Oakbay not so good at telling its story
SO MUCH for Oakbay Investments’ new, more open and transparent policy with the media and broader public.
Not long ago its CEO Nazeem Howa held a media conference to “share some insights into Oakbay’s business model, strategy and turnover levels”. He hoped the move would help the audience understand the group’s operations and dispel some of the myths that have built up around the group.
Sadly for Howa, his exercise has done neither. Few who participated in, or studied, the engagement could say they understand the group better. And the myths pile up. Not even the promise of releasing Oakbay Investment’s maiden annual results was kept.
There was no income statement, no balance sheet, no cash-flow statement. Instead, all we got was a dribbling of select figures, which were used to reinforce the perception Howa was trying to create.
And good luck to anyone trying to contact the group’s communications people for additional information or explanations.
Things are little better over at Oakbay Resources, the listed entity. Trying to track down the group’s listed annual report — issued just weeks ahead of the end-September AGM — involves a determined game of cat-and-mouse. Those who persevere will find it under the “people and careers” tab.
And what should we make of this company managing to tick almost all of the King III boxes? If Oakbay has a good story to tell, it should be more coherent in its telling.
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R Price’s Everyday Low Price (ELP) strategy has been at the core of its phenomenal growth. During the global economic crisis in particular, the retailer gained its market share from its competitors. Consumers traded down to its stores impressed by the price and quality of the goods on offer. They chose to stay and by the end of 2010, the company’s share price had jumped 90%.
But market dynamics have changed. Consumers are again under strain but have not been lured by the old game of ELP. Other retailers are fighting tooth and nail to retain customers by discounting goods to compete with Mr Price.
With its prices already quite low, there is little wiggle room for the retailer to engage in this kind of warfare without taking a serious hit. Added to that, there has been an influx of new and foreign competition. In CEO Stuart Bird’s own words: “They have brought a new level of fashion that we are competing with, along with aspirational aspects for the customer.”
With these changes in the market, perhaps a change in strategy should be on the cards. But it is hard to see how such a change could come without compromising the company’s identity. Nick Wilson edits Company Comment (wilsonn@bdfm.co.za)
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