TAKE THAT, KMART: Retail CEO’s swipe at ‘cheap’ rivals

TAKE THAT, KMART: Retail CEO’s swipe at ‘cheap’ rivals

AN AUSTRALIAN department store, once on the brink of collapse, is back and it reckons it has a sure fire plan to hit big names like Big W and Kmart where it hurts - sell less stuff.

Harris Scarfe, which was founded in Adelaide more than 150 years ago, opens its first full-sized Sydney department store on Saturday at the Top Ryde shopping centre on the city's north.

It's the latest in a string of store openings from Western Australia to Victoria.

But far from being a one-stop shop, CEO Graham Dean has told news.com.au he axed whole departments from Harris Scarfe stores to concentrate on just big-name home and fashion brands.

He's also taken a swipe at the competition, labelling $5 sheet sets and $8 frying pans from rivals such as Big W and Kmart as "low quality" and only "good for camping" respectively.

However, a retail analyst has said Harris Scarfe will face an uphill struggle to establish their brand but given big names like Myer and Target were struggling, if the upstart's business plan is a success there could be "casualties" among its competitors.

Marissa Tesoro, store manager of Harris Scarfe Top Ryde, with the store team.
Marissa Tesoro, store manager of Harris Scarfe Top Ryde, with the store team. Benedict Brook

The first Harris Scarfe store opened in South Australia in 1849, slowly morphing into a department store.

Later, as regional department stores were picked off one-by-one by the likes of David Jones, Myer and Target, Harris Scarfe remained independent.

A disastrous growth program came unstuck in the early 2000s almost sending the chain to the wall. Now owned by South Africa's Pepkor group - which also includes Best & Less and the Fantastic Furniture and Freedom chains - Mr Dean said Harris Scarfe would not be repeating the mistakes of the past with its new nationwide push. It already had two smaller home only stores in Sydney and a thriving online business in the state.

"We're not in a rush to expand. We're aware the market is competitive and we have a very robust plan for new stores," he told news.com.au.

Mr Dean said Harris Scarfe was "famous for Manchester" with the new store the first to have a line of bed linen from The Block judge Shaynna Blaze.

He also wanted the store to be famous for its fashion lines, which includes ranges from UK department store Debenhams and a diffusion line from designer Vera Wang.

But there are whole departments, common in other stores, that are absent in Harris Scarfe.

The assortment of dog biscuits, fishing rods, reams of A4 paper and yarns of wool - seen in the nearby Big W store - are nowhere to be seen in Harris Scarfe.

"We axed kids wear," Mr Dean says bluntly.

"There's no point being in kids wear if you can't offer boys' and girls' options across all age groups, which take up a hell of a lot of space.

Harris Scarfe CEO Graham Dean said the chain will expand to only the right locations.
Harris Scarfe CEO Graham Dean said the chain will expand to only the right locations. Supplied

"The reason we are so strong in Manchester, cooking and entertaining is because we are way bigger than anyone else," he said.

"We'd rather do less better than do everything and not be very good at any of it."

The other thing missing is ridiculously rock bottom prices. Jeans start at $19 a pair, not $7 as in some stores, and Mr Dean said his stores wouldn't stock cheap linen at the prices found in Kmart or Big W.

"Can we make a sheets set for $5 for the quality our customers would want? No.

"You can buy a frying pan [elsewhere] for $8 but it's not going to be good because it's so thin it won't cook properly. It might only be good for camping.

"We won't go there so. We'll start at $20 and we know that will deliver the outcome our customers want, which is to cook their meal correctly."

However, Mr Dean said the store's embracing of constant sales on specific items and Aldi-esque one-off special buys will keep customers coming.

On Thursday, Myer said it had taken a $46 million hit from the collapse of its Topshop experiment and continuing pain from fashion label Sass & Bide.

Some of the stores Harris Scarfe is moving into - such as the new Sydney branch and another in Orange - have been abandoned by Myer.

Mr Dean said Harris Scarfe wasn't going into dud locations and would succeed where Myer couldn't.

"Myer didn't want to discount so much - we don't have a problem with that.

"If Myer consumers want to pay more money that's up to them. Our customers don't want to pay Myer prices, they want to pay Harris Scarfe prices."

If you were going to pick an industry to double down on, department stores wouldn't be it, says Paula Bogaz, a retail analyst with industry consultants Retail Oasis.

The total revenue for Australian department stores in the financial year to 2017 was $19 billion with five-year growth practically stagnant.

"Harris Scarfe has challenges. It needs to establish its name in the local market, and the other discount departments store will have them on its radar and will be working on their counter attack," said Ms Bogaz.

She also said the recent rebranding of Trade Secret stores to TKMaxx - a name familiar to bargain-conscious shoppers looking for branded apparel in the US and UK - meant another new competitor was in town.

Indeed, a TK Maxx is opening right next door to Harris Scarfe in Sydney. Mr Dean said the proximity "doesn't concern us" and his big name and exclusive brands and link up with Debenhams would see it through.

Mr Bogaz said the fact Harris Scarfe is pitching its stores as being about quality as well as price, could work in its favour.

"If it's just price that all [discount department stores] compete on, they will never attract loyalty which is what all retailers need to survive."

Throwing in another player into the crowded Sydney market could impact retail stragglers, Ms Bogaz said.

"The three majors have always struggled against each other with only one dominating at any one time.

"Currently it's Kmart, so given Target and Big W are already struggling, and Amazon isn't here yet, there will definitely be casualties if Harris Scarfe attempts to establish a solid business in NSW."

Mr Dean said his favourite pick from his own stores is a set of Scanpan cooking pans. He's also got his hands on some Shaynna Blaze bed linen.

"I'm yet to put them on the bed but if Shaynna's happy with them, I'm reassured."

He'll be hoping shoppers across Sydney, and the rest of Australia, can also be reassured by Harris Scarfe if it's going to truly come back from the brink to beat the big boys.


News Corp Australia

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