Local surf retailers wave goodbye to Garden City

GARDEN City Shopping Centre is now home to two Queensland-based surf chains after the complex’s management favoured an interstate retailer ahead of a WA chain to the fill the vacancy left by the failure of Millers Surf.

In what would appear to be a classic example of the branch economy at work, giant shop-ping centre operator AMP appears to have dumped a bid by WA’s biggest surf retailer, Waves Surfwear, preferring Brisbane’s City Beach surf chain.

City Beach operates in at least one Queensland centre owned by AMP.

The interstate retailer was granted the lease to the Garden City site despite Waves providing a higher first bid to

Cliff Rocke of PPB Ashton Read, the administrator of Olivet Pty Ltd, which owned Millers.

Mr Rocke said AMP placed conditions on the lease that made it difficult for Waves, particularly when City Beach matched Waves’ original bid.

He said AMP was going to charge him $200 for every hour the shop remained unopened in addition to rent while Waves attempted to meet the criteria set down by the centre management. Mr Rocke said he was provided a significant rent holiday by the centre, however, when the deal was done with City Beach.

“AMP had the right,” Mr Rocke said.

“We believe we put up a good argument.

“City Beach matched it [Waves’ offer] so there was no detriment to the administration.”

Mr Rocke was appointed on July 17 after it is understood Millers Surf founder Ian Miller failed in a bid to stem his losses by striking a deal with creditors.

It is believed that most creditors – including the shopping centre where the Miller family had been a retailer since Garden City was founded in the 1970s – had agreed to provide some relief, except Victorian-based international surf label Quiksilver.

Mr Miller declined to comment on the situation, as did Garden City’s management.

Chris Prastidis, a director of Waves Surfwear owner Melmoss Pty Ltd, was angered by the turn of events and was considering his legal options.

Mr Prastidis said AMP had approached Waves, which has six stores in WA shopping centres, about taking over the Millers site. However, the centre manager later refused to agree to Waves’ offer to the administrator, preferring City Beach’s bid, which was increased to match Waves’.

THE decision by national shopping centre manager AMP to prefer a Queensland-based surf retailer to a local version represents the worst of the branch economy.

It is difficult to see any reason why an interstate operator would be favoured over a WA chain, other than convenience for a remotely based organisation that has no time for far-flung corners of its empire, such as Perth.

Given that Garden City’s management chose not to talk to WA Business News to explain its decision, I thought I would try to put myself in their shoes to find out why they have acted as they have – preferring to deal with a group whose best offer was to match a WA-based bid.

Firstly, maybe it was concern with WA retailers.

Given that Millers Surf had just folded, this is possible. But then again, the Miller family have been operating at Garden City for decades, a track record one would have thought counted for something.

Then again, maybe it was simply a policy to prefer national operators.

Well City Beach is not, from what I understand, a national player – at least it wasn’t until AMP gave it a leg up in WA. Rather it is a provincial operator from Queensland, and anyway, Garden City has many WA-based operators – outside the major department stores.

Perhaps, then, AMP was looking for a point of difference.

This is hard to imagine. Waves, the losing contender for the Millers site, has six stores in centres located miles from Garden City; it is hardly on every corner. However, having a few stores means it is in a better position to advertise its presence, apart from a few TV ads announcing a big opening sale.

And the cynical part of me says the major point of difference between surf retailers is their scale rather than their offering.

Of course there are good retailers, but Millers most likely went out of business because it was a one-off store, unable to create economies of scale in the face of competition from national players.

Finally, as has been suggested, was it the need for a track record?

While this may well be a good reason, it seems unlikely that a huge operator like AMP would only give space to a retailer it had dealt with before.

But what if the track record was regarding the site itself. I understand that Waves’ stores are much smaller than the old Millers’ site, whereas City Beach has at least one big footprint on the east coast.

That appears to be a trite argument when you consider Waves has six stores and a warehouse close to Garden City, apparently a group primed to step up in size with a nationally owned centre before, maybe, stepping onto the national scene itself.

We’ll never know if that was the plan now, will we? Instead, our WA retailers have a new competitor on the scene, thanks to AMP.

Think about that next time you want to go shopping or, more importantly, make an investment where your superannuation dollars may well be financing the worst aspects of the branch economy.

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