Hi allI dont and never have owned any HVN. I am however a great...

Hi all

I dont and never have owned any HVN. I am however a great consumer and most of my purchases are now made online. I am also a 50 year old luddite. that does not stop me finding the best deal inside or outside Australia. I suspect I am well behind other smarter younger consumers. I also suspect as time moves on we will all be smarter and wiser as to where to get the best deal.

The problems for HVN are many in my view, and some are shared by other Australian retailers. The major problem is cost of operation in Australia. it staggers me how these guys are not making a lot more money on the price of their products. The problem is our costs are well and truely out of control. The cost problems are not just the value of the AUD - although this is a major problem, also are ;
wages
wage related taxes
property rent
GST.

This all adds up to a position where offshore competitors, and those better structured for an online world ( Kogan etc) are able to operate profitably and HVN cannot compete. The HVN online is simply the same as their in store. No wonder he is not getting sales traction!

In HVN's case it is even worse because he needs the property income / rent for his profits, so cannot negotiate lower rents. Also he does not own all the stores, hence the reason online cannot be more competitive than his franchised store owners.

However HVN needs to come up with a winning bricks and clicks formula. Current business is old school and in denial.

i recently came back from UK and witnessed a very successful bricks and clicks formula. I think it could work for Gerry and his franchisees. it will require a major business model shift, and some capex. The business is Argos. It is a great online / in store model. The in store model has a very small showroom with little to no goods, but computer terminals where people select goods they want. Then the process on ATM like machines, or pay at desk. they then wait for goods to be delivered to a pick up counter. It all takes just minutes. people come select - pay - collect and piss off like you wouldn't believe. So the store takes up no room but there is a warehouse of product behind. Check out the Argos website to see how extensive their stock offering is.

Gerry, you and Kitty need to go on a trip clear your heads and find a new strategy / model quickly. forget the GFC this trend will not change and I dont think the AUD devaluation will save you.