While Retail Adventures has survived two previous administrations, with former BRW Rich Lister Jan Cameron buying the company out of administration on two occasions, it appears the chain, which relied on a high-volume, low-price strategy, has come to the end of its line.
Brian Walker, chief executive of the Retail Doctor Group, told SmartCompany the result isn’t surprising, as general discount retailers such as Crazy Clark’s and Sam’s Warehouse rely on a “fragile model” of “high volume and low overheads, in good locations”.
While Walker says these chains may have had “some good performing stores with good numbers”, strong results in a few locations are often not enough to carry a whole chain.
“They have such thin margins to start with, and faced with rising costs, it is very hard to differentiate themselves against the big players with bigger advertising muscle,” says Walker.
Walker says the likes of Target and Big W have made “inroads” in the discount market through their pricing and merchandising strategies, in much the same way the supermarket sector is now dominated by Coles and Woolworths.
“And then we have the whole world of online,” he says.