THE adoption of formal corporate structures, receipt of advice from professionals outside the family, and effective communication with stakeholders were key drivers to successful growth for family operated department store Aherns, according to former Aherns managing director Robyn Ahern.
Speaking at a recent Family Business Australia breakfast function, Ms Ahern said the first takeover bid for the family-run company was made in 1983.
It wasn’t until 1999 that David Jones acquired the company for $29 million, a figure her father, John believed was “not nearly enough” but, in the end, an offer that convinced the family to sell.
Competing with national retail giant Myer was a constant battle but strategy, board governance, and shareholder management played an integral part in Aherns’ success, Ms Ahern said.
“The benefit for us was that it [a formal strategy first drafted in the early 1980s] got us on the road of getting further ahead,” she said.
“The second version we did was very successful. For the first time we had consistent results; before that it was like a rollercoaster and there were booms and busts. And, for the first time, we benchmarked ourselves against other companies.”
Ms Ahern said setting goals and having a long-term vision helped the company’s sustainability.
“In the early 1990s we said no to sales for the better of the company. We closed Carousel, which was our first suburban store. But we had to think ahead.”
Ms Ahern said employing an outsider to act as a mediator at board level helped the decision-making process.
A director of BankWest and the RAC, Ms Ahern said a formal board structure that included non-family directors was also important.
“We better evaluated our decisions,” she said.
“Before we might have spent $10 million renovating the Karrinyup store but it would have been an informal decision that we made by default because we’d talked about it for so long.
“A formal structure made us evaluate it and made us have a longer-term focus.”
Ms Ahern said the value of the company’s culture was something she learned after the sale of Aherns.
“We underestimated the impact that it had. David Jones commented to us that the value our people brought was more than others had. So it’s not just what is written down as values, it is the cultural thing and I think family businesses are great at it but we didn’t value that enough,” she said.
“A formal structure made us evaluate it and made us have a longer-term focus.”
- Robyn Ahern
