It’s a disappointing outcome for Retail Adventures. But it’s not surprising – the company and Jan Cameron have made significant mistakes along the way. Here’s just three to be mindful of:
Back in 2009 Jan Cameron handed over $85 million for Retail Adventures. The problem was that this was simply too much.
Of course, it’s difficult to blame Cameron for paying that much before retail took a turn for the worst. But it was still a premium for a retail company, and at the time it wasn’t as if the industry was at its peak.
The problems with Retail Adventures can be traced over the past three years, but paying $85 million for a collapsed retail group wasn’t a great way to start.
It would be hard to avoid discounting when your chain is built on the idea of low prices, but Cameron’s mistake was in pursuing a discounted offer at a time when retail was already doing badly.
With margins squeezed thin, there wasn’t any room to reduce them. Over the past three years, those margins have simply gotten thinner and thinner, with the company forced to offer even lower prices and make money through moving high volumes of stock.
That obviously hasn’t worked, and it’s a key sign Cameron didn’t understand what she was getting into. Discounting is one thing, but pursuing a strategy of discounting during a period of low sales is disastrous.
Jan Cameron made some bizarre claims over the weekend about her staff, saying not only that former Harris Scarfe chief Robert Atkins had a “vendetta” against her and claiming he was sacked for sexual harassment, but that other employees had problems as well.
“Some (staff) had a strange desire to run me out of money, thinking the company would get bought by the next sucker and they could continue on with their cruisy ways,” she told The Australian.
Staffing problems will always drag a company down. An inability to complete a major review of all staff and then replace those necessary is a key factor in Retail Adventures’ turmoil – and a trend that will be crucial to reverse if it is to survive.
