“It’s well run; it’s a profitable business”: Novo talks Spendless purchase
After more than 30 years at the helm of Australian discount footwear chain Spendless Shoes, founder John Charlton has sold the business to competitors Novo Shoes Group. According to Charlton, the deal was reflective of the renaissance of good retail taking place.
“As the largest family footwear retailer in the country, this purchase will make Spendless more competitive in the future, where no customer will be offended by price,” Charlton told Inside Retail Weekly.
“The increased scale and purchasing power [will ensure] a strong future for Spendless Shoes.”
Charlton founded Spendless in 1988, after starting his career in David Jones’ shoe department.
While Novo Shoes already operates more than 100 retail locations, between its Novo, Naturalizer, Ipanema, Grendha and Rider brands across Australia and New Zealand, the purchase adds a further 214 Spendless locations to its roster.
[SUBHEAD] Keeping the team in place
Novo Shoes chairman Ian Unwin told Inside Retail Weekly that the group has been watching Spendless for some time, and was invited by Charlton to “look under the hood” of the business around six months ago.
“When we met John six months ago, he indicated that he was looking to sell out of the business… We were very impressed with what they’ve done, and the team they’ve built and the business model,” Unwin said.
“It’s well run; it’s a profitable business, and we thought it could strengthen the business we have in Australia – so that’s why we’re buying it.”
Novo was so impressed with the way Spendless has been run that it is making as few changes as possible to the operating model moving forward. Spendless will not be integrated into Novo Shoes – the two businesses will continue to run separately in the Australian market.
According to Unwin, the brands speak to different customers, operate under different models, offer different price points, and it doesn’t make sense to combine the two.
“We intend to retain the [business model],” Unwin said. “We’re keeping the team, and we’re keeping the profile the business has. It will be the same.”
With Charlton stepping away from the business, Spendless general manager David Evans has stepped up to lead the business as chief executive, while general manager of finance Tina Taddeo now serves as chief financial officer.
[SUBHEAD] Go where the customers are
Charlton spoke to Inside Retail Weekly earlier in the year, indicating the business was investing into a stronger online presence, with more consumers being incentivised to purchase online rather than entering shopping centres.
“[One] thing I find amazing right now is that landlords are increasing paid parking at their centres,” Charlton said. “Why would someone drive around a carpark, get frustrated and pay for it, when they could just have something delivered to their home? Why are we making it difficult for them?
“A customer will happily pay $40 for something online and rave about getting free shipping, and another one will pay $30 for something and complain about $9 of shipping. It’s the same psychology with paid parking. Customers don’t like it.”
According to Charlton, Spendless doesn’t care how you want to shop, it just wants to sell you shoes.
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