directors have quit amidst concerns around corporate governance issues. David Jones said in a statement to the Australian Securities Exchange that chairman Peter Mason and director Leigh Clapham said they would resign within the next three months and director Steve Vamos said he was leave immediately as part of a “board renewal process”. Shareholders were concerned Vamos and Clapham bought shares in David Jones last year, approved by Mason, just days before the release of better-than-expected quarterly sales. The trades were investigated by the Australian Securities and Investments Commission, which decided not to take any action. They were further angered when it was revealed rival Myer made a $3 billion merger proposal the day before the directors bought the shares. Regional airline Rex warns aviation sector in peril Regional airline Rex is warning the aviation sector will collapse without government support, after issuing a warning that pre-tax earnings for the first half of this financial year will be 40% lower than the same time last year. Rex blamed a large drop in business travel for the decline in revenue. "We implore the Minister for Infrastructure and Regional Development to take immediate and forceful efforts to fulfil his election commitments to regional aviation outlined in the Coalition's Policy for Aviation, as many regional carriers have little time left before they face the same fate as Brindabella," chief operating officer Garry Filmer said in a statement. Markets The Dow Jones Industrial Average is marginally higher at 15,801.79 points, while the Australian dollar is buying US89.5 cents.
Some of Australia’s top entrepreneurs have some very lofty goals for 2014, ranging from selling three million coffees a week to taking eco nappies to the global market. Phillip Di Bella, founder, Di Bella Coffee Key goal: Sell three million coffees a week The goals for one of Australia’s largest speciality coffee roasting companies in Australia are lofty, to say the least. Phillip Di Bella reveals that he aims to sell three million cups of coffee a week by the end of 2014. “To do this, we’ll be focusing on growth in Sydney, Fremantle and online, while maintaining strong operations throughout the rest of Australia,” the caffeine juggernaut explains. 2014 will also see the introduction of KICK Latte (the milk version of its coffee-based energy drink Espresso KICK) and a completely new product; a ready-to-drink espresso martini, which will help fulfil his goal. Di Bella has the wheels in motion to create compelling marketing to help fulfil his goals. He’s also opening a new retail operation in Fremantle, to complement the Sydney and Melbourne roasting warehouse. “I’ve always believed in goal setting, because it enables you to have a forward-thinking vision of your professional, personal and family life. Without a clear vision, you end up travelling blind.” Janine Allis, founder of Boost Juice and managing director of Retail Zoo Key goal: Integrating a new brand This hugely successful entrepreneur purchased South Australian Italian-style café Cibo in 2013, which means her main project for 2014 will be integrating this new brand into parent company, Retail Zoo. Allis explains she will achieve this by creating a clear strategy with great people to execute the solid plan, which is under development. “One thing you find in business, particularly when you’re the leader of a business, is that often you need to run ideas by someone else, and it’s difficult to find other people in your similar position. “This is where an organisation like the Young President’s Organisation comes into its own. We have a forum system, where we have a confidential meeting once a month to discuss issues and challenges within a business.” Carolyn Cresswell, founder, Carman’s Fine Foods Key goal: Increase brand awareness The multi-million dollar muesli company exports to more than 30 countries, but owner Carolyn Cresswell says there’s definitely room for growth in 2014. She’s set the goal of increasing brand awareness by 10% in 2014, saying people won’t buy your product unless they’ve heard of your brand, making awareness vital for business growth, she says. “We’re currently doing a big piece of research to work out what worked and what didn’t in 2013 so we can learn from the past and do the best we can to raise awareness in the most cost effective way next year.” Kate Cotton & Louise Ferguson, founders, Skinny Tan Key goal: Grow retail sales The Skinny Tan brand gained international success when the founders appeared on hit reality TV BBC show Dragon’s Den, in which entrepreneurs pitch their business ideas to a panel with the money and power to make their business dream a reality. The brand of skin smoothing and cellulite smoothing self-tanner is on the shelves of Priceline and Terry White pharmacies, along with independent chains, with plans to launch into the grocery retail sector next year. Rapid sales growth is now the key goal for next year, with the pair aiming to get the Skinny Tan brand onto the shelves of every big pharmacy retailer in Australia and the UK in 2014. “By being in both hemispheres, it will also give us an all year round summer to summer peak season for the brand,” Ferguson says. “After six months of planning, we believe everything is in place to hit these goals from February to July in 2014.” Dean Ramler, CEO and co-founder, Milan Direct Key goal: Expand the range The hugely successful online furniture retailer will grow the range next year, adding more ‘fun’ products in 2014. Milan Direct has just added an ‘adventure’ category to its offering, which incorporates camping furniture and gear, luggage, travel accessories, backpacks, bags and more. Ramler says he’s inspired by the biggest online retailers in the world and always looks for ways to improve the product range and offering. “At the end of the year, as always, we take in all feedback from our customers to look at ways we can learn and improve our offering and business and make any necessary changes. “We plan to keep creating new businesses within our business. In 2014, expect to see a lot more ‘fun’ products added to the range.” Lachlan Laing, managing director, Ecoriginals Key goal: Expand export markets After more than two years of an intense research and development phase, it’s time to meet some heady sales targets set by the eco nappy company. Laing says the marketing to support this growth phase is in place to ensure the brand can penetrate markets via online and in stores across the country. Part of the marketing plan involves connecting online with new customers, which is becoming more and more important to brands wanting to grow their presence, he says. “As a challenger brand in the heavily controlled nappy market in Australia, we intend on achieving big targets through proven sales avenues like online, small and large retailers and looking at overseas distribution channels,” Laing says. Ecoriginals will also launch at least two new eco products for parents in 2014-2015. “Not only is our price competitive, but we have cutting-edge biodegradable technology included in our products, such as 100% compostable packaging.” Eugenie Pepper, owner, PLUM baby & kids fashion Key goal: Remain ahead of schedule Discovering that one of her manufacturers in China had recently gone bankrupt has taught Pepper not to put all her eggs in one basket. 2014 will be spent spreading the load of production of Plum garments so one supplier isn’t being relied upon too heavily. Pepper admits it could have been much worse. “We’ve now sourced manufacturers that are able to turn around our garment in a much shorter timeframe, so we will now have a lot more time up our sleeves.” Pepper has revitalised the loved and trusted brand, with sales doubling in the past 12 months due to a more dynamic approach to running the business. The brand has also forged stronger relationships with retailers, which has led it to working with David Jones to produce new product lines as well as doing baby accessories for Big W. Exports have also grown substantially. This means that ramping up production in 2014 will be paramount. “We believe in transformation of production and business processes is an important factor for growth and development. “We’ve achieved this through hard work, staying in touch with our markets’ needs, persuing new markets and creating a new and better perception of the brand.”
Australian online custom shoe design company Shoes of Prey has won gold at the World Retail Awards in Paris for store design. Shoes of Prey co-founder Jodie Fox told StartupSmart from China, where she’s working with the company’s product team, the win was a “wonderful coup”. “There won’t be many times in my life I can say I beat Karl Lagerfeld,” she says. Located on the fourth floor of upmarket department store David Jones in Sydney’s CBD, the store has been outperforming expectations in the nine months since it opened, Fox says. “It’s really proven itself,” she says, adding that the company is excited by its possibilities, although plans to roll out more physical stores were yet to be confirmed. The store was designed by retail specialists The General Store and beat the Puma flagship store in Osaka, Japan, and a Karl Lagerfeld concept store in Paris in the less than 1200sqm award category. Strategy partner at The General Store, Matt Newell, told StartupSmart his team approached the design in terms of creating an experience. “I said to Jodie the last thing I will give you is a beautifully designed store. We wanted to present an experience,” he says. The Shoes of Prey store is just 29sqm in size and dominated by a 2.4 metre high flower made out of the company’s shoes by set designers from the Australian Ballet and includes many of the materials used to make the shoes. It features a table finished with soft black leather, chairs made with a range of materials like suede and stamped patent leather, a “signature scent” and “custom-composed” soundtrack that includes the sounds of high heels clicking and Fox’s cat purring. Newell says he hopes the Australian retail industry will consider the importance of multidisciplinary teams when it comes to retail design and “goes for it” in future. “Australian retailers have this terrible tendency to travel around the world and steal ideas from (British supermarket chain) Tesco and bring it back and do it half as well,” he says. “We’re so focused on what the rest of the world is doing, we should be backing ourselves. The creative talent in Australia is off the charts.” Shoes of Prey chief executive Michael Fox said in a statement: “This is our first foray into physical retail, so winning ‘Store Design of the Year’ at the World Retail Awards is an incredible achievement for our team.”
Prime Minister Julia Gillard warned about the “significant legal risks” of compulsory arbitration in a confidential 2010 letter to the ACTU, leaked to The Australian. The letter points out the government’s view at the time was that fair Work Australia should not be given new powers to settle disputes about national employment standards or modern awards by creating new rights, with such powers bringing the risk of a constitutional challenge. “Such a challenge would take time to be resolved and this in itself would create significant undesirable uncertainty around the validity of agreements, the bargaining framework and the (Fair Work) Act as a whole,” Gillard warned in the letter. Coles planning to shelve independent field agents Coles is considering a radical plan to sideline independent field agents by licencing a small number of agents with agreed fees that would deal with suppliers and the supermarket. “One area suppliers tell us we could improve is how we work with their field force teams – reps they employ to support their brand in-store,” a Coles spokesperson says. “So we are currently exploring options to make this service better for suppliers, better for our stores and most importantly better for customers.” Retailers embrace UnionPay in a bid for the $800 million Chinese tourist market A growing number of retailers including David Jones are embracing UnionPay, a bank card system favoured by middle class tourists from China, with $800 million expected to be spent through the payment system this year. “Overseas merchants pay careful attention to Chinese consumers. For example, foreign visitors are responsible for a significant portion of consumer spending in Australia and the Chinese are the most important part of this group,” UnionPay chairman Su Ning says. “We have long recognised that as retailers we are competing internationally and the ability to tap into the lucrative Chinese markets is a great strategic advantage for us,” David Jones chief executive Paul Zahra said. Overnight The Dow Jones Industrial Average is down 1.4% to 15,115.57. The Aussie dollar is steady at US96.24 cents.
The latest data for online retail sales have shown once again the digital world is faring better than bricks-and-mortar, providing some hope despite recent lacklustre industry results. The results from NAB comes alongside complaints earlier this week from the retail industry that an unseasonably warm autumn has caused a build-up of winter stock among some retailers, which will be forced to sell at a discount. The latest NAB statistics show Australians spent $13.5 billion online in the year to April, equivalent to about 6% of bricks-and-mortar spending. After a dip in March, April recorded 23% growth year-on-year for online sales, with the strongest growth recorded in fashion, daily deals and media – three industries which have typically recorded strong online spending. Strongest spending per capita was recorded among those aged between 25 to 54 years old, with residents in the Australian Capital Territory, Northern Territory and Western Australia. Regional WA has recorded the highest growth rate for per capita spending. NAB chief economist Alan Oster said in the bank's report it was "encouraging" to see a gradual lift among retail sentiment in April, and noted online sales represent 6% of all spending, up from 5.2% at the same time last year. "While we're seeing businesses take a multi-channel approach by developing an online presence alongside a traditional storefront, growth rates among businesses remains mixed," he said. "However, encouragingly, online sales have grown by over $2 billion in the past year, evidence that retailers are becoming more sophisticated in how they engage with their customers." Based on the share of spend, department and variety stores took the biggest slice at 36%, which coincides with David Jones' announcement this week that online sales have continued to grow well. Homewares and appliances followed at 18%, followed by groceries and liquor at 14% and media at 11%. Games and toys were the smallest group for total spending, at just 2%. Once again, domestic retailers dominated spending with 72% of all money spent, slightly below the average level of last year but above the low of 71% in July 2012. But the growth in spending isn't the only positive. Telsyte senior analyst Sam Yip told SmartCompany not only is spending increasing, but average spending has increased as well. "We're seeing the average price point increase, so we're seeing people spend more on high-price travel deals and restaurants and so on." Daily deals sites, which are regularly some of the most popular online retail destinations, have been experimenting with more pricey travel products. Yip also points to the share of spending being directed towards department stores, saying while the increase in spending is encouraging, department stores still lag behind the rest of the industry. "It is encouraging, but the scale is quite small. These sorts of companies need to realise they can operate significantly differently from their bricks-and-mortar operations." "Once you move online, it's all about range." This story first appeared on SmartCompany.
David Jones has revealed its sales in the quarter to April have slumped 2.2% year-on-year to $391 million while same store sales fell by 3.4% $386.2 million, with the retailer blaming unseasonably warm weather between January and April for unusually slow fashion sales. However, David Jones chief executive Paul Zahra is continuing to back a strategy of avoiding price discounts, claiming that retreating on the policy would damage long-term shareholder value. “I can easily turn sales on by discounting, it's not difficult, not complex, but we chose not to do that on … low-margin categories just to get a top-line sales number. It's about the profit and that's what investors will be looking for,” Zahra said. Ten hopes event TV will reverse declining fortunes Ten chief executive Hamish McLennan has announced a strategy of using ‘event TV’, including live sports, news and reality TV series, in a bid to prevent viewers time-shifting. “Live sport doesn't get time-shifted, and we will have a greater focus on news, and big franchises like Australian Idol. That's why you're now seeing a strong commitment from advertisers for upcoming programs on Ten like The Bachelor,” McLennan said. The broadcaster will also switch away from its traditional target demographic of 18-to 49-year-olds after noting declining TV viewership at the younger end of its demographic, with the network instead targeting people aged 25 to 54. Huawei calls for greater transparency around cybersecurity John Suffolk, the global cyber security officer at telecommunication equipment giant Huawei, has called on governments and businesses to be more transparent in reporting cybersecurity breaches. "Businesses are generally saying that if they have to report breaches, they don't want to be penalised for being honest. They don't want shareholders or governments to think worse of them because they are worried that reporting breaches could negatively impact their business. So what's happening is government and business is staying silent," Suffolk said. "But I think we need more transparency. In Europe, the European Commission is trying to bring in mandatory breach reporting." Overnight Wall Street was closed on Monday for the Memorial Day holiday. The Aussie dollar is down to US96.38 cents.
The manufacturing arm of the Byron Bay Cookies has been placed into voluntary administration.
Small retailers have no choice but to emulate the fast turnaround times of the major chains, says an industry expert, amid rumours UK fast fashion chain Miss Selfridge is coming to Australia.
Gourmet biscuit producer Byron Bay Cookies intends to go global with its franchising model, after establishing six Australian stores, and is looking for franchisees to fuel its expansion.
Mining giant Rio Tinto has reported a $US2.99 billion loss for 2012, with chief executive Sam Walsh admitting the mining giant has demonstrated “poor judgement” in the past.
Over the weekend, the renowned make-up artist and cosmetic company entrepreneur Napoleon Perdis caused quite a stir with the common sense suggestion that department stores could reverse their flagging fortunes by investing in their staff.
For many people, the Mayan end-of-the-world prophecy is simply a hyped-up event that will come and pass without notice, just like every other prediction of its kind.
It’s October and already retailers are adorning their shop fronts with Christmas paraphernalia. In fact, David Jones has been selling Christmas trees and decorations since mid-August.
Sisters Fiona Pearse and Emma Cronin withstood a death threat and having their car tyres slashed in the lead up to the launch of their three-hour delivery site WantItNow yesterday.
Start-ups should take note of the customer service “sins” committed by major retailers such as Harvey Norman, which received the poorest feedback in a ‘shadow shop’ conducted by Choice.
The collapse of an iconic South Australian book retailer has highlighted the bleak nature of the bookselling market, which is propped up by a growing number of independent retailers, experts say.
A Sydney entrepreneur is close to a multi-million dollar capital raising for a start-up that was conceived, attracted big name clients such as Ralph Lauren and Sportsgirl and launched all in less than a year.
In the wash-up from Darrell Lea, it may be timely to reflect on the first lesson of business: Keep your finger on the pulse and your eye on the bottom line, and do both at the same time.
Public support for the carbon tax has hit a record low, according to a new poll, as both main political parties crank up the rhetoric on the scheme, which launched yesterday.