Just like with the banks, this wasn’t a malicious error – but it was systemic and it was ridiculously sloppy. Super Retail might have been born from founder Reg Rowe’s garage, but it’s a $1.6 billion company now. This stuff just shouldn’t happen.
There are two big differences in the way the banks handled their scandals, and the way Super Retail has dealt with this issue.
First, it’s acting swiftly to repay current and former managers, including with interest of 5.5 per cent.
And secondly, Birtles is taking ultimate accountability, bringing forward his handover to Anthony Heraghty from March 31 to February 20.
That might not be a huge difference in practical terms, but it’s an important symbol that Birtles leaves behind for his team, who he was set to address after speaking to Chanticleer on Tuesday.
“I am accountable for the organisation’s controls and process and there’s clearly been a significant break down in those,” he told Chanticleer.
It’s a shame Birtles will go out on this note, because preliminary earnings figures released on Tuesday show a retailer defying the doom.
Earnings before interest and tax rose 9.6 per cent in the first half and trading in the first six weeks of calendar 2019 was impressive. Rebel Sports’ like-for-like sales jumped 8 per cent, as did sales at outdoor group BCF.
Birtles offered some fascinating observations on the future of retail as he took his leave.
His first was around the need for retailers to keep investing despite the gloom, including in onmi-channel retailing (not just selling online, but also fulfilment options) and particularly inventory.
“That’s something as a management team we’ve been wrestling with. As we need to compete online, having better and better stock availability is important.”
He also warned that consolidation – which in the retail world generally means companies going under – would continue, as categories are whittled down to one or two national players and a handful of smaller rivals, either local stores or very niche operators.
Those would-be national chains, with 30 or so stores, will be stuck in the middle.
“I think they are going to find it very tough,” Birtles says.
Such a situation appears to be playing out in the outdoor space (think fishing and camping) where BCF plays, with discounting ramping up as some new players enter the market.
Super Retail has decided to defend its market share by investing in price, and increasing inventory. If early 2019 sales are any guide, the strategy is working so far.