Thread: GMC goes into receivership

I believe it was the other way around - Techtronic Industries chose to have a single outlet for efficiency of distribution. Bunnings will chew them up and spit them out though.

I notice bunnings still sells ozito, so imho the exclusive deal with Ryobi smells like a tactic to send GMC to the wall.

Originally Posted by echnidna

I notice bunnings still sells ozito, so imho the exclusive deal with Ryobi smells like a tactic to send GMC to the wall.

Bob, as I understand it Ryobi is exclusive to Bunnings, ie no other store can stock Ryobi, but Bunnings can stock other brands.

That's how it was explained to me by a Ryobi rep at the last Bendigo swap meet where Ryobi were selling massive amounts of display stock pulled from other hardware store.

I bought a couple of very nice Ryobi sanders there for less than half price, unused, just ex display.

One of the local businesses got left with what was left after the swap meet and they were also selling it as ex-display, in their words "we are not allowed to upset Bunnings"!

If it weren't for Triton would anyone care?

GMC took an iconic brand and trashed it.

They're just another company who found that the way to long term profitability is not selling crap at low margins.

What you've missed Ron is that GMC was very innovative and starting to release all types of tools not generally available to many people. As far as triton goes it was nearing the end of its days when GMC bought it.

With the Ryobi Exclusive deal with Bunnings they will rue the day they went that way if and when Woolworths start Big Box stores.

With the credit squeeze Westfarmers the parent company of Bunnings who purchased the Coles Myer group when their share market price was $45 I saw a report last week that they have all sorts of liquidity problems now their shares around $15.

The last thing Westfarmers want now is for somebody to interfere with their hardware cash cow because as the report said that coles prices were slightly under Woolies on consumer products Woolies were still outperforming Coles in sales in the same market.

If Woolies move into hardware then i suspect that the Black and decker group and Woolies are about to become good bedmates mainly because they are the only ones I can see with a large product range with a cheap entry point suitable to match the Bunnings - ryobi deal.

Infact , it would not surprise me if discussions are well under way for a group purchase of GMC by a Woolies and Black and Decker group. Unlike Westfarmers, Woolies are apparently cashed up and as Bunnings have 16% of the hardware market ( Not just tools ) they will follow them to the end of the earth.

I have no idea really, but I expect the potential buyer has the knowledge and might well be looking for a cheap entry point into the handyman DIY market and not interfere with their current brand.

Now we know that GMC do not have any factories but what they did do is market well in many countries. they must have had a huge advertising budget which regardless of the politics of the brand would have built up a lot of good will which is a saleable item providing the buyer can ( accentuate the positives and try to negate the negatives),

Noticed the other day that Big W is selling a Black and Decker circular saw for less than Bunnings. Same model.
Looks like the same model that Trade Tools is selling under its own name. (A good robust saw, except it's too heavy.)

But back to Big W -- it seemed to me that they'd beefed up their tool section recently. Maybe they're practising for a Bunnings fight.
Michael

I think wesfarmers are hurting right now, there have been plenty of borrowings that have to be paid back, money is tight.

Woolworths though, are possibly starting to notice the 200 stores (and still adding) of Aldi eating into their food chain.

Aldi are aggressive, but very controlled. Aldi is privately owned by two brothers, as far as I know. The Australian market, which is effectively Coles and Woolworths (Safeway in Vic) has never had anything like Aldi before.

The Aldi formula has been honed over the decades since WWII to be a very slick organisation. In their home turf of Germany, Aldi does have real competition.

I think Woolworths and the other supermarket chains, big and small, are starting to feel the growth of Aldi in this country. Aldi, is like no other supermarket chain of stores in the world!

Mick.

Aldi is certainly different. I shop there weekly for certain items.
It's an interesting experience, but not like the others where the customer is king. At Aldi one behaves oneself.
They have good prices, and you never know what you're going to find for sale, especially in the tools line -- I've recently bought a table saw, a couple of work benches, and a huge hammer drill. (All at ridiculous mark-down prices.)
For those reasons, and to keep the others honest, I'll keep going back.

And somehow this thread seems to have drifted a long way from its beginnings.

Michael

Originally Posted by mjmjm

And somehow this thread seems to have drifted a long way from its beginnings.

Michael

Michael, I do not think it has gone off track.The original heading was GMC GOES INTO RECEIVERSHIP.

What we are doing while waiting in Limbo is try to predict what the outcome will be, who the new owners will be and what are their marketing strategies. All the info about Bunnings, Westfarmers financial health, The Bunnings Ryobi Model, Woolies financial position, and potential entry into the Bix Boxes theory ,the Global crisis and even the growth of Aldi who it was said might be starting to bite into Woolies and Coles. Woolies are in a better position to withstand it but Coles may not be because of their lost market share and Westfarmer's equity.

Nothing works in isolation and once somethings are let off the chain it is a roller coaster ride and what happens to GMC will depend on the potential buyers weighing up all the things that we have discussed but more important, if it is an Equity buyer, can the business be patched up quickly in the present climate taking into account what has been discussed and if so, can they inturn break the company and its assets up so they can all be on sold as separate entities.

Originally Posted by STAR

.... the Global crisis and even the growth of Aldi who it was said might be starting to bite into Woolies and Coles. Woolies are in a better position to withstand it

In case you're not aware, Woolworths in the UK is no more. The entire 807 store chain is closed - no buyer could be found. 27,000 employees are out of a job. See here.

Ray.

Originally Posted by rayintheuk

In case you're not aware, Woolworths in the UK is no more. The entire 807 store chain is closed - no buyer could be found. 27,000 employees are out of a job. See here.

Ray.

Is there any connection.I don't think I have heard of any connection between the two?

There is absolutely no connection between the UK Woolies and the Australian one. I did see that information in The Australian and they confirmed as I already knew that their was not any connection with Woolworth's Australia.

Ray, I landed in Germany the day that edition of the International Herald Tribune was on sale in Frankfurt. I bought that paper as well as ½ a dozen other English newspapers. It was very interesting reading, to say the least.

Woolworths Australia is at the moment in the best seat of the Australian supermarket situation. It is a very well run business and whilst they are currently not making obscene amounts of money, they are doing exceptionally well.

The UK Woolworth chain store company was an independent company as far as I know.

Woolworths in Australia has been experimenting with Aldi type goods since last year. Goods that you would not normally associate with a food supermarket, more a cheap or bottom end hardware and whitegoods store.

Aldi has made a slow but steady approach to Australia, they have the deepest pockets of any food store company in the world. They are now starting to get to a serious size in this country.

Their hardware and whitegoods range, which compromises many bottom end priced goods, but with above bottom end quality. Is as good as, or as bad as, the lower priced stuff one sees in any hardware chain store around the world.

Mick.