EXCLUSIVE:The Good Guys Restructure,Staff Laid Off, New Merchandising Operation
Earlier this month the Company retrenched Graham Roberts’s Group General Manager of Merchandise after admitting that the group which is owned by the Melbourne based Muir Family is experiencing “an era of intense competition”.
ChannelNews understands that the Company is also looking to change the type of merchandise they stock.
An email obtained by ChannelNews that was sent to over 100 vendors and distributors by CEO Michael Ford outlined a major restructure of the Companies buying operation. He said that Geoff Reader had been appointed the new “Chief Merchant” for the struggling group.
In his new role Reader a long time employee of TGG will oversee all areas of merchandising including Buying, Merchandise Planning, Merchandise Operations, Inventory Management, Portfolio, Pricing and Private Label.
He also announced that Wayne Jennings has been appointed Group General Manager Merchandise, reporting to Geoff Reader.
Ford said that Jennings will now oversee all the categories sold by the Good Guys.
Jennings was the former buyer for the TGG Home Appliances business.
There was no mention of what had has happened to either Graham Roberts or Paul Malcolm the former AV buyer at TGG.
ChannelNews has tried several time to organise an interview with Michael Ford.
On two occasions a time was agreed with his PR advisors only for the meeting to be cancelled.
Back in 2011 ChannelNews reported that the Blackstone Venture Capital Group held discussions with the Muir family about the prospects of taking over the mass retailers. Insiders at the time claim that the Family rejected a $680M offer.
Muir Investments is owned by Andrew, his sister Carolyne and his mother Joan. The family is understood to have valued the business at the time at $1 billion. Insiders told ChannelNews last week that “The family would be lucky based on current profits to get $400M in today’s market let alone the $1B they were asking for in 2011”.
“The Good Guysmoved to a central buying operation two years ago and it is working well. What is not working is their operationasl side, which is where JB Hi Fi and Dick Smith have a big advantage” a former executive said.
We have been told that revenues in 2014 fell to now be around $2.4B.
In January 2010, the retailer announced plans to expand into the New Zealand market with the opening of five stores in Auckland.
In June 2014 the Company decided pull out of the New Zealand market citing poor returns.
ChannelNews was also told that JB Hi-Fi conducted detailed due diligence on the business in 2012 but decided to open their own JB Hi Fi Home stores which now compete head on with The Good Guys appliance business.
The electrical sector, in particular, also has been hit by price deflation, with prices for several products falling during the past year.
Back in 2011 ChannelNews understood that Muir Investments has the right to call on the shares owned by the store’s part owner/operators at a price based on a certain earnings multiple.
Today are lot of those stores are Company operated.
At the time Andrew Muir was working with boutique Melbourne-based advisory firm Helfen Corporate Advisory on a potential exit from the business that his father, the late Ian Muir, launched in 1952.