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David Richards

Balmoral Burn Becomes Balmoral Churn Mosman Residents Angry

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The Balmoral Burn appears to have become the Balmoral churn, after thousands of dollars worth of damage was done to the Balmoral beach foreshore in preparation for Sunday’s race up and a “silvertail” dinner which is being held in a massive tent erected on the sand.

This is not the first time that the Humpty Dumpty Foundation has found themselves in strife with local Mosman residents. 


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In 2009 the charity organisation and Mosman Council forked out thousands of dollars to repair damage to the foreshore parks, after trucks delivering material for a night time Beach Party churned up grass and plants when erecting a giant marquee on Balmoral Beach.
This year the damage is extensive due in part to the recent rains say organisers.
According to Paul Francis the Executive Chairman of the Humpty Dumpty Foundation the “Silvertail” dinner is an important event that raises money for charity.
When asked about the collateral damage left behind by the event he said “We raise thousands of dollars for charity in the past we have contributed to the repairs of the foreshore. Mosman Council has also contributed and they have been extremely helpful”.
When asked why trades were allowed to drive their trucks across wet parks when a wide path was available for access he said. 
“We have event management on site that is supposed to manage this”.


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Kathleen Jackson a mother of two children said “This is disguising. It is not the first time that the park has been destroyed by the Humpty Dumpty Foundation they did it in 2008 and 2009. Now they have spread themselves across three areas of the foreshore.”
“I come here every few days with my children and because of the mess we will be unable to use the park. Mosman Council need to take control of what is happening on their property”.
Gillian Parkes said “This is environmental vandalism of the worst kind. The Humpty Dumpty Foundation know what they are doing and it is clear that they don’t care or else they would put into place procedures to prevent the damage occurring”.
She added “All they want to do is use a prime location to run their event and then disappear for another year leaving the cleanup to Mosman Council. They did it last year and the damage took months to repair. All they do is throw some bark on the damaged areas in the hope that the damage is hidden the problem is that the bark gets blown away and large slabs of damaged park is exposed to hundreds of people who use the park area”.


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Officials from Mosman Council did not return our calls.
If you want to have a say on this send me an email to dwr@4squaremedia.com

Clive Peeters Looking For Cash As Sales Slump And Profits Evaporate

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Shares in appliance and consumer electronics retailer, Clive Peeters, have fallen 34% today after the company reported a $4.5 million dollar loss with little hope of future profits from the company who last year got back over $16 million from their former payroll manager.

The company has also said that they are currently in talks with their bankers about future funding with analysts tipping that the company is set to struggle going forward as the market softens and demand for consumer electronics and appliances slow.

Currently, the former payroll master of Clive Peeters, Sonia Causer,  is facing theft charges in a Melbourne Court after an extensive investigation revealed that close to $20M dollars was stolen from the Company over a two year period. The theft went undetected by senior management.

In the three months January to March 2010, the company reported a loss of $4.5 million. This compares to a loss of $0.6 million for the same period in 2009.

The company is tipped to make a bigger loss in the last quarter of the 2009/2010 trading year after reporting that April sales have deteriorated.

In a report to the ASX, Clive Peeters said trading conditions at the beginning of H2 2010 for the big ticket discretionary retail sector were challenging and that the receding effect of the Federal Government stimulus packages had begun to affect consumer spending.

 

The board believes that the cumulative effect of five official interest rate rises in the last seven months appears to be having a significant effect on consumer spending.

Earlier today the Australian Reserve Bank increased interest rates a further 0.25% to 4.5%. This will put pressure on Clive Peeters borrowing, say analysts.

Greg Smith, Managing Director said “The combination of very subdued sales and margin pressures will materially impact the trading outlook of the company over H2 2010, despite the company’s successful cost reduction programme, which it implemented over FY 2009 and has maintained over FY 2010 to date.

The company is still hoping for some improvement in retail conditions over the months of May and June 2010, which are traditionally stronger months in the second half of the financial year. Also the major event of the World Cup football and the progressive release of a host of new home entertainment and technology products, including 3D and Internet TV, are expected to stimulate some sales growth over these two months, and hopefully beyond”.

Smith added “The reports of a strengthening housing market, an improving unemployment trend and forecast economic growth all provide some grounds for optimism”.

Spam Levels Fall 50 Percent After Illegal Networks Smashed

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The Australian Federal Police have in part contributed to an International operation that that has seen global spam levels fall by almost 50%.Taking part in an operation that started in August 2010 the AFP has been working closely with several police forces including Scotland Yard and the FBI and a private security Company LastLine as well as various ISP’s, to hurt the networks behind the illegal online operations.

Research compiled by security firm Symantec show that the amount of junk e-mail messages flowing around the net has dropped 47% in three months. Kaspersky Labs had previously reported falls in September of spam of up to 81.1% of all e-mails following a joint operation by various police forces to cut out International spam.

The operation against individuals and organisations that was sending botnets and gathering illegal intelligence such as credit card details and personal banking details has seen several organisations shut down.

Yesterday the Australian Federal Police (AFP) and online security firm Symantec joined forces to promote consumer awareness of cybercrime with a new education program called BLK MKT (Black Market). On hand to support the cause were Stephen Conroy and Attorney-General Robert McClelland, who said that the Government was continuing to push for a “secure, resilient and trusted cyber environment”.

 

According to Symantec’s 2010 Norton Cybercrime Report, 65 percent of adults worldwide have already fallen victim to cybercrime, while in Australia the statistic is slightly higher, with 69 percent of adults affected.

According to police sources in Europe, one of the biggest successes of the joint operations was against the Pushdo or Cutwail botnet, which had been in operation since 2007 and was thought to be sending about 10% of global spam.

The BBC said that an international operation co-ordinated by the security firm LastLine managed to get 20 of the 30 servers controlled by the group shut down. The servers were turned off with the help of the internet service providers unwittingly found to be hosting them.
 
As a result, many of the “drone” PCs in the huge botnet used to send e-mail were cut off and no longer relayed the junk messages.

Millions of machines around the world including several in Australia are turned into spam-sending “botnets”.

Bredolab was another big botnet hit in October thanks to work by the hi-tech division of the national crime squad in the Netherlands. The arrest of an Armenian man thought to be the botnet’s controller led to the closure of the 143 servers linked to Bredolab.

At its height Bredolab was thought to involve up to 30 million computers around the world and be capable of sending 3.6 billion e-mails every day.

Comment: Has Kogan Online Got Cash Flow Problems?

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COMMENT: The move by Kogan Technologies to solicit consumers to pay upfront before one of his products is manufactured in China smells more like cash flow issues than offering a consumer a big discount benefit.

This week Ruslan Kogan, founder of online retailer Kogan Technologies, launched  ‘LivePrice’ an incremental pricing scheme, which he says allows customers to purchase a product for a lower price earlier in its production cycle.

See original story here

But I supect the issue is more about cash flow than consumers having to wait months to get a product.

As Gerry Harvey, CEO of Harvey Norman and arch enemy of Ruslan Kogan, was calling on the Federal Government to introduce a 10 percent GST on all online transactions under $1,000, Ruslan Kogan would have been sweating on how much business overseas web sites are sucking out of the Australian economy.

In reality overseas web sites are more of a threat to Australian online sites than they are to branded retail stores in Australia because a consumer who is prepared to shop online is most likely shopping for the cheapest price.

Having owned Digital Home, which was an online trading site that we sold to JB Hi fi to become what is today, JB Hi Fi’s online operation, I know firsthand the difficulties of running a local online trading operation.

By majority, local online operators are running web sites that are nothing more than a marketing front. Once an order is placed the operator who often takes the money up front for a product, then places an order on his supplier, which in a lot of cases is a distributor like Ingram Micro, or Synnex, or the hundreds of other distributors who are now selling products such as Smartphones, Apple accessories, TVs  or PCs to online operators.

This mode of operation means that the cash is in the bank before the online operator has had to place an order on his distributor.

In the case of the Kogan Technologies’ web site he is primarily selling “Made in China” products such as TVs appliances, Tablets, Set Top Boxes.

 

 

Another issue for Kogan is that Australia is known for short runs, when it comes to manufacturing products for this market and the fact that Kogan is a very small operator further impacts his ability to get the cheapest price from a manufacturer who is more interested in large runs than short runs. On the up side Kogan can very easily identify a no brand product made in China and then have the manufacturer slap a Kogan logo on the device.

For Kogan the issue is cash flow and I suspect that this is why he has started offering consumers an upfront deal that if they pay for a product before it is manufactured they get a discount.

The Kogan model operates in almost reverse as to how most online operators trade for the simple reason that he has to mostly, pay for a product up front, then wait for it to be manufactured and shipped from China to Australia. There are also handling and distribution costs which have to be paid for upfront.

In some cases Kogan is advertising a product for sale using pictures and words, taking an order and then having the consumer wait for delivery. Ben Knapinski is a disgruntled Kogan customer who had to wait two months to get delivery of a Kogan 46″ LED TV which Kogan claimed was superior to what Gerry Harvey was selling in his stores.

When Knapinski finally got his Made in China TV he described it as “absolute rubbish”.

“I don’t even want to put it in the kids play room as I am worried the flickering and jitter will hurt their eyes it’s that bad” he said.

In any online operation cash flow is king and margins are thin. I also suspect that Australian independent online operators that are not aligned with a major consumer electronics or IT brand are going to come under pressure next year as more consumers move online, Kogan among them.

Harvey Norman To Add $500M In Revenue After Buying Clive Peeters

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Harvey Norman Holdings have snapped up Clive Peeters and WA retail group Rick Hart for the basement price of $55M. The acquisition is tipped to add an additional $500M to Harvey Norman revenues.

The deal involves approximately 38 stores however speculation is mounting that some of these stores will be closed as part of a rationalisation by Harvey Norman. Six loss making stores were closed last month.
There is also speculation that Harvey Norman Holdings will trade as Clive Peeters and Rick Hart stores.
Former Clive Peeters CEO, Greg Smith, a former accountant who was also the largest shareholder in Clive Peeters, will get nothing out of the deal with the bulk of the Harvey Norman payment going to the National Australia Bank who last month appointed receiver Phil Carter from corporate advisory firm, PPB.
Late on Friday night Harvey Norman Chairman, Gerry Harvey, admitted that the retailer has always had an interest in buying out Clive Peeters, but the high cost of several leases associated with the stores meant that the better option was to let the stores go broke and then bid for the remaining assets with the lease liabilities. 
Harvey told the Herald Sun in Melbourne: “We were always interested in Clive Peeters but we couldn’t make a bid for it or anything because they had a number of onerous leases,” 
“So it had to go into receivership before you could actually negotiate some of those leases.”
Mr Harvey said it was no surprise that the business went bust and he was waiting to make his move on the company.”It’s been common knowledge for a long time that Clive Peeters is on the verge of insolvency,” he said.
Clive Peeters was forced into voluntary administration on May 19 by the National Australia bank who refused to extend the company’s borrowings. The debts of the retailer were over $160 million.
On June 11, receiver Phil Carter of PPB Pty Ltd said 75 jobs would be lost from the closure of six underperforming stores.
In a statement to the ASX on Friday, Harvey Norman said that it had agreed to buy “certain stock and plant and equipment located at certain of the locations, knowhow, intellectual property rights and systems”.
Harvey Norman is expected to take over about 30 stores under the Clive Peeters and Rick Hart banners. But nothing has been unveiled yet about three warehouses belonging to the company.
Mr. Carter was appointed as receiver by National Australia Bank in May. He closed six stores and finally the business was put up for sale.
Carter said that Harvey Norman has assured the receiver that it will be providing employment to the majority of Clive Peeters and Rick Hart employees.

Discounting Hurting Claims Harvey Norman Director

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One of the most senior executives in the consumer electronics industry has called for manufacturers to stop discounting. He claims that factories making TV’s to notebooks are slashing costs in an effort to support their faltering manufacturing operations and that the move is set to impact CE retailing in Australia in a bad way.One of the most senior executives in the consumer electronics industry has called for manufacturers to stop discounting. He claims that factories making TV’s to notebooks are slashing costs in an effort to support their faltering manufacturing operations and that the move will have a big effect on CE retailing in Australia.
David Ackery the General Manager  of Electrical at Harvey Norman said “discounting is rampant and in many cases manufacturers subsidiaries in Australia are being forced by factories to discount. This is not good because if we going to sell less we need to have some profit left in a product to survive”.
“Margin is good not bad because without margin all we are doing is product churning. During the past 12 months we have seen increased sales of notebooks and flat panel TV’s but at the same time margins have been eroded because of rampant discounting”.
Recently Channel News revealed that the margin in flat panel displays have dropped in price by as much as 30% monitors by 45% and that notebooks have fallen by up to 40% yet despite this Companies like Sony and Panasonic are introducing big price rises due to the fall in the Australian dollar and the rise of the Japanese Yen.
Len Wallis of Len Wallis Audio in Sydney supported Ackery in his call for more margin in products “Discounting is having a big knock on effect. We cannot buy a TV product  that is under the price that the mass retailers are selling it for example a Sharp large screen LCD TV at Bing Lee is $160 cheaper than I can buy it for. Plus you get a free Chinese dinner set and the chance to win a trip to Hong Kong”.
He added “The mass retailers must be suffering as they are not making much money selling TV’s even worse is that they will be dependent on rebates and these don’t come through for several weeks so many will be cash flow negative straight after they have made a sale”.
Several manufacturers contacted by ChannelNews were not available to comment.

Dick Smith Grows 9%

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Sales at the Woolworths group’s Australian and NZ consumer electronics stores – including the Dick Smith chain – grew 9 percent to $839 million in the six months to December 31, the group said yesterday.

Sales at the Woolworths group’s Australian and NZ consumer electronics stores – including the Dick Smith chain – grew 9 percent to $839 million in the six months to December 31, the group said yesterday.

Growth in the second quarter was 11.6 per cent compared with just 6.1pc in the first quarter – possibly reflecting extra Christmas sales spurred by the Rudd Government’s stimulus program.

A Woolworths statement to the ASX noted that the consumer electronics sales spurt had been delivered at a lower margin “as we transition out of certain categories and experience both changes in sales mix and a highly competitive market.”

Woollies opened 29 new DSE stores and three Powerhouse stores during the six months, talking the total to 433 stores.

A joint venture with Tata in India now has 26 consumer electronics stores operating under the Croma brand, producing sales of A$90 million for the half year.

Panasonic Look For Growth By Outsourcing Sales And Merchandising

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Panasonic, who are looking for aggressive expansion across several categories, has moved to outsource a large part of their sales, training and store merchandising operations to US Company Crossmark who have more than 2,000 employees in Australia.

According to Panasonic CEO Steve Rust the move will give Panasonic extensive reach across Australia including rural and metro areas that they are currently struggling to service.

“More importantly it will allow Panasonic  to expand the categories that we compete in” said Rust who indicated that he is looking to move into the hardware market with a range of electrical tools that Panasonic sell in Japan and into healthcare and grooming markets, via pharmacy and Supermarket chains.

“We will retain our direct relationships with the big retailers where we are selling our consumer electronics goods, but we will outsource our selling merchandising and in the future training which is a costly overhead” said Rust.


“Primarily, we are looking to expand our selling capability across Australia especially in the smaller outlets where Crossmark is already operating. We are also looking at bringing a lot of new products into Australia and it makes sense to use an operation like Crossmark as they have over 2,000 full and part time staff who are dealing everyday with pharmacies, supermarkets, hardware chains and other retail outlets where we believe, we can range and sell, Panasonic products that we are not currently bringing into Australia”.

Last month, as a forerunner to the Crossmark announcement, Panasonic Australia announced a major restricting of their Australian operation with the laying off of over 20 staff.

Rust said that 11 Panasonic sales staff in the New South Wales office have been offered positions with Crossmark.

More to follow.

 


 

Comment: Whats Wrong At LG OZ?

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COMMENT: The exit of David Brand from LG Australia was well and truly on the cards when the company was exposed by Choice Australia for fudging the truth about their products.Now the Korean company,  who is facing multimillion dollar fines, is undergoing a major shakeout and relaunching LG Australia, after the appointment of William Cho, the former President and CEO of LG Canada, as Chief Executive of LG Australia.

Cho, who was shipped into Australia days after LG Australia was found to have lied about the power performance of their refrigerators, is a tough performance-driven operator with a track record of success in the Canadian market where he headed the company’s operations.

High on his agenda will be improving LG Australia’s profitability. In the 2008/2009 financial year they only managed a $13K profit on nearly a billion dollars turnover.

In Australia, Cho has already taken action to fix the company’s endemic problems with the axing of several key managers. Its been suggested that this is only the start and that several other heads, including several in sales, will be axed as part of the restructure.

This could be a precarious exercise as the likes of Graeme Cunningham, the current sales director of LG Australia, has excellent contacts, is trusted by the retail channel and has often been the glue that has held the LG operation together in Australia.

Among those who have gone from the company since Cho’s appointment  are David Brand, the former Marketing Director, Carli Wilson, the former Marketing Manager of the company’s struggling Communications Division, who late last month was still running what some observers described as “froth and bubble” marketing events for handsets that are going nowhere in the Australia market up against offerings from arch rivals like Samsung, HTC and Apple.  

Cho has already started to stamp his own management style on the Australian operation with the appointment of Kim Barnes as marketing manager of consumer products. Barnes came from LG Canada. He has also hired former Coca Cola executive Mark Van Dyke. He is also on the lookout for a new Marketing Director who will be given a brief to basically relaunch the company.

During the past three years Brand has had one disaster after another from a Scarlet TV launch that went pear shaped, to multimillion dollar phone launches that did little to stimulate sales, to the exposure of LG as a serial offender in the appliance market which resulted in LG being nobbled three times by the Australian Competition and Consumer Commission for misleading consumers. There was  also the issue of several recalls of LG air conditioners and appliances.

 

The LG slogan “Life’s Good” was well and truly on the nose.

Five years ago under the direction of Paul Reeves, LG’s former Marketing Director, the LG brand was hitting a sweet spot and the slogan Life’s Good really meant something with consumers because it was unique, locally developed and above all in touch with the Australian way of life.

Then along came Brand, who in reality was a puppet of what his Korean task masters wanted.

Killed off  was the memorable local advertising. This was replaced with big budget International advertising that failed dismally. The big budget Scarlet TV campaign came and went along with several other International campaigns.

At one stage Brand was told by his corporate masters in Korea that he had to appoint WPP group agencies in Australia. This resulted in Mindshare taking responsibility for media planning and buying.

George Patterson Y&R was appointed to  handle above-the-line advertising duties, while Publicis Mojo’s digital arm Publicis Digital, were appointed to manage website and digital marketing.

Brand was then forced to call a pitch for public relations. This resulted in several WPP owned PR companies fighting among themselves as to who would get the spoils.

The incumbent, Burson Marsteller, threw in the towel and WPP owned Pulse was appointed to set up a new operation called LG One. This operation was driven out of Korea, with the local management given little opportunity to build the local brand.

In reality LG is a dynamic company. Their display operation is among the best in world, even Steve Jobs at Apple gives them credit for that with the company tasked with the development of new AMOLED and OLED screens for several Apple products.

 

They also make great appliances.

After gaining popularity with their mobile phones in Australia, LG has failed to keep pace with offerings from Samsung, HTC and Apple. Big investments in fluff PR events using the likes of Chris Noth came to nothing.

What LG needs to do is invest in local marketing and not try and feed Australians on a diet of overseas marketing swill.

Their advertising needs to be locally relevant and focused, and this will only be achieved if they empower a local marketing director who is given the choice of either using an International campaign or a locally developed campaign.

The company also needs to talk more about the brand and stop dishing out boring product press release that are more product numbers and specs than brand substance.

They also need to develop their people to be brand ambassadors, talking about LG as a company.

Because, at the end of the day, a brand is remembered long after a product has become obsolete.

Medion A Gutsy Solid $999 All In One PC Shows Up HP & Dell

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Evolution not revolution is something that European companies are very good at and this shows through with the new Medion Akoya MD8870 all in one touch screen PC.

You only have to look at products from Companies like BMW, Audi or Mercedes to recognise that evolution in design and functionality stands the test of time over a flashy new product with all new bells and whistle features.
Medion is a German PC manufacturer who appear to be taking the same approach with their new all in one touch screen PC.
While there was no difference between the look and feel of their previous all in one PC  the 21-inch display screen of their new offering, which is selling for sub $1,000 simply lit up to reveal a stunning new display that screamed quality. Images were sharper and applications like games performed significantly faster while rendering to the screen in a way that detail was significantly improved.

The HD resolution of 1920 X 1080 was excellent especially when it came to watching a TV program or a DVD movie in 16.9 cinema format.
However the Window Media Centre software is still a pain especially when you look at what Google is doing with their Google TV offering.
A big improvement is the NVIDIA GeForce 9100 graphics card which comes with 256 MB of shared memory.
This delivered a significant improvement over the previous model.
This PC which sells for $999 is all about under the bonnet improvements which is amazing considering the previous model cost over $1,299.The Intel T4500 2.3GHz processor is significantly faster than the previous model.
Using WorldBench 6 on the PC it recorded a score of 112. This is a significant jump from Medion’s older P4010 which we reviewed last year it also out performed HP and Dell’s all-in-one PC offerings. This is the same score that PC World recorded during the same test.
The all in one PC comes with a 1TB hard drive and the internal stereo speakers perform well.  It also has a built in TV tuner. 

 
The only problem I found was that the touch screen was ultrasensitive; resulting in a simple touch to the screen causing problems especially when one is working on a document.
Sitting on a desktop or in a kitchen or lounge this PC looks simple and smart. The stylish sleek design which is very European with smart aluminium trims around a piano black surface. A simple sturdy stand, that easily flexes allowing the PC to be easily set to an optimum viewing position, delivers excellent functionality.
The PC comes with an integrated sound system and 6 channel analogue audio. A built in camera delivers an excellent image when used with Skype even in low light.
The only irritating feature is the Medion keyboard. Its feels very cheap when typing and my recommendation is to that you ditch it and buy yourself a new wireless keyboard and mouse.

On the software front this PC comes with a 32 bit version of Windows 7 Home Premium which is a big improvement on Vista. A 64-bit is included, although a user needs to install it manually. Also in the pack is Microsoft Works, and Windows Live Essentials.
When performing such tasks as word processing, spread sheets and web browsing and video viewing, the Medion handled itself well. The dual-core CPU can run several programs simultaneously; there was no perceivable slowdown when switching between applications.
To the left side of the screen is a lip which hides three easily accessible USB 2.0 ports. This is an excellent place to put frequently used slots. Just above the USB ports is an SD card slot and a headphone microphone jack. 
On the rear panel of the PC a range of ports can be found: four USB 2.0 ports, an audio line in and coaxial digital output, a Gigabit Ethernet socket and a TV antenna input. PS/2 ports are also available for connecting older keyboards and mice.