Mimmo Lubrano

What have been some of the challenges as the industry has changed?

You need to keep ahead. The challenges in this game is inventory, you have got a real big problem with inventory management. About 50% of what we do is manufactured in Miranda and 50% is imported from overseas and invariably you will always have too much inventory. You’ll overstock like crazy because when you place an order with Europe it may be made in one week it may be made in four weeks, the transit time can vary from three weeks to basically three months, it is a real X factor. You have very little control over the manufacturing and the shipping time, so you have got a big challenge with the predictability of inventory.

Cashflow was one of the biggest challenges we had in the initial stages. I remember in 1993 looking at the bank balance and basically having an argument with the bank when we needed to buy a container of olives from Greece. The bank said no way, you are not going to buy anything from Greece you haven’t got enough credit. They were basically looking at closing us up. We had an old retiring bank manager in the branch in Hurstville, and I said this is incredible, I need money to buy olives, I need a loan so I can buy the olives, pack them in jars, sell them to Franklins and get that money back.

They used to ring us daily and ask if we had any money to put in the bank and I remember my mother saying if we had the bloody money we would give it to you. That was in ’93 and that was a really bad time. It was very, very hard.

What I did was I actually moved branches, I found a more sympathetic bank manager at the time. I don’t think you could do that these days, the rules are the rules and you can’t bend the rules, but I think we were lucky at that stage we found him.

Staff is always a challenge as well. Staff can be a continual challenge but we are blessed with pretty good staff and we’ve allowed our staff to grow as well. We are not autocratic and we share everything with our staff including turnover levels and margin levels, everything. They know everything. You get to a stage where you can’t hide it anyway and you don’t want to hide it and you want to share these things with staff so they can help you make the margin. So they can understand that making margin is about keeping them in a job and I think it is a good thing that staff know about margin.

And you’ve just opened your first retail shop…

The thinking was to look at essentially at trial market to see what other merchandise can sell at retail and how our assortment of retail product is. It is a very small operation in front of our new factory. It is more of a factory outlet rather than a retail store. We’ll never take it to a Westfield or something like that as we’ll never have the critical mass, but it is a good opportunity to get rid of short coated stock, damaged stock, things like that.

And is it going okay so far?

It’s going okay, we are not going to set any great records with this because it is a very specific product range and people tend to shop for a wider range of groceries in a store like a Woolworths or Coles. Even if we opened up 100 centres as factory outlets we wouldn’t affect the sales of our products through Coles or Woolworths or their share prices.