There is growing speculation that the discount retailer owned by Kathmandu founder Jan Cameron is up for grabs.
According to the Australian Financial Review, Retail Adventures has been approached by potential buyers, just three years after it was purchased from private equity for $70 million.
Retail Adventures is the country’s largest discount variety retailers, and owns the Go-Lo, Sam’s Warehouse, Crazy Clark’s and Chickenfeed brands. According to its website, Retail Adventures has more than 8,000 employees, with annual sales revenue of around $1 billion.
Brian Walker, managing director of retail consultancy the Retail Doctor, says cautious consumers, online sales and thin margins are problems for discount retailers.
Walker describes the discount retail sector as unforgiving, saying not only it is very competitive, but it is also difficult to invest in.
He adds that a potential sale could be related to funding rather than trading.
Cameron, who appears on the BRW Rich 200 list with a fortune of more than $300 million, was not available for comment this morning.
A university dropout, Cameron sold the outdoor wear retailer Kathmandu for about $330 million to private equity in 2007. The business was listed on the sharemarket in late 2009; its shares are currently trading below its listing price of $1.70 amid a tough retail environment.
Cameron raised a few eyebrows afterwards by suggesting she was considering a chain that would compete with Kathmandu, at lower prices.
Smart Company is a sister publication to The Mandarin, catering to Australia’s entrepreneurs, small and medium business owners and business managers.
