British newsagency and book retailer, WH Smith, is extending its operations in Australia with the acquisition of the Wild Cards & Gifts chain. Wild Cards and Gifts was established as a franchise chain 12 years ago by Lawrence and Sandra Boyle and has 41 stores with sales of around $30 million. WH Smith has 23 retail outlets in Australia, including nine in airports across Melbourne, Sydney, and Adelaide. Eight of WH Smith’s stores trade in NSW hospitals under the Fresh Plus banner. W
H Smith has just one store at Melbourne Central trading under its headline brand, which is also used by eight of the nine airport sites.
The price paid by WH Smith for the Melbourne- based chain has not been disclosed, but the UK retailer plans to retain and expand the Wild Cards & Gifts brand and franchise system, with the potential of taking it internationally.
The Boyles will retire after 30 years in retailing, including a period as franchisees of the Granny May’s chain that collapsed in 2001. The Boyles had two Granny May’s stores in Perth.
The pair started Wild Cards & Gifts from scratch as a franchise chain following Granny May’s demise, recruiting six former Granny May’s outlets initially and expanding to 46 stores before consolidating in the past three years as the retail market became more difficult.
Wild focuses on family occasions such as birthdays, weddings, and anniversaries to even out sales skewed towards four major gift events – Christmas, Valentine’s Day, Mother’s Day, and Father’s Day.
The Boyles developed a gift range to counter a dilution in sales by gift vouchers and internet retailers such as Adrenalin and Red Balloon offering experiences to mark special occasions.
The card and gift sector has shrunk over the past decade through what Lawrence Boyle says is “leakage” to gift vouchers and experiences offered by websites such as Adrenalin and Red Balloon.
Wild has established an online store, but Boyle says sales are not very high, with customers generally preferring to visit stores to select cards.
The retailer is the largest specialty chain in its category in Australia, around twice the size of rival, Kenny’s Cardiology, and aimed to expand to around 50 stores under the Boyle’s ownership.
The business model for Wild is based on a low franchise fee that has ensured the corporate office is run on a lean basis.
Boyle expects WH Smith to retain key elements of the chain but review the backend of the business to improve profitability.
Wild franchisees could gain from the buying power of WH Smith and may have opportunities to develop new retail formats as it expands in Australia.
WH Smith launched a new brand, Zoodle, in the international departures concourse at Melbourne airport in December selling a range of products with appeal to children and young teenagers, including books, toys, games, themed stationery, and snacks.
WH Smith has more than 1200 stores worldwide, predominantly in the UK. Overseas markets include Ireland, France, Denmark, Sweden and India.
It operates most of its outlets through franchise, license, or joint venture agreements.