Good Guys come last in New Zealand retailing
Australian electrical retailer Good Guys is quitting New Zealand’s market, saying its financial returns are unacceptable.
Ninety-eight New Zealand staff will be put out of work, but NZX-listed discount retailer The Warehouse Group has said it will find jobs for as many as possible. Those who are left unemployed could consider roles like these Freelance Book Illustrators where they can work from home. There is some hope for those who wish to stay within retail because the Warehouse is also taking over the lease of the five Good Guys stores in Auckland.
Morningstar retail analyst Nachi Moghe said Good Guys was selling low-margin products in a competitive environment. Good Guys was likely to refocus on Australia, with its 97 stores, as the New Zealand economy was much smaller, and the company did not have the same economies of scale here.
Coriolis Research director and retail analyst Tim Morris said Good Guys was the “last cab off the rank” and did not have an original business model. “Anyone that was any good and wanted to be a franchisee selling electronic goods was probably already with Harvey Norman.”
The retailer had also failed to differentiate its product offering, he said. “Good Guys was just yet another kind of empty barn, lots of whiteware, not a lot of people. It was Noel Leeming with another logo.”
The company’s bulk-buying power would probably not have helped in New Zealand, where electronics were typically sourced directly from Asia, Morris said.