Request is probably not the correct word though is it?!

Any Comments, anonymous of course – use a  name like Idi Amin or Robert Mugabe.

Tim

Buyers are not exempt and Wesfarmers are not happy with the buying performance. Buyers have reacted by not accepting price rises and pushing more terms for less activity.

Tim

“If you’ve got a CEO (Brian Quinn) that ends up in jail and you end up firing your merchandise director (Peter Scott) for corruption, it’s a bit tricky for people to actually have belief in the leadership,” he said.

What about an MD with no retail experience and a mustache (John Fletcher), a director who is a major supplier (Sol Lew) and no wonder there have been some issues at Battlestar Galactica.

The canny Scot described the business as “fundamentally broken” when he took over, with management just looking at the next quarters sales/profit cycle and not long term.

So supplier such as Nestle and Unilever are now being asked for more trading terms to cover Coles’ poor management and lack of reinvestment in Fixtures and Fittings.  That makes sense!

How about Coles suck it up and actually offer the suppliers a decent business to deal with before they start screwing the account managers for more funds.

Any thoughts Ian?

Tim

“Hardware group, Mitre 10, staged its annual convention on 23 September 2008. The organisation’s CEO, Bernie Bicknell, claimed that in the past 12 months, a lack of funds prevented the company from purchasing about half a dozen strongly performing stores. Bicknell reaffirmed that Mitre 10 is considering options such as an outright trade sale or a capital injection”

Well I believe it may well be Metcash who is the preferred bidder or injector. The complex franchise structure of Mitre 10 is proving a bit too much of a challenge for the Corporate Heads at Woolworths and they are getting cold feet. Without ultimate control of the entity they think it will be too hard to turn around this loss making network. Metcash on the other hand has the buying experience and understands the challenges of dealing with individual owners at store level.

The numbers being talked about are between $730m to $1billion for an outright purchase but I think this is the most unlikely outcome. A capital injection into the business by Metcash and management and buying integration seems the best outcome for all parties.

On another front the ACCC has woken up to the fact that Wesfarmers‘ purchased five Mitre 10 stores over the past 2 years. This must have come from them sniffing around the Mitre 10/Woolworths talks. Anyway they may request that Wesfarmers divest these stores in the near future.

Watch Singapore for the next move in Woolworths’ expansion!

Tim

Mitre 10 has been struggling for the past decade to have an impact in the Hardware channel, particularly in metropolitan areas. The Australian Financial Review has reported that Mitre 10 and Woolworths are in discussions regarding a capital injection or outright purchase of entity.

The AFR also indicates that Mitre 10 will be holding a shareholders meeting during its National Convention next week on the Gold Coast. With the vast majority of shareholders in attendance this is an ideal opportunity to present a restructure or buyout proposal.

Hardware should not pose any ACCC issues for Woolworths as this is one of the few areas that WOW do not participate in in the Australian market.

Tim