TALKING POINT


TALKING POINT


WHAT COULD POSSIBLY GO WRONG?


Industry consultant Colin Petty shares his thoughts on Bunnings’ strateg or Homebase and the future of the businessy f and pr oceed on the assumption


out what the business’ strengths and


C Alternatively weaknesses are,


o n v e ntio n a l wisdom has it that when you buy a


conduct a SWOT analysis. Y


business, Yo


you


set about building on the former and eliminating the latter . It’s not terribly revolutionary,y, but it’s tried and tested, and generally,y, it works. ther e’s the


y,, it seems, ther


Bunnings way. Thumb your nosey.. Thumb yo at convention. Don’t waste time with the SWOT analysis – you don’t need to know about the str engths because you have


and weaknesses, because you have alr eady decided what you’r e going and you know you’re right.


to do, and you know you’r


Maybe the business you’ve bought does have a name which is known and tr usted thr oughout the country (and which actually describes what the business does). That doesn’t Y ou’re going


matter – away with it. Yo ou’


to r eplace it with a fresh new name – so fr esh and new that 99.9% of your tar get customers (and 99.9% of the customers you have acquir ed


you


business actually does. Doesn’t matter – you have already decided they are just going to love it.


You find Black W and


Then there’s the stock. All those tired old brand names: Stanley & Decker Worx, Bosch. Who


y,, r,, Wo


needs them? Clear them out at silly prices (thank you Bunnings – I happily filled a trolley with ridiculous ly under-priced power tools at Homebase in Ashbourne). After all, you’ve got a whole new portfolio of brands: fr esh,


new brands which have never been seen in the UK befor e. The public ar e going to lap them up.


Or alternatively (and let’s just be a tiny bit negative here), you’ve got a portfolio of meaningless labels, which are devoid of any perceived brand value, and the public ar going to stay away in droves. Because let’s face it,


and the public are


Because let’s face it, the customers actually know and trust those tired old brand names like Stanley Blacky,, orx and Bosch – and


ike Stanley & Decker Worx a r,, Wo


there are plenty of other retailers who are happy to go on selling them.


with the business) have never heard So, strategy chaps: of it. And the new name doesn’t give them any clue to what your


Out with the old that’s the


www.diyweek.net strategy y,,


save the time and trouble of a strength-and-weakness analysis,


that it’s all weaknesses. Don’t waste effort trying to understand the differences between the DIY markets in the UK and Australia; just assume that what works in a large hot country in the southern hemisphere will be right for a small


you’ve got a whole new brands: exciting


awar eness, strong customer loyalty and nearly 40 years of r easonably successful trading behind it, and replace it with a completely unknown one. Throw out all the established blue-chip product brands, and fill the shelves


with massive consumer y,,


and fill the shelves instead


with things your customers have never heard of. Spend millions re-branding and re-merchandising the stores, pr omise to have the widest choice (although you have dumped half the leading brands) and simultaneously pledge to offer the lowest prices in the market. What could possibly go wrong? Well, now we know. everything could


well – maybe fatally


cold one in the north. Press on with may for scrapping an established retail brand


damaged the business considerably maybe fatally. It’s not as thoughy.. It’s not as thou Homebase was a gre at business befor e: in the 10 years up to 2016, it managed a sales increase in only three of them. But it also showed a modest profit in most years. It wasn’t a basket case. It may be now; the for ecast is for a loss of £97million in the half year and Bunnings is planning to close another 40 stores, costing hundreds more staff their jobs. Speculation is that it will try to cut its losses, and of fload the business, but it’s hard to see many prospective buyers forming a queue. How could it be made more attractive? Maybe converting the 19 Bunnings stores back


year r,, to the Homebase format would be a start.


PS: Writing for DIY Week in Febr uary 2017, I said: “Whether Bunnings’ plans for Homebase are the right ones, only time will tell.


Pretty go


the Homebase acquisition with a combination of tunnel vision and s heer arr ogance, which has


wrong. Bunnings approached UK it with one which must have abs olutely zer o brand awareness amongst its target audience.” I rest my case.


the right ones, only time will tell. It’s a brave move to announce in advance that you’r e going to dump one of the best-known brands in the UK DIY market, and r eplace it with


9 FEBRUARY 2018 DIY WEEK 19


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