The Reject Shop, one of Australia’s fastest growing and most profitable discount variety retailers, has announced its expansion into Western Australia, with the launch of two stores – in the city and in Booragoon.
The Reject Shop, one of Australia’s fastest growing and most profitable discount variety retailers, has announced its expansion into Western Australia, with the launch of two stores – in the city and in Booragoon.
The Perth city store, to be located in the Carillion basement, will open in June followed shortly afterwards by the Booragoon shop at Garden City, and the listed retail chain has several other WA stores in advanced stages of negotiation.
The company anticipates opening six to eight stores in the next three years, expanding to 15 to 20 stores in the long-term – an overall investment of $5 million.
The Reject Shop managing director Barry Saunders said WA was now its number one expansion priority, with plans to create a network of up to 20 stores in the long-term.
“Our decision to expand into this dynamic market follows extensive internal planning and research over a three-year period, allowing us to secure the optimum store locations,” he said.
The Reject Shop operates in the discount variety retail sector, where its main competitors in WA will be the likes of Red Dot, Crazy Clarks and Gone Bazzar, and has two distinct segments.
It offers a range of everyday products such as toiletries, cosmetics and homewares at prices that compare favourably with larger grocery retailers, and also caters for specialist and trend merchandise that it has identified it can sell at a price advantage.
“People come into our stores to top up their everyday needs and see what we’ve got. You won’t do your groceries with us, but there will be overlap with the likes of K-Mart and Target,” Mr Saunders told WA Business News. “We also look at specialist retailers for opportunities for customers to save money through shopping with us.”
An example of the focus on the specialist market is The Reject Shop’s move into art supplies, where it successfully sells canvasses at a low price point.
Low price storage of all shapes and sizes has also proven to be a key category for the chain.
The Reject Shop began as a single-store retail outlet in Victoria in 1981, based on the model of a similar store in London. It has subsequently grown to operate more than 110 stores in all mainland states and territories, with the exception of the Northern Territory.
Initially it sold predominantly decorator items before expanding into other product lines, and Macquarie Direct Investments took an interest in the business to help its growth plans.
The appointment in 2000 of experienced retail executive Barry Saunders as managing director and listing on the Australian Stock Exchange in June 2004 further propelled development of The Reject Shop. Mr Saunders, who has been chief executive of Target Australia as well as spending stints in WA as administration controller of Myer and chief executive of the WA Turf Club, looked at established United States’ discount merchandise models and adapted them to suit the Australian market.
This included implementing a ‘drive aisle’ store layout that opens up the store, providing easier access to different product lines for customers. The Reject Shop estimates this move alone has added three per cent to sales volumes.
As part of company policy, all stores are company owned instead of being run as franchises.
