NZ's largest flooring retailer expands into Aussie

8 November 2010

New Zealand largest flooring retailer expands into Australia

Flooring Xtra will expand into Australia in 2011, exporting the successful cooperative business model that has seen it grow into New Zealand’s largest flooring retailer within twelve months of inception - in spite of the tough economic conditions.

Launched in July 2008, Flooring Xtra now has 55 owner-operated stores nationwide and provides a full range of flooring products and a comprehensive, warranted installation service to both the domestic and commercial markets. Flooring Xtra was initially created by 18 core stores that broke away from the franchise operations of a prominent New Zealand retail flooring chain.

Australia has always been a target for Flooring Xtra. Flooring Xtra Chairman, Henry Van Dyk, says the group’s achievements in New Zealand have excited interest in the fragmented Australian carpet retailing industry.

“Our success is built around providing customers with a full service flooring option, whilst retaining a focus on the local communities within which we operate and the wider environment. It is a winning proposition for both our store owners and customers.”

In a first for the flooring industry in Australasia, the group is advancing its reputation for delivering value for customers with a programme for suppliers. This will set standards for the delivery and presentation of products to Flooring Xtra stores that will further enhance the customer experience.

“The Australian industry is very different from New Zealand, with buying and factoring groups often with weak branding and a lack of consistency in presentation.” Mr Van Dyk says.

“When we launched the brand in 2008 we very much had an eye on Australia. However, we have achieved both our positioning goal in New Zealand and access to Australia at a lot quicker than expected.”

Entry into Australia is being achieved by a licensing agreement with Consolidated Flooring Pty Ltd. This is a company owned by Scott Enno and Chris Sheehan who, along with their Chief Executive, Steve Griffin, will drive the implementation of the Flooring Xtra brand. Scott and Chris recently purchased Independent Carpet Retailers, who have in excess of 126 unbranded stores, a number of whom are expected to take on the Flooring Xtra brand.

“Based on their projections, we anticipate there will eventually be in excess of 160 Flooring Xtra shop fronts across Australasia. “

“The agreement will entitle them to use of our brand, intellectual property and retail systems. Both companies will operate independently but we expect operational and range synergies to be developed over time. While the New Zealand Group operates as a co-operative, Consolidated Flooring will have a licence agreement with its owner operated stores.”

“The ownership structures of both operations are closely aligned, with all stores being owner operated. While we considered looking at a structure with company owned stores and resourcing it with Australian partners, it soon became very clear that for long term viability, sustained profitability and customer service levels, an acquisition strategy based on company owned stores would have been high risk and ultimately unsuccessful.”

“Our core values, of local owners operating with honesty and integrity in professionally run businesses, which are an integral part of their local communities whilst being mindful of the wider environment, will be core in Australia as well.”

“Our senior New Zealand management – CEO Don Barry and Financial Controller John Weijermars - will be heavily committed in the next few months to helping our Australian partners implement the brand.

“The founding Directors of Flooring Xtra – myself, Andrew White, Butch Goodwin, Paul Rillstone, Don and John are very proud of what the Flooring Xtra Group has achieved to date. We have a fantastic bunch of member shareholders in NZ who have enabled us to grow to the extent that we have. We are not aware of another retail brand, in a mature market segment, which has taken the number one spot within twelve months of set – up. To then be invited into Australia within three years of operation caps it off.” Mr Van Dyk says.

ENDS

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