Software Today aims high with its first superstore
- 10 March, 1999 13:05
Listed mobile communications retailer the Strathfield Group Limited (SGL) has big plans for the Software Today chain it acquired late last year and is now laying the groundwork for a 1000 square metre computer superstore in Queensland.
At the launch of SGL's new state-of-the-art e-commerce Web site (http://www.strathfield.com.au), managing director Andrew Kelly revealed more about plans for a Brisbane-based retail outlet, which would rival any in the country.
"We are looking at opening our first electronics superstore in July in Queensland," Kelly said. "It will be focusing and expanding on Software Today's products - not TVs, videos and brown goods - purely a computer superstore with PCs and a large telecommunications section."
The plan is for SGL to capitalise on the brand awareness Software Today created with 19 mall-based stores, mainly in Queensland and northern NSW, Kelly said. That figure has been reduced to 16, after three stores closed when "landlord negotiation issues" affected viability.
Kelly said the Software Today superstore would present a broad range of computer hardware and software, including PCs, peripherals and accessories, plus the traditional mobile phone and office equipment product and services that is SGL's heritage.
The facility would also be the central point of distribution for the "10 per cent extra business" Strathfield's full e-commerce transaction Web site is expected to generate "within three years".
"There are a couple of sites that we have earmarked," Kelly said of the superstore plans. "We're now at the stage where we're doing the numbers and budgets to see if they gel.
"We're going to do it next financial year and when we do it will happen fairly quickly."
The risk to shareholders of such a venture is currently being carefully assessed by beancounters and "we are going to get sign-off from the board at the April meeting", according to Kelly.
He said the company is also committed to a steady growth strategy and a roll-out of 15 new stores nationally will be executed during July and August. They will be under several of the store brands owned by SGL, but all will be departmentalised, carrying the full kit and caboodle of products and services offered by the group.
"We are now dealing with the mass market," Kelly said. "We just want to retain and grow our customer base while expanding the range of products and services we can offer them.
Purchased for "less than $2 million", SGL's swoop last year on the once-struggling Software Today chain is looking more and more like one of the bargain buys of the decade.
Early cross-product trials between its traditional telecommunications stores and mainly mall-based software shops have been an overwhelming success while significantly boosting Software Today's profitability. This refocusing is being significantly ramped up, Kelly said.
What was originally expected to be a broad shake-out of unprofitable ST outlets ended in just three stores being closed while Software Today's product core will soon be incorporated into Strathfield's Web site.
After opening at $1.70 when launched in July 1998, SGL's share price hit a low of $1.25 before settling at around $1.45. The market then got more confident in December with the price rising to $1.90.
Kelly said that when "another analyst had a look at the company and we announced our results, we hit $2.90". At press time it was trading at around $2.60.