Howards Storage World has plans to “get rid of the old to make way for the new”, launching a 70% off sale after announcing the identity of its new owner.
In a statement, the retailer revealed that former Sportland Group executive Enayat Ghiasi has bought the business’ assets, brand name, and ongoing business. The business and its importing company have been sold to the companies My Home Storage Pty Ltd and Store Trade Pty Ltd, of which Ghiasi is the chief executive.
Franchised stores were not included in the sale, as the administration process never affected them. Twenty nine of the Howards’ 58 stores are company-owned.
In a statement, Howards Storage World describes Ghiasi as “a highly experienced retailer with international and local retail and franchise experience”. Ron Pugsley, a previous franchisee, has been appointed chief operating officer.
“Customers will be seeing more great time and space saving products from Howards Storage World and we will be doing everything possible to make their lives easier,” Pugsley said in a statement.
The company reports 160 jobs were saved as a result of the sale, and 46 of the 58 stores will remain open.
“Once again a viable business, we currently seek to grow the Howards Storage World brand now that our own house has been reorganised,” the company said in a statement.
“Together with our franchisees we look forward to a return of the Howards Storage World that has been so well supported and loved since its inception in 1997.”
The retailer collapsed into voluntary administration in late 2016, being placed in the hands of administrator Deloitte.
It continued to trade throughout the process and a buyer was found last month, but was not named until recently.
In an email from the retailer to shoppers yesterday it announced a 70% off sale, to “get rid of the old to make way for the new”. The sale will be rolled out both online and in “participating stores only”.
Sale good for repositioning, but emotional connection required
Retail expert at Retail Doctor Group Brian Walker says running a deep discount sale after a purchase of a business is key to preparing the business to reposition itself in the market.
“This will position them well for the next phase, but it may impact their re-entry into the market for a little while,” Walker told SmartCompany.
“When companies move heavily into sale activity, it can take a bit of money out of the sector and cause a bump for competitors.”
Walker also believes these sort of sales can entice new buyers and provide awareness for the brand, saying it provides consumers “exposure to inventory”.
Walker believes Howards entered voluntary administration due to the rise of other “big box” retailers and notes the company will need to change its perspective to stay afloat.
“If you look at the relative demise of Howards Storage World and the relative rise of Kmart and the like, it’s not without some parallel,” he says.
“The commoditised value end of the market is the domain of big-box and discount retailers.”
Speciality retailers like Howards are more suited to “aspirational and emotional connections” with customers, says Walker, which the business failed to achieve.
“It’s very challenging to build that connection with what is fundamentally kitchen and bathroom products,” he says.
To succeed, the brand will now need to find that connection, says Walker.
“I think they need to look at aspects of their size, range, and how they can be more targeted and segmented in their offer,” he says.
“They’ve got to create a branded and unique aspirational story, something people can emotionally connect to.”
SmartCompany contacted Howards Storage World but did not receive a response prior to publication.
First published on Smart Company, 10th March 2017.