WEBVTT - ‘Occupy, dominate, and defend’: Briscoe Group’s growth plan 0:00:03.400 --> 0:00:06.440 Gotta Koto. Welcome to Shared Lunch. I'm Garth Gray here 0:00:06.440 --> 0:00:09.799 in Morningside in Auckland at the headquarters of the Brisco 0:00:10.000 --> 0:00:15.200 Group that's Brisco's and Rebel Sport Homewares and Sportswear, a 0:00:15.360 --> 0:00:19.280 retail powerhouse. And at the head Rod Duke, a man 0:00:19.280 --> 0:00:23.200 who's been running retail for thirty five years. What are 0:00:23.200 --> 0:00:26.080 the challenges he sees ahead? Are we going to make 0:00:26.079 --> 0:00:28.560 a recovery from this cost of living crisis? And what 0:00:28.680 --> 0:00:31.680 opportunities has he been able to ring from the trade 0:00:31.720 --> 0:00:34.920 war between the US and China. How does he see 0:00:34.920 --> 0:00:37.320 the future coming? Will lie ahead inside to find out. 0:00:37.360 --> 0:00:39.720 Here's some important info you should always keep in mind. 0:00:39.880 --> 0:00:42.479 Investing involves the risk you might lose the money you 0:00:42.520 --> 0:00:45.800 start with. We recommend talking to a licensed financial advisor. 0:00:46.520 --> 0:00:50.360 We also recommend reading product disclosure documents before deciding to invest. 0:00:50.600 --> 0:00:53.159 Everything you're about to see and here is current at the. 0:00:53.080 --> 0:00:53.880 Time of recording. 0:00:54.440 --> 0:00:57.440 First, thanks for inviting us here today. I mean, I 0:00:57.520 --> 0:01:00.440 know you are all about the deal, knowing what the 0:01:00.480 --> 0:01:04.240 customer wants, and so in that view, we've asked some 0:01:04.319 --> 0:01:06.280 of our customers, some of our listeners, some of the 0:01:06.319 --> 0:01:09.080 people that tune into the podcast regularly what they would 0:01:09.120 --> 0:01:11.120 like to ask you, And I've got a couple of 0:01:11.120 --> 0:01:15.440 those questions right here. What's the key indicator of how 0:01:15.440 --> 0:01:19.520 the economy is related to retail? Like, as there are 0:01:20.120 --> 0:01:22.880 a product somewhere on the shelves where when that goes nuts, 0:01:23.240 --> 0:01:24.920 you go things are doing well. 0:01:25.000 --> 0:01:27.000 No, there's probably not a product, but there's probably a 0:01:27.080 --> 0:01:30.560 number of product categories, not one particular. And look, our 0:01:30.959 --> 0:01:34.640 summary of whether or not the economy's buoyant or poor 0:01:35.360 --> 0:01:39.400 is the propensity of people to shop. If they tighten up, 0:01:39.680 --> 0:01:43.960 don't want to shop, there's nothing they want to buy. 0:01:44.240 --> 0:01:45.200 You know you're in trouble. 0:01:46.560 --> 0:01:49.520 So how have you been able to deal with competition 0:01:49.640 --> 0:01:52.080 while also staying true to your core values. 0:01:52.720 --> 0:01:54.720 Look, I think you're going to go all the way 0:01:54.760 --> 0:01:58.120 back to nineteen eighty eight when we sat down and 0:01:58.160 --> 0:02:03.960 we were a quasi seller of toys hardware merchants. I 0:02:04.000 --> 0:02:06.920 sat down then with the key people in the business 0:02:06.920 --> 0:02:08.960 and said, look, the position that we find ourselves in 0:02:09.040 --> 0:02:12.560 right now is unsustainable. There's terrific hardware merchants out there 0:02:12.680 --> 0:02:15.880 selling hardware. The toy business that we're in, which is 0:02:15.919 --> 0:02:17.720 a thirty day business and so we had a look 0:02:17.760 --> 0:02:20.240 at the landscape and figured out which piece of that 0:02:20.280 --> 0:02:26.520 retail landscape we could occupy, dominate and defend. And the 0:02:26.560 --> 0:02:30.360 piece that we found that was vacant was really good 0:02:30.480 --> 0:02:34.919 quality product, really good price. And so we thought, okay, 0:02:35.040 --> 0:02:37.640 let's go out there and get all the famous brand 0:02:37.720 --> 0:02:40.840 names in the categories that we want to operate in, 0:02:41.600 --> 0:02:43.840 and that's what we'll sell. Because look, at the end 0:02:43.880 --> 0:02:49.280 of the day, the rich and middle income folks always buy, 0:02:50.080 --> 0:02:53.520 you know, real good quality product. So that was the 0:02:53.520 --> 0:02:57.720 core of where we thought we ought to sit. We 0:02:57.800 --> 0:03:00.600 believe we could defend that position, and here eight years on, 0:03:01.560 --> 0:03:03.360 we've managed to do it. And we've done it. We're 0:03:03.400 --> 0:03:06.480 now with two brands with two different categories of merchandise 0:03:06.800 --> 0:03:08.600 and two different brands of stores. 0:03:08.520 --> 0:03:13.720 Home, whar and sports where Yeah yeah, yeah. So is 0:03:13.720 --> 0:03:16.480 there a secret to success in the business in this economy? 0:03:16.600 --> 0:03:19.200 I think if you're predictable, I think if you're trustworthy, 0:03:19.520 --> 0:03:22.240 and I think if you're very, very community located so 0:03:22.320 --> 0:03:26.000 people don't have to go to great lengths to shop 0:03:26.040 --> 0:03:28.519 with you, that's probably a pretty good start. I would 0:03:28.560 --> 0:03:28.959 have thought. 0:03:29.080 --> 0:03:31.959 I tuned into your AGM. I heard a great quote. 0:03:32.080 --> 0:03:34.400 I just want to share with everybody. Retail is like 0:03:34.960 --> 0:03:39.600 crossing a tightrope, juggling flaming tortures while riding a Uni cycle. 0:03:40.200 --> 0:03:42.120 That was your chief financial officer, wasn't it? 0:03:42.160 --> 0:03:43.520 And bang on it was? Yeah? 0:03:43.800 --> 0:03:44.680 Did he get that from you? 0:03:45.280 --> 0:03:47.840 No? No, No, regrettably it is good it. 0:03:48.120 --> 0:03:49.480 I was sort of struck by that. I mean, he's 0:03:49.520 --> 0:03:52.560 talking about I think, if I understand it right, the 0:03:52.600 --> 0:03:54.640 dilemma of trying to sell as much as you can 0:03:55.440 --> 0:03:58.160 but also make as much as you can from it. 0:03:58.240 --> 0:04:00.520 And when I sort of looked, you've had to pull 0:04:00.600 --> 0:04:02.880 your gross profit back how much you're making of this 0:04:03.560 --> 0:04:06.040 by about I think it was about turn the basis 0:04:06.040 --> 0:04:09.480 points about two percent down to about forty percent, just 0:04:09.520 --> 0:04:13.920 in order to keep the sales flat last year. Tell 0:04:13.960 --> 0:04:16.080 me about that typewrote walk. How do you make those 0:04:16.080 --> 0:04:16.960 sorts of decisions? 0:04:17.600 --> 0:04:20.240 It all starts with being able to buy the right 0:04:20.279 --> 0:04:22.400 merchandise and buy it at the right price. If you 0:04:22.480 --> 0:04:27.080 do that, then you've got to build of leeway to 0:04:27.120 --> 0:04:30.000 compensate for some of these poor times that come around 0:04:30.040 --> 0:04:33.320 from time to time, and sometimes these poor times last 0:04:33.560 --> 0:04:37.120 weeks and sometimes months, sometimes the season. They very rarely 0:04:37.200 --> 0:04:40.359 last for the period they've lasted this time, and so 0:04:41.360 --> 0:04:44.799 you know when people are resisting spending money and shopping, 0:04:45.720 --> 0:04:48.760 you know there's always a proportion that will. So it's 0:04:48.800 --> 0:04:51.800 really important that you're able in some way to get 0:04:52.680 --> 0:04:55.280 a bigger chunk. It's been like a day fishing. If 0:04:55.320 --> 0:04:57.760 the fish and are feeding, sometimes you got to change 0:04:57.760 --> 0:04:59.880 your bait, and sometimes you got to change your possession. 0:05:00.080 --> 0:05:04.000 Sometimes you're going to change things up to get a 0:05:04.320 --> 0:05:07.640 good chunk of those that are shopping. And so that's 0:05:07.680 --> 0:05:09.240 the skill I think that's embedded here. 0:05:09.720 --> 0:05:11.679 The world's are washed with all of this news about 0:05:11.720 --> 0:05:15.200 tariffs and so on. I read that pretty much hot 0:05:15.240 --> 0:05:17.279 off the back of the Liberation Day and all that 0:05:17.360 --> 0:05:19.800 kind of thing. You had your entire buying team up 0:05:19.839 --> 0:05:21.440 in China for a couple of weeks. 0:05:22.160 --> 0:05:23.960 What did they see? What did they tell you? They 0:05:24.000 --> 0:05:28.480 saw some panic stricken factories because as you imagine, a 0:05:28.520 --> 0:05:30.400 good chunk of what's made in China goes to the 0:05:30.520 --> 0:05:36.200 United States, and so the American suppliers were simply saying, 0:05:36.920 --> 0:05:40.960 do not ship. I'm not paying one hundred and forty 0:05:41.000 --> 0:05:43.919 five percent tariff when it lands on the dock, so 0:05:44.080 --> 0:05:46.040 don't ship it because I won't be paying for it. 0:05:47.160 --> 0:05:50.279 And so you've got factories in China sitting on mountains 0:05:50.279 --> 0:05:53.680 of stock, not knowing when they're going to ship the 0:05:53.760 --> 0:05:58.560 next consignment. And at the same time, we're saying, I'm 0:05:58.600 --> 0:06:01.880 here with a bag full of cash, and I want 0:06:01.880 --> 0:06:06.320 to take it now, but I want a better price, right, so. 0:06:06.360 --> 0:06:08.080 There were a few bargains to be had when you 0:06:08.160 --> 0:06:11.360 went shopping, your team went shopping. We'll see that turning up. 0:06:11.440 --> 0:06:11.800 Yeah. Sure. 0:06:13.200 --> 0:06:15.640 Does that then mean you pass that on or are 0:06:15.640 --> 0:06:18.520 you using that as a hedge against uncertainty or you're 0:06:18.560 --> 0:06:20.280 just looking at whatever the conditions are at the time 0:06:20.279 --> 0:06:21.120 when the stuff arrives. 0:06:21.200 --> 0:06:26.360 A bit of all that. We have a particular style 0:06:26.480 --> 0:06:28.760 or grade of product that we buy, and there's other 0:06:28.760 --> 0:06:31.960 folks in the market who buy a lower grade, and 0:06:32.200 --> 0:06:34.360 other folks that buy a very very very low grade. 0:06:34.480 --> 0:06:37.960 So we don't always always buy exactly the same merchandise, 0:06:38.720 --> 0:06:41.680 and so it largely depends for us anyway, It largely 0:06:41.720 --> 0:06:45.560 depends on the on the strength of the competitor set 0:06:46.040 --> 0:06:49.400 that determines, you know, what, what you're able to, what 0:06:49.440 --> 0:06:50.440 you're able to sell at. 0:06:50.680 --> 0:06:52.520 It sounds like we need to talk about competition, but 0:06:52.560 --> 0:06:54.080 I wanted to stay in China for a little bit 0:06:54.120 --> 0:06:57.520 longer because I mean, were they waiting where they're ready 0:06:57.520 --> 0:06:59.159 to do deals straight away to get it done, or 0:06:59.160 --> 0:07:00.800 were they going hang on, We'll just wait and see 0:07:00.800 --> 0:07:01.919 how this train Chinese. 0:07:02.120 --> 0:07:04.400 Chinese want the order right now. They want to ship 0:07:04.480 --> 0:07:07.520 right now. We'll take the orders, take the LC okay, 0:07:08.080 --> 0:07:12.120 and then ship when we request. But they want firm 0:07:12.120 --> 0:07:14.520 commitments now, and if you're able to get firm commitments, 0:07:14.880 --> 0:07:15.440 they'll deal. 0:07:15.960 --> 0:07:18.480 So if we've just seen in the last little while, 0:07:18.520 --> 0:07:21.200 they've struck a deal for a pause. Now after sort 0:07:21.240 --> 0:07:23.480 of six weeks of kind of chaos and uncertainty, a 0:07:23.520 --> 0:07:26.880 different kind of uncertainty, now there's a ninety day pause 0:07:27.440 --> 0:07:29.920 and China and the US have agreed to sort of 0:07:30.040 --> 0:07:33.360 suspend the worst of some of those tariffs. Does that 0:07:33.400 --> 0:07:35.280 mean they just snap back to supplying the US and 0:07:35.320 --> 0:07:36.960 you miss out on the next round of deals or 0:07:37.000 --> 0:07:38.440 what happens. 0:07:38.560 --> 0:07:40.720 Well, look, at the end of the day, they've reduced it, 0:07:40.800 --> 0:07:43.080 and Trump to reduce it from one hundred and forty 0:07:43.520 --> 0:07:46.880 out of thirty percent, thirty percent still kills it. So 0:07:47.080 --> 0:07:49.520 thirty percent is still a bad deal. One hundred and 0:07:49.560 --> 0:07:52.680 forty five percent. They close the gates. Not the gates, 0:07:52.720 --> 0:07:56.280 it's count your business. So thirty percent is still bad. 0:07:57.000 --> 0:08:00.760 Now there'll be some merchandise in some categories. You know 0:08:01.320 --> 0:08:04.080 that the American suppliers will go. Look for the sake, 0:08:04.560 --> 0:08:07.760 the toys might be one. Toys have got to be 0:08:07.800 --> 0:08:11.640 shipped pretty soon to get there for Christmas. You can 0:08:11.680 --> 0:08:13.440 have all the toys in the world at at whatever 0:08:13.480 --> 0:08:15.800 price you like, but they land in January February, they 0:08:15.800 --> 0:08:18.800 don't sell because that business is a thirty day business. 0:08:19.880 --> 0:08:25.000 So toys might be one where the supplies go thirty percent. Look, 0:08:25.200 --> 0:08:28.000 just give it, ship it, I'll worry about I'll worry 0:08:28.000 --> 0:08:28.920 about the pricing later. 0:08:29.400 --> 0:08:31.280 So this thing has given a sort of a longer 0:08:31.360 --> 0:08:34.400 term opportunity for a business like the Brisco Group to 0:08:34.600 --> 0:08:38.440 get in there and achieve those lower costs of input, 0:08:38.760 --> 0:08:40.600 the lower costs of the product that you're bringing in. 0:08:40.679 --> 0:08:45.120 Yeah, remember the priuce reductions we've got in the order 0:08:45.200 --> 0:08:49.360 of one hundred basis points better than perhaps prior periods 0:08:50.600 --> 0:08:54.920 fifteen percent. So it's not huge price reductions, but they're 0:08:54.960 --> 0:09:00.800 significant enough to compensate for you know, PEPs current fluctuations. 0:09:01.080 --> 0:09:02.360 I was just going to get to that. Obviously, the 0:09:02.400 --> 0:09:05.760 dollar has been pretty pretty strong, the US dollar, don't 0:09:05.800 --> 0:09:07.920 kis pretty weak against it. That must have been really 0:09:08.000 --> 0:09:10.079 hurting your buying ability if you're settling in dollars. 0:09:10.200 --> 0:09:13.079 How exclusive buying currency is yours dollars and I think 0:09:13.120 --> 0:09:17.360 eighteen months ago it was about seventy three cents. Last 0:09:17.400 --> 0:09:20.400 week it was fifty nine sixty, and now it's fifty 0:09:20.480 --> 0:09:25.000 eight fifty, so it's still well below the seventy three cents. 0:09:25.360 --> 0:09:29.080 So some would argue if you get ten or fifteen 0:09:29.080 --> 0:09:32.800 percent or twenty percent discount off last year's product, last 0:09:32.880 --> 0:09:36.520 year's similar product, so you're getting a twenty percent discount, 0:09:36.840 --> 0:09:38.840 you know, fifteen percent of that has gone and gone 0:09:38.880 --> 0:09:41.800 in currency, so there's not a lot of change left over. 0:09:43.520 --> 0:09:45.400 The economy takes with one hand and gives with the 0:09:45.440 --> 0:09:47.079 other kind of things, so you've just got to try 0:09:47.080 --> 0:09:49.520 and see it over the middle, right, how's their own 0:09:49.559 --> 0:09:52.280 government you think rolling with these punches in terms of 0:09:52.320 --> 0:09:55.040 how it's responding. Do you see any anything in the 0:09:55.080 --> 0:09:56.760 air that helps it all or is there anything that 0:09:56.840 --> 0:09:57.160 can do it? 0:09:57.559 --> 0:10:02.400 The government that's in paw Are now has I think 0:10:02.440 --> 0:10:08.760 got a different set of issues. This tariff thing is interesting. 0:10:08.760 --> 0:10:12.400 But I was reading the Financial Review this morning. A 0:10:12.440 --> 0:10:17.160 lot of the Australians now are trying to just pretend 0:10:17.200 --> 0:10:19.760 Trump's not there. I don't really want to talk to 0:10:19.800 --> 0:10:22.160 you right now. I'm happy with the ten percent. Leave 0:10:22.240 --> 0:10:26.880 me alone. I'll keep dealing business with China because they 0:10:28.559 --> 0:10:30.840 they're exports of China something like two hundred and twenty 0:10:30.880 --> 0:10:33.719 billion into the United States and thirty seven so they 0:10:33.720 --> 0:10:35.920 really don't want to get into their conversation. They'd rather 0:10:36.440 --> 0:10:38.360 just hide it in a corner than just leave it 0:10:38.360 --> 0:10:43.480 at ten percent. We're probably in a similar position, I imagine. 0:10:43.679 --> 0:10:47.680 I don't imagine that our exports in the United States 0:10:47.720 --> 0:10:53.840 come anywhere near our imports from China, and so in 0:10:53.960 --> 0:10:58.280 terms of balance of trade, We're probably pretty happy to 0:10:58.320 --> 0:11:00.480 sit in the corner and cop the ten percent and 0:11:00.920 --> 0:11:05.280 stay out of Trump's sight lines, I imagine. But don't 0:11:05.280 --> 0:11:07.320 look at the goverment itself. It's got a whole bunch 0:11:07.320 --> 0:11:09.199 of other issues they've got to contend with. They've got 0:11:10.480 --> 0:11:14.120 pretty poor book they walked into. You know, it looks 0:11:14.160 --> 0:11:16.600 like we've got to pay nine billion dollars a year 0:11:16.679 --> 0:11:18.120 just to pay the interest bill on some of the 0:11:18.400 --> 0:11:20.199 some of the borrowings the previous government did. 0:11:20.280 --> 0:11:22.840 But it's a company that was a group that isn't 0:11:23.000 --> 0:11:25.559 largely encumbered by debt. I mean, you're pretty well cashed, 0:11:25.559 --> 0:11:29.640 aren't you any lending all credit facilities of the projects, right, 0:11:29.679 --> 0:11:30.840 so you've managed to stay out of that. 0:11:31.000 --> 0:11:33.480 Yeah, you're right, But we've always been a bit like that. 0:11:33.800 --> 0:11:35.319 I think it was one hundred and forty million or 0:11:35.320 --> 0:11:35.920 something in the bank. 0:11:36.520 --> 0:11:40.640 Yeah, yeah, but traditionally we don't borrow borrow money. I'd 0:11:40.720 --> 0:11:44.080 much rather save a bit and then pay cash for something, 0:11:44.200 --> 0:11:46.640 or like this, this new warehouse facility. 0:11:46.679 --> 0:11:48.960 You're looking at spending what one hundred million or something 0:11:49.000 --> 0:11:51.280 over the next couple of three years, forty million just 0:11:51.320 --> 0:11:55.360 this year to build a warehouse, Yeah, with distribution center. 0:11:55.600 --> 0:11:58.560 Yeah, you're right, it's going to do both. We made 0:11:58.559 --> 0:12:01.080 the decision we buy it. We want to own it. 0:12:01.920 --> 0:12:03.560 If I want to rent it, then someone else will 0:12:03.559 --> 0:12:06.040 be paying that. But I'll be paying two or three 0:12:06.120 --> 0:12:09.319 or four million dollars a year in rent. I've got 0:12:09.360 --> 0:12:13.320 pretty much the cash there, so we thought we're buy it. 0:12:13.320 --> 0:12:16.200 It's a strategic asset that's going to be very very 0:12:16.280 --> 0:12:20.000 valuable to us for decades to come. It's going to 0:12:20.160 --> 0:12:23.640 produce a lot of incremental profit for the group after 0:12:23.720 --> 0:12:26.160 this investment, and so we thought it was important that 0:12:26.160 --> 0:12:31.800 we owned it and ran it ourselves. And because we've 0:12:31.840 --> 0:12:34.720 been thrifty in the past, our borrowings to pay for 0:12:34.760 --> 0:12:36.240 it are going to be negligible. 0:12:37.559 --> 0:12:40.720 So you're also, I understand looking at going smaller little box. 0:12:40.720 --> 0:12:43.000 It's not big ones, right, those are the mini or 0:12:43.000 --> 0:12:46.040 the metro concept that's been talked about at your AGM. Yeah, 0:12:46.400 --> 0:12:48.640 fifteen new stores, but smaller ones? Where are they going 0:12:48.679 --> 0:12:50.960 to be? Why do that? And I suppose if I 0:12:50.960 --> 0:12:53.880 can bombard you with questions, Yeah, what were you thinking 0:12:54.600 --> 0:12:56.839 before you made that decision? What made you think? 0:12:56.920 --> 0:13:01.200 Yep, we'll go with this. We sit down periodically and 0:13:01.360 --> 0:13:06.520 do a three year review of We sit there and go, okay, look, 0:13:07.679 --> 0:13:09.800 what do we have to do the next year or two? Okay, 0:13:09.880 --> 0:13:13.240 that makes perfect sense, and then three to four years 0:13:13.240 --> 0:13:16.520 out a bit of blue sky stuff, what might be 0:13:16.559 --> 0:13:22.240 interesting to evaluate, to experiment with, just to toy around 0:13:22.280 --> 0:13:24.240 with and see whether or not of works because it 0:13:24.360 --> 0:13:28.720 smells like a good idea. That's where this smaller unit 0:13:28.960 --> 0:13:32.880 came from and so yes, we've got the strategic stuff 0:13:32.920 --> 0:13:35.199 like the DC blah blah blah all the way out. 0:13:35.280 --> 0:13:42.280 And now we look at Briscoes and Rebel Metros or Minis, 0:13:42.520 --> 0:13:46.720 their little stores in little catchments and so whilst it 0:13:46.840 --> 0:13:52.000 is you know, schedule all being well to be established 0:13:52.000 --> 0:13:56.960 in f I twenty eight, you know, we're starting to 0:13:57.000 --> 0:14:00.280 do a lot of the work now. What we what 0:14:00.320 --> 0:14:04.120 we've got right now is about around about one hundred 0:14:04.160 --> 0:14:12.360 stores in both brands, total brands, in every catchment that's 0:14:12.360 --> 0:14:17.120 got twenty thousand or less permanent residents. I think our 0:14:17.160 --> 0:14:20.320 smallest is about Taupo and they've got about twenty twenty 0:14:20.520 --> 0:14:24.080 twenty three permanent residents. But there's a lot of other 0:14:24.960 --> 0:14:30.040 spots around New Zealand where we think it would be 0:14:30.200 --> 0:14:34.640 uneconomic to put a full line Briscoes and Rebel in there. 0:14:35.240 --> 0:14:40.720 You know, about three thousand square meters one hundred car parks. 0:14:41.040 --> 0:14:45.680 You know, that's that's chunky. But at the same time 0:14:45.800 --> 0:14:52.440 there's there's catchments like Hamilton and Toweronga for example, in 0:14:52.480 --> 0:14:54.520 Twong and most of our competitors's got three or four stores. 0:14:54.520 --> 0:14:59.760 I've got one, okay, And there's development going over the 0:14:59.760 --> 0:15:03.200 bridge at Papamha and it's going to the other side 0:15:03.400 --> 0:15:07.800 at Bethlehem Way. So we want to experiment and see 0:15:07.800 --> 0:15:11.480 whether or not it would be worthwhile either planning a 0:15:11.760 --> 0:15:15.920 larger store later or slap in a couple of minis 0:15:16.000 --> 0:15:22.040 right now. So that that's Taroga Hamilton for example, almost 0:15:22.080 --> 0:15:24.680 all the shopping is done on the north side. People 0:15:24.720 --> 0:15:26.720 don't all the people don't live on the north side. 0:15:27.200 --> 0:15:30.360 People live on the southwest and east. So would it 0:15:30.400 --> 0:15:32.800 be interesting to have a look at the store in 0:15:32.920 --> 0:15:35.800 those catchments. Yeah, we think it'd be pretty interesting to 0:15:35.480 --> 0:15:38.280 have a look at that. Hamilton's not a small catchment. 0:15:39.200 --> 0:15:42.160 So this sounds a bit more of your occupy, dominate 0:15:42.200 --> 0:15:45.240 and defend your building a few outposts around your fortress. 0:15:45.440 --> 0:15:49.120 Well yeah, building a wall, perhaps not a wall, but 0:15:49.960 --> 0:15:55.680 we're putting little forts in different spots. Live in Gore. 0:15:55.920 --> 0:15:59.600 What now, They're probably not quite big enough for a 0:15:59.640 --> 0:16:04.120 full life in store for us, But would it support 0:16:04.480 --> 0:16:07.880 a smaller version of our two brands. Probably, So we're 0:16:07.880 --> 0:16:08.640 going to have a look at it. 0:16:08.880 --> 0:16:10.960 So who are you competing with at that level? Because 0:16:10.960 --> 0:16:13.640 I would have thought stacks of people are shopping in 0:16:13.680 --> 0:16:16.200 those places online. They just get it comes off the courier. 0:16:16.320 --> 0:16:18.520 That's the ship that two ships through, right. 0:16:18.600 --> 0:16:20.960 But how much do you miss? How much do you miss? 0:16:21.520 --> 0:16:23.960 We record we're doing pretty well online and it's less 0:16:23.960 --> 0:16:26.640 than twenty percent of my total volume, less than twenty 0:16:26.680 --> 0:16:29.920 percent nineteen point seven, up from eighteen point seven last year. 0:16:30.480 --> 0:16:32.880 And I'm near the top of the tree. I'm going 0:16:33.040 --> 0:16:38.040 real well. So there's eighty percent not shopping there. And 0:16:38.120 --> 0:16:41.720 I'd suggest to you that perhaps twenty percent of the 0:16:41.760 --> 0:16:45.480 twenty percent are shopping because they're nowhere near it, so 0:16:45.520 --> 0:16:49.480 they have to. So the proportions in the overall are 0:16:49.520 --> 0:16:55.720 relatively small. Okay, that wouldn't stop someone buying if they 0:16:55.760 --> 0:16:57.560 didn't live and live in they lived outside of it, 0:16:58.000 --> 0:17:01.160 buying it and using it as a click and collect place. 0:17:02.440 --> 0:17:04.200 Who are you looking at when you're competing with because 0:17:04.200 --> 0:17:05.840 I guess if you if you're looking at where people 0:17:05.840 --> 0:17:08.000 shop now, it's all over the place. People might jump 0:17:08.000 --> 0:17:10.720 on and jump on TIMU or something and get something 0:17:10.760 --> 0:17:12.560 extremely cheap and run through and that kind of thing. 0:17:12.600 --> 0:17:15.160 Are you worried about them? Are you worried about Ikea 0:17:15.200 --> 0:17:17.119 who are tuning up in this country later on this year? 0:17:17.200 --> 0:17:20.720 Or sports Direct I think they. I think the Teamurs 0:17:20.760 --> 0:17:25.879 and the Shines and those folks operate at a different 0:17:26.000 --> 0:17:30.320 end of the market that I operate in. They do 0:17:30.720 --> 0:17:34.800 meet other competitors in this country, but they don't meet me. 0:17:37.240 --> 0:17:42.320 But I'm more focused on the the Costcos and the 0:17:42.400 --> 0:17:50.840 IKEA's and other people. You mentioned sports Direct, because. 0:17:50.560 --> 0:17:52.760 They're looking at moving into this part of the world, 0:17:52.800 --> 0:17:56.720 aren't they. How Normally when a competitor turns up new entrant, 0:17:56.760 --> 0:17:58.399 they throw a lot of money around to try and 0:17:58.440 --> 0:18:01.159 draw custom. That's got to be something you have to 0:18:01.240 --> 0:18:02.520 chew on and show people. 0:18:02.640 --> 0:18:05.800 Sure, but we've got people in their stores already. I 0:18:05.880 --> 0:18:08.639 know how they operate, I know what they sell, i 0:18:08.680 --> 0:18:12.560 know the propositions. I've got a lot of stores, and 0:18:12.560 --> 0:18:14.480 I've got a lot of stores right next door the 0:18:14.520 --> 0:18:16.840 stores where they think they're going to put foot jobs. 0:18:17.359 --> 0:18:21.639 It's fine, I've got to lift my game. People. People 0:18:21.680 --> 0:18:25.520 will go to these places and experiment with them. I 0:18:25.600 --> 0:18:29.399 want people to go there and experiment a service level 0:18:30.160 --> 0:18:33.439 or quality of service that is lower than mine, to 0:18:33.480 --> 0:18:35.359 have a look at a range of product it's not 0:18:35.400 --> 0:18:38.920 even nearest significant as mine. To go into an environment 0:18:38.960 --> 0:18:43.159 that's not as comfortable as my environments. So does that 0:18:43.160 --> 0:18:45.120 mean I have to lift my game in some centers 0:18:45.560 --> 0:18:50.320 and in some brands. Yeah, it's okay, I'll do it. 0:18:50.359 --> 0:18:52.160 Sounds like you're relishing the challenge. 0:18:53.520 --> 0:18:56.360 You can't avoid it, mate, It's going to happen when 0:18:56.400 --> 0:18:58.800 you're when you're on a really really really good plot, 0:18:58.840 --> 0:19:02.600 you're doing it well and you're exit cueuting wonderfully. There's 0:19:02.600 --> 0:19:06.000 always someone sitting outside the bar bier a fence thinking, oh, 0:19:06.040 --> 0:19:08.639 I wouldn't want a bit of that. I wouldn't that. 0:19:09.000 --> 0:19:11.280 I might have a crack at that. So is he? 0:19:11.400 --> 0:19:12.119 Is he that clever? 0:19:12.880 --> 0:19:13.120 Hmm? 0:19:13.440 --> 0:19:17.480 I have a crack. Wasn't that long ago that that 0:19:18.040 --> 0:19:20.800 Rebel Sport Australia brought over one of their concepts called 0:19:24.440 --> 0:19:31.960 DFS no not DFS Boating Fishing cam bcf okay, set 0:19:32.040 --> 0:19:36.480 up eight stores, lasted eighteen months, cost him forty five million, 0:19:36.520 --> 0:19:37.320 and then went back home. 0:19:39.160 --> 0:19:41.280 You saw that as as seeing them off from the gate. 0:19:41.320 --> 0:19:45.760 Digit it's fine, that's okay. Look, I'm looking at doing 0:19:45.800 --> 0:19:49.080 the same in Australia. I want to set up a 0:19:49.119 --> 0:19:53.920 brand or buy a brand over there and compete over there. 0:19:54.520 --> 0:19:55.199 I want to do that. 0:19:57.680 --> 0:19:59.200 You've still got a lot of energy. And I guess 0:19:59.200 --> 0:20:00.880 that comes back to the question that one of our 0:20:00.920 --> 0:20:04.960 listeners and viewers had asked there, what keeps you going? 0:20:05.480 --> 0:20:08.040 No sign of your stopping? I mean, is it the 0:20:08.080 --> 0:20:12.400 love for the business generally? Is it the need to occupy, dominate, 0:20:12.440 --> 0:20:12.920 and defend. 0:20:15.560 --> 0:20:17.320 Maybe some of that, maybe all of that, maybe none 0:20:17.359 --> 0:20:20.760 of that. I don't know. I've been in the retail 0:20:20.760 --> 0:20:22.840 business since I was sixteen. I just happened to love 0:20:22.920 --> 0:20:28.800 the concept of buying something, selling something, buying plenty, selling plenty, 0:20:28.920 --> 0:20:33.359 having plenty of stores, having plenty of customers. I just 0:20:33.400 --> 0:20:36.240 happen to like the idea. I think with this business 0:20:36.240 --> 0:20:40.960 over here, it is a lot of fun. You know, 0:20:41.400 --> 0:20:45.520 it's a lot of fun building, you know, something from 0:20:45.720 --> 0:20:51.000 pretty much nothing into an organization that's really really, really 0:20:51.000 --> 0:20:57.880 well respected and successful. And it's hard to give away 0:20:58.000 --> 0:21:02.800 something or move away from something. For me anyway, if 0:21:02.880 --> 0:21:07.520 you gave birth to it, you know, it's hard. And look, 0:21:07.600 --> 0:21:11.440 I can I have to tell you I'm in a really, really, 0:21:11.440 --> 0:21:14.080 really fortunate position at the moment. I've got about three 0:21:14.119 --> 0:21:16.480 or four really really key people who have been here 0:21:16.520 --> 0:21:19.520 for a very long time, who are very, very, very 0:21:19.560 --> 0:21:21.960 clever and I'll tell you now, I don't get down 0:21:22.000 --> 0:21:25.919 there amongst the weeds as much as I used to, well, 0:21:26.000 --> 0:21:29.000 because it's not my job anymore. My job is. My 0:21:29.160 --> 0:21:33.080 job is to is the mentor, is to guide, to assist, 0:21:33.200 --> 0:21:36.320 to encourage, to do. I step into the weeds from 0:21:36.320 --> 0:21:40.720 time to time, absolutely, yeah, But I try to be 0:21:41.960 --> 0:21:45.480 a different sort of manager these days than I was 0:21:46.200 --> 0:21:48.880 because I'm not going to be here for a very, 0:21:49.000 --> 0:21:54.199 very lot longer, you know. But I'm very healthy, but 0:21:54.240 --> 0:21:56.600 I'm not going to be here a lot longer. You know, 0:21:57.040 --> 0:22:00.359 I'm past the halfway mark. I'll concede you that, okay, 0:22:01.359 --> 0:22:05.040 And so this is my legacy. I don't want this 0:22:05.800 --> 0:22:10.280 business to fail just because I go. You know, that'd 0:22:10.320 --> 0:22:13.600 be a slight on me. That'd be well, didn't you 0:22:13.640 --> 0:22:16.600 didn't do your job particularly well. You didn't train these 0:22:16.600 --> 0:22:19.159