The Strathfield Group's (SGL) recent acquisition of Queensland-based Software Today has proven to be the stepping stone the national mobile communications retailer needed. The union, while expanding SGL's product range, is ultimately intended to provide a platform for SGL's ambitions of expanding into the realm of computer and communications megastores, which will put them in direct competition with the likes of retail giants Harvey Norman, Dick Smith Electronics and Coles-Myer.
But geographic penetration was not the sole objective in obtaining Software Today, according to SGL's managing director Andrew Kelly, and reports of a massive expansion of Queensland stores, and ultimately a national chain, are premature, he added.
Software Today megastore
"By July next year we will have made a full analysis of the situation and although a few stores will be moved in the near future, business expansion will not occur until the next financial year," he said.
Kelly confirmed that this includes developing the megastore concept at carefully selected Queensland locations. Initially, SGL's products, such as car stereos and mobile phones, will be available in medium-sized Software Today stores but they will not be universally distributed.
According to Kelly, the growing product line will include computer peripherals, but only to complement the already existing range of Software Today product.
The acquisition of the software stores has rapidly accelerated the move from SGL's conventional communications and office products retail focus into software and hardware options. Kelly cannot see the momentum slowing down but emphasised that the foray into this type of venture requires a degree of caution.
"We have a very strong customer database that can be cross-referenced between products, SGL and Software Today, but at the moment we are not mixing the categories in our marketing approach," says Kelly.
The ultimate plan is to have Software Today chains less reliant on traditional software products in order to create better growth prospects and assure superior bottom-line profit.
SGL's infusion of mobile phones, printers, cordless phones, answering machines and scanners into the Software Today product line already accounts for 10 per cent of sales. Kelly is determined to see this figure rise to an equal distribution of sales between software and home office hardware by the middle of next year.