Popular science and Australiana retail brand Australian Geographic Retail has begun winding down its 67 stores across the country, as owner Myer Family Investments (MFI) seeks to close the loss-making business.
The brand will close in early 2017, with MFI hoping to sell the retail locations in an attempt to recoup losses, according to Fairfax.
MFI bought the Australian Geographic chain in 2007, but due to increased retail competition from stores such as Kmart and Target, the brand has recently failed to return profits.
According to Fairfax, the group reported a loss of $3.34 million in the 2014-15 financial year, increasing from $2.54 million in the previous financial year. Total revenue for the business was $49.1 million in the 2015 financial year, which compared to $44 million the year before.
The Australian Geographic magazine is not affected by this winding down, as it runs separately to the retail group.
Australian Geographic magazine began in 1986 and spawned a number of stores under the same name, selling products in a niche market of science gadgets, telescopes, Australiana, and various toys.
Myer Family Investments is owned by the large Myer family, and organises and manages a number of investments across different areas. The Myer department stores operate separately to the Myer family under a public company that is listed on the Australian Securities Exchange.
A spokesperson for Australian Geographic Retail (AGR) told SmartCompany the group’s stores have “recently begun a process which will likely lead to a controlled exit from its retail business during the first half of 2017”.
“Staff and suppliers have been informed of the decision. It will be business as usual until we exit and all staff will receive their full entitlements. AGR is grateful for the ongoing support of staff, suppliers and customers and will work with all stakeholders to ensure a smooth exit from trading.”
Brian Walker, chief executive of the Retail Doctor Group Brian Walker, told SmartCompany Australian Geographic’s niche market had been marginalised over the past 10 years.
“When I walk into the stores now, I see an increase in general merchandise, they’ve become a bigger toy business than they used to be,” Walker says.
“The recent rise of general merchandise retailing through stores like Kmart and an increase in online retailing has played a part in the stores closing.”
Walker believes Australian Geographic’s niche market of “quirky scientific products and Australiana” is what the retailer should have kept its focus on.
“They started to move towards a generic mix of merchandise, which lead them to be more open to competition,” he says.
“I think they built the architecture to their own demise in a way, especially as they began to focus on Christmas trade. They had to have a good Christmas to have a good cashflow for the year,” Walker says.
Although Walker says the brand will likely live on in some form, it would take a buyer with “some real skills” to get the retailer back to where it once was.
“If a buyer halved the number of stores, and returned to the core product range they might do well,” he says.
“Currently the chain is far too exposed, and it grew far too quickly.”