Home > Industry > JB Hi Fi Weighs Up Options After Retail Association Merger Collapse

JB Hi Fi Weighs Up Options After Retail Association Merger Collapse

JB Hi Fi is today assessing their options after the collapse of the proposed merger between the Australian Retailers Association and the Queensland-based National Retailers Association.

The big consumer electronics retailer along with Target, Bunnings, Wesfarmers’ Kmart, and the Super Retail Group, which were all members of the Retail Council before it folded in 2017.

All these retailers believe that the merger would have been a good thing for retailers in Australia who are looking for a unified voice in discussions with both State and Federal Governments as well as the media.

A unified voice has been lacking when it came to issues such as trading hours and regulations, wages, leases and tax reform for retailers said one retail executive.

Three of Australia’s biggest retailers JB Hi Fi, Woolworths and Chemist Warehouse had been involved in a sub-committee set up to facilitate the merger talks.

In 2018 the NRA lost $645,980 in 2018, after losing $807,301 in 2017, the organisation is currently buring through the $2.9 million in cash it has on its books.

The ARA a not-for-profit organisation, lost $846,373 in 2018 after making a profit of $326,804 in 2017.

This has been attributed to a major campaign to reduce Sunday penalty rates.

A Woolworths spokesman told the Australian Financial Review that Australia’s largest retailer was disappointed the NRA had decided to withdraw from the merger talks, which had been underway for almost 10 months.

“We continue to believe retailers of all sizes – and the hundreds of thousands of workers the industry supports – would be far better served by a single, united and strong national representative body,” the Woolworths spokesman said.

“This would not only provide a more cohesive and effective voice for retail, but also ensure member fees are put to better use without all the duplication of services, roles and resources.

“We’re assessing our options – including further discussions with the ARA – to determine the most effective way to ensure Australian retail has the voice it deserves.”

Woolworths has confirmed they are still in talks with the Australian Retailers Association despite the collapse of the proposed merger.

The board of the new entity would have included three representatives from the ARA, three from the NRA, two from major retailers and an independent chair. The interim chief executive would have been NRA CEO Dominique Lamb.

But the NRA pulled the plug on Tuesday, citing concerns about representation for small and medium-sized retailers and the financial viability of the new entity.

Ms Lamb said the NRA board believed a merger would have been contrary to the interests of members and reserving board positions for large retailers would have tilted the balance away from small and medium-sized retailers.

“[The board] was also reluctant to hand the NRA’s very strong asset base and financial position over to a new organisation in which you would have diluted voice,” Ms Lamb said.

“The NRA leadership is open to resuming those discussions in the future, but we will always insist that the proposed model does not disadvantage our members.”

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