EXCLUSIVE: Poco Set To Be New Threat For Harvey Norman & The Good Guys
Steinhoff International, the South African Company that stuck their hand up to bid for The Good Guys, is secretly planning an assault on the Australian consumer electronics, furniture and appliance markets via a retail chain called Poco.
Owned by Steinhoff International, Poco has six stores in Australia including a large store at Blacktown in NSW, the Company is now working on having 45 stores opened within two years and up to 100 within 5 years.
Internal sources have told ChannelNews that the Company is planning to take on Harvey Norman, The Good Guys and JB Hi Fi with their bright yellow and red branded Poco stores that will sell a mix of furniture, appliances, kitchens, bedding, lighting, flooring and electrical.
ChannelNews understands that the group has been in discussions with Woolworths re the concept of turning select Masters store into Poco stores.
Described as the ‘Super Home Market’ stores Steinhoff management believe that they can take on both Harvey Norman and The Good Guys or JB Hi Fi if they acquire the The Good Guys stores.
One source said that the Company “got” a lot of intelligence when they conducted due diligence with The Good Guys management.
Currently the Company is selling Hair, Simpson, and LG appliances along with several house brand products.
Tom Kierath a retail analyst at Morgan Stanley said “In the short term Poco is not going to be a real threat. They are well funded and like Aldi who took 15 years to materialise into being a real threat they have the potential to be a threat over time”.
Another analyst who did not want to be named said “Steinhoff are a smart Company who have access to capital and funding. Their Poco brand is strong and their Blacktown store is well laid out. They could become a serious threat to Harvey Norman and The Good Guys”.
He added “They have a lot of strengths, especially in bedding, furniture and kitchens. By expanding their appliances and electrical business they could easily take on several retailers initially such as Bing Lee in NSW and as they expanded their locations Harvey Norman and The Good Guys”.
Capatalised at $31B Steinhoff International also own Freedom Furniture, Bay Leather Republic and Snooze. It’s believed that the Company was looking at a price of around $800M for the Good Guys before they chose to pursaue their Poco strategy.