Telco giant Vodafone is continuing to consolidate its retail base, announcing the end of the Crazy John’s brand after acquiring the chain just over four years ago, with the intention of moving stores under its own name.
The decision signals an end to one of the most successful chains in the telco market, which entrepreneur John Ilhan built over more than a decade and a half before his death from a heart attack in 2007.
The move also comes as Vodafone heads into a challenging year, as it switches on 4G services behind the other two large telcos and attempts to convince more customers to stay on its recently upgraded network.
It also comes as Vodafone continues to shut poorer performing stores in a bid to ease its financial woes. SmartCompany hears the business will look to close as many as 60 stores, although the company wouldn’t confirm this figure when contacted.
The Crazy John’s brand has had a tumultuous history. IIhan built the company into a chain with more than 100 locations and more than 700 employees.
He had big plans for Crazy John’s at the time, telling SmartCompany he wanted to investigate ways to explore mobile payments.
“Crazy John’s will be bringing to Australia new innovations in mobile technology in the very near future never before seen in this country. So watch this space,” he said.
Following Ilhan’s death, his wife, Patricia, sold her 75% stake in the company to Vodafone for $150 million. The other 25% belonged to several players, including NAB’s private equity arm. Over the past four years, hundreds of staff have been lost and locations closed.
In a statement, Vodafone said the decision wasn’t easy, but “necessary to remain competitive and to ensure we focus our investment where our customers and people will benefit most”.
The Crazy John’s locations which aren’t closed will be rebranded into Vodafone stores. The last Crazy John’s outlet will close on February 20.
The closures are part of a move to keep Vodafone alive. Last year the business booked a half-year loss of $131 million, in the six months to June. The business has also shed 178,000 customers due to network issues.
Brian Walker, managing director of the Retail Doctor Group, says while it can be a good move to operate multiple brands, it ultimately won’t work if you can’t sustain them.
“I’m not sure in hindsight that Vodafone was geared to support those types of offers,” he says.
Walker points to the acquisition of Hutchinson Telecommunications, which provided Vodafone with the Three brand and then Vodafone’s dumping of Three. He suggests the company should have held onto Three’s low-cost offer instead.
“They had a nice niche, in my view.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
