Record profits, nine years in a row: How Briscoes does it
When Rod Duke bought Briscoes 30 years ago, New Zealanders loved the ‘‘cheap and cheerful’’ approach to home decoration.
Times have changed. Briscoe Group, encompassing Briscoes, Rebel Sport and Living and Giving just reported its ninth record profit on the back of ‘‘house proud’’ Kiwis on the hunt for internationally renowned brands.
‘‘New Zealand has changed,’’ Duke said. ‘‘The desirability and affordability of very well-known, quality products has made cheap and cheerful not as attractive as it once was.’’
While the housewares and sporting goods market in New Zealand has grown overall, the Briscoe Group market share had grown disproportionately, Duke said.
‘‘I think for us it has been all to do with desirability – the desirability of merchandise and the promotions put on.’’
Briscoes dates back to 1861 and was a wholesaler for much of the following century. By the 1980s it was struggling and its Dutch owner sent Duke to ready it for sale.
But Duke saw the company’s potential and bought the company himself in 1989, taking it public in 2001.
His family trust and interests continue to be the main shareholders, with a 78 per cent stake in the company.
Duke’s original investment included 20 stores. Revenue was $20 million but they were losing $2m a year.
Briscoes now has 90 outlets across its three chains and over the last year made a profit of $63m after tax.
Duke said key to the success of Briscoes was introducing global lifestyle brands such as Royal Doulton, Jamie Oliver and Nike and selling them cheaper than competitors did.
Until recently, these high-end brands had been too expensive for Kiwi shoppers, he said. But by buying direct from the brand owners, Briscoes has been able to reduce prices to align with Kiwi wallets.
The budget-conscious were able to
‘‘Listen, I am a very, very greedy fella and I love really, really happy customers.’’ Rod Duke
‘‘trade-up’’ and buy well-known brands at a lower price. At the same time, wealthier consumers only had to be convinced to change retailers to find on-trend goods, he said.
In the face of increased competition from the likes of Kmart and The Warehouse, and the extensive availability of branded goods online, Briscoe fostered customer loyalty and found ways to maintain growth.
‘‘Listen, I am a very, very greedy fella and I love really, really happy customers because I figure, if I do that for you the chance of you coming back and shopping with me again is really high,’’ he said.
Online sales were increasing, now making up $70m of annual turnover.
Duke said the brand awareness helped customers feel comfortable buying online and the company planned to redevelop its digital platform this year.
However, a ‘‘gyrating’’ New Zealand dollar as well as substantial movements in the cost of food, power, heat, light and petrol would shut spending down quickly, he said.
Chris Wilkinson, managing director of First Retail Group, said Briscoes owned the homewares retail category.
‘‘They are the first to come to mind for customers, they get the first bite of the apple in terms of sales,’’ Wilkinson said.
‘‘They also transcend demographics – they are not focusing on one group of people.’’
Wilkinson said one advantage was that Briscoes had also created its own brands by teaming up with celebrity chefs.
‘‘In terms of stores like The Warehouse and Kmart, they are moving away from established brands. So for consumers, there is some uncertainty around what they are buying,’’ Wilkinson said.
‘‘Briscoes, however, have brands people can validate. If you are buying a home brand from other stores, well, you just don’t know.’’
Now personally worth an estimated $750m, Duke is still eyeing expansion, and he very much regrets the one that got away.
‘‘A couple of years ago, we attempted to buy Kathmandu. We ended up with 20 per cent; I would have loved 100 per cent but I am not in the habit of just paying a ridiculous price because someone thought it was worth it. But that said, I regret not getting Kathmandu.’’