AFTER nearly 30 years in the whitegoods and electrical business, Rick Hart is in the midst of training a successor to manage his $75 million-a-year group of companies.
AFTER nearly 30 years in the whitegoods and electrical business, Rick Hart is in the midst of training a successor to manage his $75 million-a-year group of companies.
Former Hi Fi Corporation (in which Mr Hart has a 25 per cent share) director Nicholas Kirby was recently named group general manager, an appointment Mr Hart says will allow him to spend more time on the golf course.
“Ultimately I will step back,” Mr Hart said.
“He [Mr Kirby] is going through the training at the moment. He is a very experienced executive and he knows the business. We knew him for four years and we targetted him, and now he has come across.”
The Rick Hart group includes 13 Rick Hart electrical and whitegoods stores, one Rick Hart Hi Fi warehouse and one discount operation called Not the Full Quid.
Mr Hart, who is chairman of the Fremantle Football Club, began his retailing career in the 1970s, and while some believe he got his retail start selling ceiling fans, they are mistaken, according to Mr Hart.
“We started as a whitegoods business and developed the fans business later, I think that was in the late 70s,” he said.
“Our catch phrase was ‘join the Rick Hart fan club’, and it became our marketing catch cry.
“We knew there was a market for fans because they were relatively cheap and easy to install. We had five stores selling fans, no-one was doing it and it took a long time before the competition caught on. We sold 20,000 of those overhead fans over two years.”
As air-conditioning became more affordable Mr Hart re-focused his business on the electrical and whitegoods operation. The short-lived experiment with fans had enormous brand benefits, however.
“The profile that it gave us was huge,” Mr Hart said.
“The 20,000 customers who bought fans from us were introduced to the whitegoods range and it created a market. We promoted the ‘join the Rick Hart fan club’ heavily on press and TV, so a lot of people today think that we started as a fan business.”
Mr Hart’s first electrical goods store, Northern Discounts, turned over $350,000 in its first year. Now, the Rick Hart group of companies turns over between $75 million and $80 million annually.
Mr Hart sold 75 per cent of the business in a “multi-million dollar deal” in 1999 but swooped on an opportunity to purchase it back earlier this year with an offer that was $2.5 million less than that of his competitor on the deal, Retravision.
“We had a prescriptive right that if it was ever on sold we had first right to buy,” he said.
While Retravision offered $6 million, Mr Hart was able to acquire full ownership for “about $4 million” because of the contract clause.
“I could have on-sold my share to Retravision but I felt that the name and the business would get lost. History tells you that the names disappear,” Mr Hart said.
“Joe Sarich, Archie Martin and Voxadian were big businesses and they’ve all disappeared through takeovers. and there was a danger of that happening.
“We are the only truly WA-owned retail chain of electrical and whitegoods.”
Mr Hart, who traded in the Retravision co-operative for 20 years, said strong advertising, even in the early days, had helped grow business.
“Our competitors didn’t advertise much, apart from the very big ones,” he told WA Business News.
“Back then our budget was chicken feed and we flew by the seat of our pants, taking out ads when we could in the hope that they would work.”
Advertising has since become essential in the whitegoods and electrical goods industry, with Rick Hart spending $3 million a year.
“The industry is so heavily driven by advertising and promoting that people come to except it,” Mr Hart said.
While major competitors have fallen by the wayside, newcomers The Good Guys and Myer’s Megamart have joined industry stalwart Retravision and Harvey Norman in an increasingly competitive market.
According to Mr Hart, positioning the company as a specialist operator with “old-fashioned customer service” will ensure the success of his electrical goods business,
“My view is that we can’t be all things to all people. Those who specialise and give a perception of wide range and a wide choice of brands win,” he said.
“We check out the brands in the market and monitor them, and we get the best range of the best brands.
“We like to give advice to our customers. We have over 30 dishwashers and people can compare them.
“We can give them the information for them to use to decide.
“Try finding someone to help you at some of the other stores.
“And our customers keep coming back and back and back.”
