Predictable.

It is possibly inevitable. When the lessons of the past are not learnt, forensically analysed and respected, history is often repeated. This is regrettable and expensive.

The recent Australian commerce landscape, retail in particular, is littered with the remnants of former high-profile, in some instances, iconic brands. Consider the Mosaic Group with Rivers, Rockmans, Millers, and Noni B, among others. Jeans West is a further example.

Such failings were not rapid. Telltale signs of financial and operational stress and inadequacies were apparent to those who study the economy, the marketplace, and sectors, particularly during the COVID-19 pandemic (2020-2022/3). Jeans West was first placed in administration in 2020.

A 10% revenue downturn wipes out most, if not all, profits for the broader retail sector. Sustained suppression places heightened emphasis on cash flows.

Knee-jerk reactive price discounting compounds the problem. If any margins remain, they are squeezed. Capital emerges as a dominant force and consideration.

Not surprisingly, small businesses (with limited capital resources) that depend on constant positive cash flows falter and fail consistently.

Medium-sized entities are caught in the Netherlands, with no inherent advantages in terms of size and flexibility. They cause the most significant economic and psychological ripples. There is no place to hide.

DIFFERENTIATE OR DIE

The retail store brands operating under the Mosaic umbrella suffered a strategic and structural shortcoming, which is common to many sectors and groupings. Disturbingly, the products, price points, presentations, and promotional themes were strikingly similar, if not identical.

The choices offered to consumers provided no differentiation or relative advantage. This is called commoditisation, which provides little or no value.

Internal efficiency, bulk buying, and integrated global and national supply chains did not equate to, or result in, competitive advantage. Read: corporate cannibalism.

The key points do not need to be laboured. They were apparent to most … but not all.

CONCENTRATE

The word concentrate is fascinating. It has multiple meanings and applications.

In the first instance, senior management needs to concentrate on customers, marketplaces, and competitors. It is seemingly easy to be distracted and disrupted. Domination of a marketplace is most readily achieved, sustained, and developed when resources are concentrated.

Advances and defence are best deployed from a concentrated base. Some may use the word consolidated.

Jeans West is a contemporary case study. It was founded in 1972 by local entrepreneur Alister Norwood in Western Australia.

By 1984, it had a statewide network of 28 stores. In essence, it was well-positioned and became non-competitive. That is, no direct competitor was able to compete.

Subsequent interstate expansion and disposal to a well-funded corporation during the 1990s exposed the network and supply chain to risk and intrusion by others enjoying an established competitive advantage.

Moreover, the west coast orientation in the trading name and house-branding did not resonate widely with consumers residing and purchasing east of the Nullarbor Plains.

The two-generation Western Australian menswear retailer, Walsh’s, had set a precedent. Its local concentrated success could not be emulated interstate. Failure seemed and materialised to be inevitable. The lesson was lost on those who should have known better.

MOVING ON

Time, fashion and commerce wait for no one. Change is constant, albeit at an accelerating rate.

Godfreys was established in 1931 and became a leading national vacuum retailer. As technology changed, Dysons in Britain evolved with cutting-edge technology, design, style, and minimisation.

Traditional vacuum cleaners evolved to be obsolete, unfashionable, cumbersome, and noticeably unappealing. The specialist retailer was seemingly collateral damage, and the bricks ‘n’ mortar stores were another high-profile closure.

Sanity’s storyline was similar. It began operations as Jetts in Packenham, metropolitan Melbourne. At its peak, it was the leading DVD and CD retail network in Australia.

Spotify, a social media phenomenon, rapidly eclipsed tangible products. There was no tolerance or demand for antiquated technology—shades of Blockbuster video stores, a faded and failed memory.

MARKETING TENET: It is better to compete with and obsolete yourself than to allow competitors to inflict the fatal blows.

In short, innovate, review, refine, recalibrate and revolutionise. That is, lead from the front. It’s a more appealing, rewarding, profitable view, vision, and philosophy.

Constantly seek, invite, and welcome external and internal questioning, as well as challenging and agitating.

ALL LESSONS APPLY

Look around. Be alert, alive, and aware. Lessons can be learnt regardless of the sector, locality, product, service, company size, and supply chain.

A steelworks in Whyalla, South Australia, quickly realised that when its primary financier, Greensill Capital, collapsed in a mountain of debt, its own time horizon was limited and rapidly enveloping. The highly geared balance sheet accelerated the pending consequences.

It was never a good idea to have the Australian Taxation Office and the state of South Australia among the biggest creditors. Their enforcement policies can be brutal and prompt.

Elevated energy costs and disrupted supply are familiar tales in the vexed national and global economies. GFG was exposed and vulnerable and enjoyed little support, even among the supporters of its sponsorship partner, the AFL football club Port Adelaide.

THE BIG PICTURE

In the 12-month period to 31 March 2025, more than 29,000 Australian businesses failed or ceased operations. Foremost among them were new home builders.

The multiplying effect among subcontractors, suppliers, professional associates and staff members was significant and will doubtlessly be long-lasting.

They were not victims of circumstances. It was and remains fundamentally and strategically inadvisable to accept fixed-price contracts when operating and supply costs are escalating, materials and skills are fractured and short on availability, and construction times are ballooning.

Regulatory approvals – red tape- are non-orally slow, complex and costly.

Australia has a major productivity issue to tend to and resolve. At the forefront is the broader construction industry, and failures extend to commercial builders.

Smaller entrepreneurial entities are not immune. Enjo was figuratively cleaned up because of the consequences of the COVID-19 pandemic. The resultant downturn in revenue, disputes with a landlord who enforced the tenancy agreements, and relatively high rents squeezed and eliminated margins. It is not always the topline that causes problems and failures.

The bottom line is affected by fixed and variable costs.

LEADERSHIP FULFILLMENT

A timely reminder.

The exponential growth in knowledge and intelligence places the totality of both well beyond the bounds of all humans.

Authentic and genuine leaders acknowledge their limitations and welcome surrounding themselves with knowledgeable people. Their primary purpose and role are to be catalysts and facilitators of knowledge diffusion.

There are countless benefits to having an integrated, contributing team with an external focus and the necessary internal disciplines to instil principles, policies, and practices that are being learned throughout the economy and marketplace.

It is a learning experience. An imperative is the need to recognise and respect the nature and need for learning and experience.

ESSENTIALS CHECK LIST

• DISCERN THE NEEDS OF TARGETED CLIENTS
• DISTINGUISH WANTS – THEY CAN BE TRANSITORY
• DELINEATE PRIMARY, SECONDARY, TERTIARY CLIENTS, USE DIFFERING MODELS/CONSTRUCTS
• DETERMINE COMPETITOR/SUBSTITUTE LANDSCAPE, POSITION EACH
• DIFFERENTIATE – BE UNIQUE
• DETAIL SUPPLY CHAIN – SHORT, NARROW, MULTIPLE STREAMS
• DISCRETELY HAVE IN PLACE SEVERAL FINANCE, CAPITAL SOURCES
• DELEVERAGE – MAINTAIN APPROPRIATE DEBT RATIO
• DEPOSIT FUNDS INTO INTERNAL WORKING CAPITAL ACCOUNT
• DOCUMENT EXIT STRATEGY, SUCCESSION PLAN, NOTHING LASTS FOREVER
• DEPLOY RESOURCES INTO CONCENTRATED FORCE
• DEVELOP CONTINGENCY PLANS – RESPOND TO CHANGE, INNOVATION, TECHNOLOGY
• DELETE OBSOLETE PRACTICES, POLICIES, PRODUCTS
• DISSEMBLE THE IMMUTABLE – NOTHING IS SACRED
• DEBRIEF – CONSTANTLY REFLECT, REVIEW, REFINE, RECALIBRATE
• DECEASE – STOP CONTEMPLATION. TAKE ACTION
• DELIGHT YOURSELF. LOVE LIFETIME LEARNING

 

 

 

By  Barry Urquhart – Consumer and Retail Analyst | Marketing Focus

 

 

BIO:

Barry Urquhart is a highly regarded market research and strategic planning consultant, recognised throughout Australasia for his insight, clarity, and thought leadership. A seasoned keynote speaker at premier conferences, Barry is also the acclaimed author of Serves You Right! And Service Please!, two of the region’s top-selling titles on customer service excellence.

Respected as a trusted voice in business strategy, Barry continues to lead influential workshops and development programs that help organisations drive sustainable growth, elevate service culture, and achieve competitive distinction.

For Media Enquiries or Speaking Engagements:
Email: [email protected]
Mobile: +61 041 983 5555

 

 

 

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