Winning Group snaps up online business PowerBuys
Wednesday, August 29, 2012/
The Winning Group has continued to acquire new companies, this time announcing the purchase of McKnights Corporate and its online retail arm PowerBuys.
The company, which was founded by John Winning in 2005, has been a powerhouse in Australian online retail with its Appliances Online and Big Brown Box websites.
The company announced this morning it will buy PowerBuys and McKnights Corporate, with general manager Peter McKnight to remain in his role, along with most of its employees.
Winning Group chief financial officer Aaron Links told SmartCompany this morning the collapse of Retravision Southern – Retravision’s buying group in the southern region of the country – put McKnights Corporate in a “less than ideal position”.
“We’ve been aware of them for some time. We’ve seen them in the market, although obviously they weren’t massive competitors.”
“We were aware of what they were doing, and the Retravision situation put them in a tough spot. So discussion started and we saw some strong linkages between our businesses.”
The purchase price was undisclosed.
McKnights Corporate, which is a family-owned business, runs stores in both the Melbourne suburb of Hoppers Crossing and Ballarat. The PowerBuys business was founded in 2008, and sells a variety of consumer electronics and home appliances.
Links says the business provides some good volume in terms of the smaller appliances market.
“That obviously allows us to have a chunk of the market there, and that’s one part of the advantage.”
“The other is Peter McKnight. He is very well connected in the corporate side of things, and that’s something we see as an opportunity.”
The acquisition of the retailer adds to Winning Group’s already strong range of brands, including Big Brown Box, which it snapped up and relaunched. The Winning Appliances division is turning over at least $150 million a year, the company confirmed earlier this year. Appliances Online is making more than $20 million.
Yet the acquisition also comes at a time when margins are thinning in the consumer electronics and home appliance market. Links says it’s an “interesting time”.
“With reporting season we’re seeing some competitors’ financial situations, so it’s interesting in that respect to see that we’re in a strong position.”
“We’ve got a good focus on customer service, which is doing us well. I think the difficulties of the market opens up some opportunity.”
He also says the company’s national distribution network means it’s in a stronger position.
“Margins are not a major area of concern. It’s obviously something we focus on, but we price to the market. Our biggest pressure is just that we should continue to grow.”
This story first appeared on SmartCompany.