remium replica pieces. A qualified electrical engineer, Drexler began selling furniture he sourced from auctions out of his small eastern suburbs store in Sydney in the late ‘70s, before moving into manufacturing in the early ‘80s. Inside Retail Weekly: How has 2017 been at Matt Blatt? Adam Drexler: 2017 has been another exciting year for us. We have three new stores that will open before Christmas – one in Oakleigh and another in Blackburn, which adjoins Nunawading, a furniture precinct in Melbourne. But the most exciting store we’ll open is in Balgowlah on the Sydney Northern Beaches. We’ve been looking for a suitable place on the North Shore for some time and we’re now renovating it, which we’re really excited about. The first thing that makes Balgowlah special is our research has shown that we have an increasing number of customers coming from the Northern Beaches to our showroom in Alexandria, but we feel that there are a lot who aren’t coming. There’s a joke I hear, which is that people who live on that side will not cross the bridge to get to this side in Alexandria! So we want to make ourselves more accessible to our customer base and we feel the customers in that area are very much our demographic. For example, I was there a few weeks ago to see how things were progressing and I met the painter, a local in the area. I asked if he’d heard of Matt Blatt, but he’d never heard of it. I said, ‘Your wife would have heard of us’, but he said she hadn’t. That couple lives in the area and they haven’t heard of our brand, but it’s heartening for me because it means there’s a lot of potential for us and there’s a lot more we could do to get our name out there. Besides that, about three months ago, we opened a warehouse in Melbourne and we’re getting goods from overseas shipped directly there. We’ve got a warehouse in Sydney, which has been our national warehouse and previously, we delivered all over Australia from our warehouse distribution centre in Sydney, which is 14,000 sqm. But we felt we needed to open another warehouse in an area where we have showrooms to give customers a better level of service in terms of click-and-collect. IRW: Is it tough finding a space for you guys? AD: Alexandria is our biggest showroom – it’s 1,800sqm and we like this size a lot. One of the new showrooms we’re opening and in Blackburn is about this size and we have others that are around 300sqm, but we’re moving away from that smaller size. The promotion has a ‘smashed avocados, smashed prices’ theme. We had a radio campaign where the first line is, ‘I gave up smashed avocados on toast and now I own a castle!’ We were giving out free avocados on the weekend. That’s how we differentiate ourselves to other players in the industry which are a bit more serious and conventional. IRW: What plans does Matt Blatt have for 2018? AD: We have a program of opening three new stores a year over the next five years. We feel that there is a big trend towards online shopping with the entry of Amazon coming to the industry and that awareness is going to be exacerbated. Customers demand a higher level of service than they used to and part of the reason we’re opening more stores is to provide them with click-and-collect – each showroom will become a collection centre. They can shop online, collect in store or collect in our warehouse. The retail landscape is changing, prices are very competitive, but we believe people don’t buy on price online. There are a lot of other factors they base their decisions on. IRW: Speaking of Amazon, a lot of other retailers have put their hands up to work with them. Is that something you’d be up for? AD: We intend to list our brand on Amazon. It’s another avenue to expose our products and that’s what Amazon’s about in Australia, besides selling their own brands. It’s a good thing they’re coming in. The sky’s not going to fall like some may think. It’s going to increase the competitive landscape. Amazon is not just about price, it’s about a variety of products and delivery and everyone’s going to have to pick up their game. It’s not a bad thing. IRW: Everyone in the industry has been talking about omnichannel this year – is that something that’s on your mind as well? AD: Our business started off in 2000 as an online-only business, then went into bricks-and-mortar, so we did the reverse of what other businesses are doing. But we’re in the furniture business and that lends itself to big showrooms rather than just selling online. There are some who are setting up as purely online businesses, but in my opinion, that’s a flawed business model for furniture. I feel that for furniture, you need to see the product, feel the fabric, see the colour – the colour on your monitor will look different to mine. You need to sit on the sofa to see how comfortable it is, you need to lie on it to see if you can fall asleep on it. There are a lot of things with furniture that I feel will be too restrictive for pureplay businesses. When we opened a showroom, it opened the floodgates to sales in the business. The combination of online and bricks-and-mortar is very powerful for people like us in the furniture business. When you buy an item of furniture online, there’s a risk involved – it might not be as comfortable as you thought. That risk costs money, so some people will buy online, provided the price is right. You generally find pureplay products at a cheaper price, they’re not usually at the premium end of the market and that’s not the end we want to play in. Our focus is on quality and we like to offer a good quality product at a reasonable price. IRW: Whereabouts in Australia are you considering expansion? AD: We’re looking across Australia. Every time we open a new store, we always get feedback from people in Perth. It’s a bit more difficult because of the big distances to deliver products and if we opened there, we’d need a warehouse there to make it convenient for customers in terms of delivery and that would be an expectation. There are other places which would interest us – Newcastle, Gosford, Noosa. There are a lot of places we could go before cannibalising our own showrooms. We’d consider New Zealand. We’re not that big. When you look at what’s out there now, there are furniture stores that have thousands of showrooms on every corner We don’t want to go down that road. IRW: So you could say that New Zealand would be your first step into international expansion… AD: We’ve thought very hard about NZ and we almost made the decision a few years ago to do it, but we’ve got better things to do in Australia before we move there. Before having a fullyfledged showroom in NZ, we would need a warehouse there with a showroom attached to it. Basically it’d be a warehouse and the main source of sales would probably have a strong online basis and if customers wanted to see product, they could come to the showroom within the warehouse. That’d be a safe way for us to go and we’d evaluate it after that. IRW: Would you look beyond New Zealand? AD: There’s some risk involved, but a pipe dream of mine that will probably never happen is to go to Soho in New York. Whenever I mention it to any of the staff here, a hundred hands go up! But there’s an old saying that New York is where Australian companies go to die. IRW: What are some of the unique challenges of running a furniture retail business? AD: We source our products overseas, but we do buy from local manufacturers too. There’s a huge range of products that are cheap and poorly made but to find a well-designed product of good quality is a real challenge. For us, the challenge is keeping things fresh and bringing new products in. We are changing all the time. Our business is based on change and we need to fuel the change with new products, ideas and strategies. We used to bring in products from India, maybe 10 years ago – beautiful stuff. They make really great stuff, everything is handmade. They have cabinets with bone inlay and things like that, so we bought them and had them delivered. They looked really good, but the quality wasn’t there. For example, when you moved one of the bone inlay cabinets from one side of the room to another, a couple of tiles would fall off. So when we evaluated the results, we decided it wasn’t worthwhile to buy these products and we just canned them. But in the last couple of weeks, we came across an agent with staff on the ground in India who deal with manufacturers and they will supervise production from beginning to end and guarantee that product will be well-made using materials like European glue. This kind of service will enable us to bring a whole new range of products in. We’re very excited, it’s going to tick a lot of boxes for us. It will probably be eight or nine months before we see anything come through, but that’s something that’s part of the change we embrace. We’re always looking for new ideas and we’re open to whatever people come to us with. We’re adventurous with trying new things and not everything works, but you have to try. IRW: Matt Blatt sells quite a few pieces of replica furniture and has come under fire in recent years for it in recent years. In Europe and the UK, it’s recently become illegal for retailers to sell replica pieces. What are your thoughts on that? AD: In Australia, the laws are different. The laws are that you can sell replica furniture that has not been design registered legally, provided you don’t pass it on as original design. And in Australia, if an original designer does register his or her design, it lasts for 10 years and after that it’s not valid anymore. That’s the law and we work within it – we provide customers with products they want. If they didn’t want replica furniture, we wouldn’t be doing it and that’s the base upon which we work. We don’t only sell replicas, we sell more non-replicas than replicas, but it’s replica furniture that gets people excited and it’s the controversial side of the business. If the government outlawed replica funiture tomorrow, people aren’t going to stop buying furniture, they’ll still buy it. Instead of the Barcelona chair, they’ll buy another lounge chair and we’ll have other things for them. It’s not like business will stop. In our business, 30 per cent of our range is replica. It does well, although certain lines aren’t as popular a they used to be. We were probably the first in the country to bring the replica version of the Barcelona chair, which was a third of the price of the licensed product and everyone went gaga over them. It was really fashionable at the time, it was hitting the right spot. Today, you won’t get an interior designer or architect specifying a Barcelona chair to any clients, becuase it’s had its day, it’s not exciting anymore and they’re looking for the next product. We still sell it, just not in the same numbers as before. Regardless these days, everyone’s selling replica furniture – Aldi, Officeworks, Harvey Norman, Domayne – if those people who deal in the licensed original products want to pick on someone, there’s bigger fish to fry