WHITEGOODS retailer Retravision will amalgamate its three geographically distinct businesses in a bid to strengthen the group’s position amid the difficult trading conditions currently facing the retail industry.
The boards of Retravision Northern (Qld and northern NSW), Retravision Southern (Victoria, Tasmania and southern NSW) and Retravision Ltd (WA, NT and SA) endorsed a proposal to amalgamate last December, giving effect to the deal at that time with the legal structure to be finalised as soon as possible.
The two east coast businesses had been looking to merge for several years.
The amalgamation will require the formation of a unification board consisting of three directors from each region, with the other directors on each board stepping down.
Retravision Southern’s Ian Ray will assume the position of chairman while current Retravision Western chief executive Paul Holt will head the national operation.
“Management’s primary task is to begin the process of delivering benefits to shareholders, storeowners and business partners as quickly as possible,” a statement made to the company’s supplier partners said.
“We are excited by the possibility of this merger and the prospect of finally bringing this iconic brand onto a national footing to enhance our competitive capability and our relationship with our business partners to mutual benefit.”
Retravision Western recorded revenue of $332 million in the 2010-11 financial year, a 9.3 per cent drop from its 2010 revenue of $365 million. Chairman Bill Harries referred to last financial year, which was Retravision’s 50th in WA, as one of the worst trade years in recent history.
“Revenue and cost of sales have both fallen year-on-year due to lower consumer confidence and the impact of political and economic uncertainty,” he said in the annual report.
Gross profit was up from $17 million in 2010 to $18 million in 2011, profit before income tax was down from $3 million in 2010 to $1.7 million, and total current assets were down $12 million to $60.3 million.
Total non-current assets were also down by $13 million to $66 million. While total expenses were down to $20 million from $22 million in 2010 overall, retail expenses went up by $3.5 million to $7.9 million.
Despite the results, Mr Harries was somewhat upbeat in the annual report, saying Retravision WA had maintained its market share in the 2010-11 year even though there were shakeups in the local market – a reference to the closure of Rick Hart.
Mr Harries partly credited the solar market for the maintenance of market share. The product was in strong demand due to the (recently suspended) state government incentives for the installation of residential solar power systems.
“The development of our solar-based business has been an integral and targeted part of the group’s success over the past year and it continues to expand. Online retail is another challenge the group is meeting head on as we work to develop our own response to this change in consumer buying habits,” Mr Harries said.
“The coming year will see our business implement an online offer of its own in an effort to capture our share of this rapidly developing market.”
Retravision Western has 91 stores across the three states (WA, SA and NT) in its portfolio and includes the West Coast Hi-Fi, Fridge & Washer City, Best Buy Electrical and Electsales brands.