Coles Myer
From Wikipedia, the free encyclopedia
 |
This article or section contains information about scheduled or expected future events. It may contain information of a tentative nature and the content may change dramatically as the event approaches and more information becomes available. |
Coles Myer Limited is an Australian public company which operates a number of retail chains. It is Australia's second largest retailer, behind Woolworths Limited. The company is currently preparing to change its name to Coles Group Limited after the recent sale of Myer. The name change is subject to shareholder approval at the company's Annual General Meeting which will be held in November 2006, it is likely to go ahead.
| Coles Myer Limited | |
 |
|
| Slogan | "To be Australia's number one retailer in all our brands" |
|---|---|
| Type | Public (ASX: CML) |
| Founded | As a business - 1900 As a public company - 1929 As Coles Myer - 1986 |
| Headquarters |  Melbourne, Australia |
| Key people | John Fletcher, CEO Richard Allert, Chairman |
| Industry | Retail |
| Products | Coles Supermarkets Coles Express (Shell convenience stores) Coles Central BiLo Supermarkets (Currently being rebranded as Coles) Pick 'n Pay Hypermarkets Liquorland (Soon to be rebranded as Coles) Vintage Cellars (Soon to be rebranded as Coles) 1st Choice Liquor (Soon to be rebranded as Coles) Officeworks Kmart (Soon to be rebranded as Coles) Kmart Garden Supercentre Kmart Tyre & Auto Service Tyremaster Target Target Country Target Home Harris Technology |
| Revenue | $36.6 billion AUD (2005) |
| Employees | 190,000+ (2006) |
| Website | www.colesmyer.com |
Contents |
[edit] Early History
[edit] Myer
Myer's history dates back to 1900 when Sidney and Elcon Myer opened a store in Bendigo.
In 1925, George Lindsay and Alex McKenzie started to launch stores across Victoria that sold dress fabrics, manchester and furnishings, with the first one in Geelong. They had a policy, (that is still used now) "Half the Profit, Twice the Turnover". By 1968 they had 14 stores across Victoria. Myer Emporium Ltd.(now Coles Myer), bought it and the company was renamed Lindsay's Target Pty Ltd. In March, 1973 it was renamed again, into, Target Australia Pty Ltd.
[edit] Coles
Separately, in 1914, the first Coles "variety store" was opened in Melbourne. Coles was founded in 1914 by George Coles when he opened what was called the "Coles Variety Store" in Smith Street in the Melbourne suburb of Collingwood. Expansion to more stores occurred and the chain was regarded as the leaders in providing value to Australian shoppers.
In 1960, the first supermarket was opened in Melbourne suburb, North Balwyn and in 1973, a Coles store had been established in all capital cities of the country.
Kmart Australia Limited was born out of a joint venture between G.J Coles & Coy (Coles) and Kmart Corporation in the US. The first store opened in the Melbourne suburb of Burwood in 1969.
In 1978 Coles (later Coles Myer) acquired full ownership of the Australian K-Mart operation and in 1994 bought back all shares Kmart Corporation held in Coles.
A long-term licensing agreement allows Coles Myer to use the Kmart name. Kmart New Zealand shares merchandise and branding with Kmart Australia, and is owned by Coles Myer Holdings New Zealand.
In Australia, BI-LO was established by John Weekes in Adelaide during the late 1970s. It is a major supermarket chain owned and operated by retail giant Coles Myer in parallel to Coles Supermarkets. It has more than 200 stores in Australia.
In 1996, BI-LO acquired the six-store Newmart discount supermarket chain in Western Australia which then became the equivalent to BI-LO in Western Australia. By August 2002, it grew to 16 stores before being transferred to the management and being rebranded as Coles (although there are still a number of stores carrying the Newmart brand in Perth).
Since its humble beginning, Coles Supermarket stores have expanded in size, service and convenience.
[edit] Merger
Both chains grew throughout Australia through growth and acquisitions, and both independently listed on the Australian Stock Exchange.
By the 1980s, Coles primarily operated supermarkets, whilst Myer operated a chain of mid-market department stores, as well as the Target Discount variety store chain in Australia. In August 1985, the Myer Emporium Ltd and GJ Coles & Coy Ltd merged, becoming the largest ever Australian Corporation. The official name change to "Coles Myer Limited" followed in January 1986.
[edit] After the Merger
Officeworks is an Australian office stationery store, which was established in the early 1990s by Coles Myer. Officeworks is based on the US chain Office Depot, using their concept as a one stop office store. The first Officeworks opened in the inner city suburb of Richmond in Melbourne in June 1994. Its mid-1990s TV commercials were popular, including the Taking Care of Business theme and the Back to School Savings commercial. In 1994-1995 Officeworks opened more stores throughout Melbourne in Fitzroy, Chadstone and Ringwood. Officeworks now has more than 90 stores in Melbourne, Sydney, Brisbane, Adelaide and Perth.
In 1996, Target Australia and Fosseys merged together, and their first speciality store Baby Target was born. Then in 1998, their second speciality store, Target Home opened. Their third speciality store, Target Country opened a year later. In 2001 Target Australia announced its first ever loss, to the sum of $43m. New senior management was put in place, and Target has since repositioned itself in the market from a discount department store (competing with Coles Myer stablemate Kmart and Woolworths Limited's Big W), to a stylish, value-for-money alternative to a selective store. Store fittings and layouts have been altered, and Target now competes with retailers such as Jeans West, Sportsgirl, and various other specialty stores targeted at the teenage, to early thirties market.
In 1998, Myer open the first Megamart store, in Coorparoo, Queensland.
Harris Technology was started by Ron Harris on 6th October 1986. After a trip to the USA it became apparent that the IT Retail market in Australia would be receptive to a Computer Superstore. Harris Technology opened their first Superstore in North Sydney under the Bayer Building (formerly Mann Building then Konika Building), with a downstairs call centre.
Coles Myer acquired Harris Technology on 1st April 1999.
Harris Technology has since expanded with Superstores in 5 states and a national website covering in excess of 25,000 line items (as of Aug 2003).
2001 saw Coles Myer announce plans to expand the Megamart chain of furniture and electrical stores. However, by 2005, Coles Myer announced plans to divest Megamart due to poor performance. All stores stopped trading on 13 November. Out of the nine stores, six were bought out by Harvey Norman while the remaining three are to remain closed.
On Monday 13th of March, 2006, Coles Myer announced it would sell Myer to a consortium including the Myer family, who hold a 5% stake, which is largely controlled by US private equity group Newbridge Capital, part of the Texas Pacific group. The new owners, who have also secured the freehold on the flagship Bourke Street store, have indicated that they will not radically change the business, at least in the short term, and have no plans to redevelop the Bourke Street site as this would impact too heavily on profitability during the construction period. Texas Pacific also have interests in UK department store Debenhams and high-end US retailer Neiman Marcus. Management expertise from these retailers will be used to refine Myer's approach. This sale was completed on the 2nd of June 2006 and full control has been handed over since.
[edit] Businesses
The company operates a number of chains of retail outlets, including:
- Coles Supermarkets: the second largest supermarket chain in Australia.
- Bi-Lo: a budget supermarket chain. Until 2001, Bi-Lo also had stores in Western Australia trading under the name Newmart. In August 2006 it was announced that all Bi-Lo stores would either be rebranded as a Coles Supermarket or be divested by the end of 2006.
- Liquorland: bottle shops , some of which are attached to Coles or Bi-Lo Supermarkets, but are still run separately - i.e. have their own store manager and staff. The supermarket has nothing to do with the running or control of Liquorland. Liquorland also runs hotels, through its Liquorland Hotel Group subsidiary. Other trading entities within the Coles Myer Liquor Group include "Vintage Cellars", a more wine oriented store and 1st Choice Liquor, an attempt to counter the dominance of the Dan Murphy's chain of discount wine merchants. All stores are to be rebranded to the Coles brand, probably under the new name of "Coles Liquor".
- Pick 'n Pay Hypermarket: are huge superstores which sell everything from fresh fruit & vegetables, meat, dairy, bakery and deli items, groceries, clothing, electrical appliances, hardware, white goods, sporting goods, toys, gardening etc all under one roof. There are currently two stores both located in Brisbane at Sunnybank Hills and Aspley. These stores will most likely become Coles Superstores at the end of 2007.
- Kmart: discount store, roughly equivalent to Wal-Mart stores in the United States. When opened in 1969 Kmart Australia was 51 percent owned by the US S.S. Kresge Company (later Kmart Corporation), but by 1994, Kmart Corporation had divested any remaining interest. Kmart also operates the Kmart Tyre and Auto brand, Australia's largest automotive servicing company. Until September 2006, Kmart also operated the Garden Supercentre brand, but these stores were sold off and closed at the end of September. In August 2006 it was announced that the Kmart name would be replaced by the Coles brand by late 2007. Starting from September 2007 around 40 stores, mostly former 'Super K' stores, which were divided last decade into separate Coles and Kmart stores, will become Coles Superstores. At least 20 other stores will be converted to Target stores with the remainder to become Coles General Merchandise stores.
- Officeworks: Big Box office supplies outlets.
- Target: affordable discount department stores, including clothing, manchester (linens), cosmetics, toys, electrical and electronics goods. "Target Country" is the result of rebranding of a chain formerly known as "Fosseys", and operates in country towns with smaller stores selling a subset of the range. Target Australia is not related to Target U.S.A
- Harris Technology: Information Technologies reseller.
- Coles Express: rebranded Shell service stations offering convenience stores with discounted fuel products. Before Coles Myer Ltd took over Shell service stations, Coles Express was the name used for smaller, inner-urban Coles supermarkets which are now known as Coles Central.
- Coles Myer is also a partner, with the National Australia Bank, in Loyalty Pacific, a company which administers the FlyBuys loyalty card program.
[edit] Future
- Coles Supercentres are expected to be a group of hypermarkets opening from September 2007 ( apart from one being built in an inner suburb of Melbourne). There are plans to open 80 hypermarkets around Australia in the next five years. Around 40 of these stores will be formed from former 'Super K' stores, which were divided last decade into separate Coles and Kmart stores. It is also expected that the current Pick 'n Pay Hypermarkets will become Coles Supercentres.
[edit] Corporate issues
Despite its huge presence in the Australian retail industry, the company's profitability and share price performance has been spotty since the 1985 merger. The company's ex-flagship Myer stores have struggled to cope with the emergence of "category killer" retailers in many of its specialist areas, and also with a trend away from department store fashion and back towards smaller fashion retailers.
The company tried a number of category killers of its own with mixed success. The Officeworks format was very successful, while World 4 Kids, a response to the entry of American giant Toys R Us into the Australian market, failed badly. The Megamart furniture and electrical discount stores were longer lived but never met expectations. All Megamarts were closed in late 2005, with most stores being acquired by Harvey Norman, the company Megamart was intended to challenge.
In 2001 the Company appointed John Fletcher, formerly CEO of Brambles as new CEO. This was after a long period of boardroom infighting and several management changes. Fletcher has engineered significant turnaround in the company's fortunes. His most notable changes involved the abolition of the shareholder discount card and the acquisition of the retail operations of Shell Australia. The discount card was seen to be cutting significantly into retail margins while providing little benefit to the company. It only encouraged shareholders to hold the minimum required number of shares to qualify for the card, complicating the company's share register. It was also unpopular with institutional investors as they saw their returns being eroded while obtaining no benefit from the card themselves.
The acquisition of the Shell outlets, which were rebranded 'Coles Express' allowed Coles Myer to counter the success of Woolworths' Plus discount petrol operation, which offered a discount on fuel for shopping at company stores. It was in many ways a better offer in that Coles offered discounts on a broad range of Shell's 'superior' products, including Autogas (LPG) and Optimax, while Woolworths products were more generic. This forced Woolworths to tie up with Caltex to provide a recognised brand for their fuel offer.
In August 2005, Coles Myer called for expressions of interest in purchasing the perennially underperforming Myer department store business. There was significant interest from both Australian and overseas investors, including the Myer family. On the 13th of March 2006 Coles Myer announced the sale of the Myer department store business and the Myer Melbourne CBD store to Newbridge Capital and The Myer Family Company for A$1,400 million, a sale that was completed in June 2006. Myer reported EBIT of A$67.9 million for the 26 weeks ended 29 January 2006.
Coles Myer is now only listed on the Australian Stock Exchange after delisting from the NYSE on 6 January 2006. The company was also previously listed on the New Zealand Stock Exchange (Delisted 1989) and The London Stock Exchange (Delisted ??)
