Retail giant Harvey Norman has gobbled up 22 of Brierley Investments' failing Vox electrical and music stores as part of an aggressive expansion in Australia and overseas.
Harvey Norman picked up the stores, including the stock in trade, for an undisclosed amount and is expected to use them to strengthen its own sprawling electronics empire.
"The stores are in areas that we, at some stage or other, would have ended up opening outlets in," said John Skippen, Harvey Norman finance director. "This is an opportunity to take a group of outlets and everything in one go. It means that we can have a retail presence in those stores almost immediately."
The extra stores, eight in Western Australia, nine in Victoria and five in Queensland, will start trading under the Harvey Norman banner within the next eight weeks. The smaller ones will extend their product range to become a combination of electrical and computer outlets, while three or four larger stores will stock furniture and bedding as well. With the computer range pulling in 32 per cent of overall business, Skippen said Harvey Norman is keen to get the range into the stores.
According to Skippen, the 22 stores are collectively generating an annual revenue somewhere in the vicinity of $130 million. However, the Vox retail group, which operates 140 stores including Archie Martin in Western Australia, and Chandlers and Bill Guyatts in Victoria, is estimated to have lost the investment group about $200 million in its six years of ownership. Skippen is confident that Harvey Norman's basis of operation will turn this around with ease. "We have different ways of doing business and a highly successful format for presenting the store," he said.
The deal is second dipping for Harvey Norman, who purchased seven Archie Martin Vox stores in Western Australia in 1998 for $4 million, as well as another 10 or so stores throughout Tasmania.
Harvey Norman plans to add up to 55 stores in Australia and New Zealand inside the next three years, in addition to branching out into the untapped markets of Slovenia and Singapore.