Northbridge-based Leisure and Allied Industries continues to expand its operations in Asia, having recently secured one of India’s largest retail department store chains as a partner.
Northbridge-based Leisure and Allied Industries continues to expand its operations in Asia, having recently secured one of India’s largest retail department store chains as a partner.
Leisure and Allied Industries founder and executive chairman, Malcolm Steinberg, told WA Business News India represented a significant opportunity, with K Raheja Corporation’s retail stores Shopper’s Stop Ltd now holding a 45 per cent stake in the Indian operations of the Australian company.
“[Shopper’s Stop] have taken Timezone publicly and they have contributed capital and also they have a good understanding of the right locations [to set up Time-zone outlets],” Mr Steinberg said.
“We have only been in India for a year and we will look to have eight stores open by December and 29 scheduled and committed in 2007 and 100 by 2010.”
Since moving into the Asian markets in 1997, when it partnered with Matahari retail group in Indonesia, LAI has grown its chain of outlets to 190 throughout countries such as Indonesia, the Philippines, Singapore, New Zealand and the US. In all, 93 per cent of its sales are made in overseas markets.
“We have a manufacturing plant in Jakarta, Indonesia, which was set up in 1998, where we have 300 employees and we are also looking to set one up in India,” Mr Steinberg told WA Business News. “Overall, we have in excess of 3,000 employees.
“We have 100 people working in research and development and we are consistently creating and evolving the number of products.
“We produce around five new products each year…there is a long head time in developing a product; it can take anywhere from six months up to two years.”
LAI also made an effort to break-in to the Chinese market, however, Mr Steinberg said the company’s sales were restricted as a result of China’s one-child policy.
“The child becomes the focal point of the family, which results in most children not getting out of the house except for Sundays, when we got 85 per cent of total sales,” he said.
“There are only so many hours in a day so we have put China on the backburner and now we don’t have a Timezone operating in China.”
The company’s rise in Asian countries came at a time when the industry was experiencing a substantial downturn in sales in Australia.
Mr Steinberg said the company had been considerably affected between 1996 and 2002 by the onset of home gaming, with the likes of Xbox and Playstation flooding the market and reducing Timezone outlets from more than 40 in 1997 to 15 today.
“Since 2002, there have been product changes and now the bulk of revenue from video games comes from prize redemption games, whereby you win merchandise,” he said.
“We don’t use coins anymore; we distribute electronic tickets, which you accumulate and redeem for prizes.”
Mr Steinberg believes Asia is so appealing because of the failure of the home game industry to penetrate the market.
“The types of games weren’t available in markets like Indonesia because it isn’t as affordable as it is in Australia or the United States,” he said.
LAI was established by Mr Steinberg in 1958 and currently has a turnover in the vicinity of $140 million.
