Retail chain Howards Storage World has collapsed into voluntary administration just weeks before Christmas.
Administrators from Deloitte were appointed to the retailer on Friday, December 9, with Vaughan Strawbridge and David Lombe appointed to manage the administration of four entities within the Howards Storage World group.
The group operates 29 company-owned retail outlets in New South Wales, Queensland, South Australia and Victoria. The business also wholesales goods to a network of 30 franchised Howards Storage World stores, of which it is the franchisor.
The business is continuing to trade, according to reports from Fairfax, with the administrators expected to commence a sale campaign for the business, which was founded in Sydney in the 1970s with a single store called Stack and Store. The first franchised store opened in 1998.
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Howards Storage World is the latest well-known retail chain hit financial trouble in recent weeks, with childrenswear retailer Pumpkin Patch and discount shoe chain Payless Shoes also recently calling in external managers.
Days of “functional everyday product” stores are numbered
The Retail Doctor Group’s Brian Walker says collapses like Howards Storage World, and Pumpkin Patch earlier this year, show how difficult it is to run a business in this retail climate if it doesn’t have a defined niche.
“The days of functional everyday products in shopping centre businesses are numbered,” Walker says.
While Howards was on an expansion path just a couple of years ago, it appears that the movement of discount retailers into the storage space has put pressure on the business – a reminder that growth needs to meet the desires of the customers and provide a unique alternative to competitors.
“It’s not all about growth – it’s about quality of growth – it’s about an alignment of brand and offer to the current and future marketplace.”
“If we look at Pumpkin Patch, they might not be too dissimilar [to Howards],” Walker says.
“They grew fast – it was exponential growth, they were a mid market offer, and they were easy to copy.”
Walker believes there may be news of similar businesses falling into trouble in the near future, with Australian retailers that are showing strength at the moment are those that are not easy to copy.
“I think we will [see more] – unless a business has just absolute uniqueness. If we look at Cotton On briefly and how smart they are: even individual brands they have, they have a niche, have a following, they’re cool.”
“They have these brand attributes that make them quite unique.”