A blog on issues affecting Australia's newsagents, media and small business generally. More ...

Month: June 2008

Bill Express restructures

Bill Express offered a slither of clarity to the market with an announcement to the ASX late today:

  • The standstill agreement with financiers and key suppliers had been executed.
  • Four Directors have resigned.
  • The company’s CFO (who joined the company late last year) has been appointed a Director.
  • The company is proceeding in its discussion with the Al Othman Group about restructuring and recapitalisation.
  • The company is not proceeding with the previously announced APN/ETT transaction.

Coincidentally, ETT today sought suspension from the ASX as it seeks to resolve a commercial dispute with IPStar. Bill Express owns 43% of the shares in ETT.

I’d expect the discussions with Al Othman to proceed at speed given that they are already significant shareholders in Bill Express and licencees of its technology overseas.

Bill Express has made no statement about the reported Federal Police investigation into its affairs. Nor is there any update on its deal with Swish Group about managing its retail screen network or the advice the company has received that it would be a respondent in proposed Class Action by newsagents.

I would expect Bill Express to now seek to mend its relationship with newsagents. I’d expect the company to seek to do this through a third party. Work has been done on this over the last two months with several prospective “partners” since the end of the commercial agreement with the ANF.

The ANF confirmed today that it has 176 expressions of interest from newsagents to support its proposed legal action against Bill Express. My understanding is that more than double this number is supporting the more advanced Federal Court action originally commenced out of NSW.

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Bill Express

New Idea supports McGrath Foundation

mcgrath.JPGKudos to the folks at New Idea for donating ten cents from every copy of this week’s New Idea sold to the McGrath Foundation.  We are sending in a donation of $150 to the foundation on behalf of our newsXpress Forest Hill family.  It is the least we can do given the magazines sold over the years about Jane, Glenn and their journey.

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magazines

Better Homes and Gardens birthday

fhn_bhg.JPGWith all three magazines promoted at the counter selling out last week, we created a Better Homes and Gardens display Saturday. The free candles, celebrating the magazine’s 30th birthday, made BHG fly off the shelves.

Even though some excellent candidates arrived today (Marie Claire, Bazaar) for this space we will leave BHG in place for another couple of days.

Title choice is crucial to to achieving the best from this counter space and this can only be made at the store level.

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magazines

Foreign language newspapers

foreign_newspapers.JPGIl Globo, Neos Kosmos and Sing Tao Daily are part of an important category for newsagents. Foreign language titles bring in loyal customers who visit daily or at least several times each week. By intelligently promoting around these titles, and respecting the opportunity their loyalty brings, we are able to make the newspaper purchase quite valuable.

I see foreign language newspapers treated as second class citizens in too many newsagencies. Since they are effectively exclusively to us in many areas we ought afford them appropriate respect. By respect I mean treat their display with some are, make sure you have the product out on time, offer a putaway service, promote the masthead in-store to let people know you are proud to carry the product. This will be noticed by customers.

Good foreign language sales will drive lottery, Western Union business, mobile phone recharge and card sales – based on the sales data I have seen. There is a definite correlation between these departments and foreign language newspaper sales.

I am happy to allocate good retail space and devote management time to foreign language newspapers. They serve me well.

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newsagency marketing

Getting a police record check

Security experts tell us that asking a potential employee to agree to a police record check will sort out the good from the not so good. In Victoria, a national name check through Victoria Police costs $29.80 – a small price to pay for due diligence on someone who will handle your cash. Click here for details about record checks through the Victoria Police.

I know of three terminations in the last month where getting the check would have saved the newsagents affected several thousand dollars.  In our on situation, a check years ago would have saved us an expensive mistake.

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retail

Promoting Tour de France

mags_papers.JPGLike most newsagents we have the guide to the 2008 Tour de France. We have taken the opportunity to co-locate this title. It is in our bike category as well as above The Age for the next week.

Choosing titles carefully to display above newspapers can drive excellent additional sales.

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magazines

e-paper advances

Two interesting news items about e-paper / e-ink this week:

  • Ryosuke Kuwata, E Ink Corp’s vice president in charge of the Asia Pacific region claims that electronic newspapers could be as close as next year according to Tech On.
  • Dutch company Polymer Vision has demonstrated the first prototype of a rollable full colour display.

Newsagents need to understand that the e-paper model will connect publisher and reader more closely than ever before.  The daily visit to the newsagency will not be necessary to purcahse the newspaper.  Instead, the best newsagents can hope for in this future world is accepting a recharge transaction.  But that it probably going to be handled through mobile phone credit.

While all of this is years off, it is important to understand where publishers are investing in their future.

I don’t see any of this as bad news.  Like any change it is an opportunity.

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Media disruption

Better Homes and Gardens birthday

bhg_jul08.bmpThe folks at Better Homes and Gardens have gone all out for their 30th birthday celebrations. The candle giveaway, which is a challenge to display in regular fixturing, is making the title fly off the shelves.

At Frankston we have a power end display (see photo) which is working a treat. We also have the title in two other places for the first week, to capitalise on the TV show coverage as well as the promotion other retailers are doing.

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magazines

Magazines at the counter

Our That’s Life counter promotion lasted just over two days.  With 95% of product sold we changed it during Friday to Good Taste, promoting the free oven timer.  We sold all ten copies by Saturday morning.  I am certain that we would have only sole one, maybe two, over the same period if we did not promote the magazine and the giveaway at the counter.

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magazines

Bill Express and the Technology Business tree

I and some colleagues have been doing some research into Technology Business International Pty Ltd (TBI), the company through which newsagents signed lease agreements with for the Bill Express equipment.

  • TBI is owned by Technology Business Holdings Pty Ltd (TBH) and has two Directors, one of whom is Sandro DiDonato.
  • Technology Business Systems Pty Ltd (TBS) is owned by TBH and has one Director, Sandro DiDonato.
  • TBH has four shareholders, the largest (96.5% of issued capital) being Equip Rentals Pty Ltd and one Director, Sandro DiDonato.
  • Equip Rentals Pty Ltd was deregistered on 9 December, 2007. It had one shareholder, Sandro DiDonato and two directors, one of whom was Sandro DiDonato.

It would appear from letters received by newsagents recently that TBI has moved from the Bill Express Eaglemont Head Office to Helen Street in West Heidelberg. It has been suggested that this move coincides with the move of treasury functions to the Helen Street address. This is the address used for Australian Private Networks.

  • APN is primarily owned (95.5% of issued capital) by Telecards Asia Pty Ltd and has one director, Sandro DiDonato.
  • Telecards Asia Pty Ltd is owned by Sandro DiDonato and has one director, Sandro DiDonato.

In their February 29 announcement of half yearly results, Bill Express announced that it would acquire a controlling stake in APN.  The announcement talked up the Activ8me business.  The due diligence for the purchase was expected to be completed in the first week of March.  The company has not made an announcement regarding APN since.  There is a question as to whether Bill Express should have disclosed that this is a related party transaction.  While I am not saying it was, if I were a shareholder in Bill Express I would want the question asked.

I would like to know more about the reported visit to Bill Express headquarters by the Federal Police and what their visit relates to.

There are many questions which come to mind as I go through the tangled web of companies:

  • Questions about APN and its financial and otherwise relationship to Bill Express.
  • Questions about ETT, a public company linked to the Bill Express / OnQ group.
  • Questions about OnQ itself and its tangled relationship with Bill Express and associated companies.
  • Questions about the legal battle between OnQ shareholders.
  • Questions about where the intellectual property which is at the heart of the Bill Express proposition is actually held.

These and other questions go to the heart of the viability of Bill Express, a matter of great interest to newsagents.

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Bill Express

Wicked Wicked

I was lucky to be in the invited audience for the first dress rehearsal for Wicked, the Broadway musical, Thursday night at Melbourne’s Regent theatre.  This was the first time Wicked was performed in front of an audience here in Australia.

Wicked is amazing, spectacular – performances, the set, effects and the story.  You are taken on a journey to into Oz, no mean feat in a 2,000 seat theatre.  The audience last Thursday gave the show a standing ovation!  I am sure it will have a long run here.

Victorian newsagents have an opportunity to get into the Wicked mood over the next two weeks as press coverage builds during the preview period to the gala opening night.  Today’s Herald Sun has a big behind the scenes spread.  The show is a big intrastate and interstate tourism draw.  Hence the opportunity to build some retail theatre around Wicked – for the sake of theatre itself.  If you’re a Tiketek outlet you have even more reason to get behind Wicked.

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Uncategorized

Success with discount novels

discount_books.JPGThe stand in the photo is very successful. The return on the real-estate and stock is excellent, above many other departments. Our discount novel customers are loyal and efficient – more than 50% of sales include items from at least one other department. Most customers are regulars in buying books and they sometimes bring friends.

We have tried a better display for these remainder novels and it did not work. In fact, we tried several approaches to improve the look. This basic stand on castors at the front of the shop works best for us. We copied this in another newsagency recently where novels were not sold and the result will be the same. A small stock and real-estate investment builds a new department which is profitable from the outset.

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Book retailing

Marketing the Tax Pack

tax_pck.JPGWe have co-located the Tax Packs in our newsagency, in the body of the shop and at the front of the shop next to our Financial Year diaries. We are treating them as a magazine in the way to promote the Tax Packs – even though they are free and we are paid next to nothing to have them available.

Being the only outlet in our centre with Tax Packs we figured it is a good opportunity to promote and help our customers. All newsagents should do that … actively promote these Tax Packs as an opportunity rather than a chore.

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newsagency marketing

No charms here

charms.JPGWe have made a decision to no longer take gift lines like these charms and similar non print product sent to newsagents by magazine distributors. We are preserving counter space for products which better suit our retail strategy and which deliver better margin, products which we choose. Counter space requires careful local allocation and it is our experience that this best done locally.

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retail

Promoting the OzLotto jackpot

oz25m.JPGThankfully or Tattersalls machines are still running, they have not cut us off overnight as threatened. I say thankfully because OzLotto has passed the $20 million jackpot sweet spot and is now offering a first division prize of $25 million. We are actively promoting this through our house syndicates and regular tickets. Our promotion reaches beyond the Tattersalls defined area and across to our main newspaper display. Thankfully the newspaper publishers don’t threaten to cut us off it we promote other product in “their space”.

We have a TV station working on our Tattersalls story in addition to the radio coverage already. I suspect this activity as well as intervention by the Minister for Gaming, the Small Business Commissioner, the State Gambling Regulatory Authority and my Lawyer has given Tattersalls reason to take another look at how they approach this. I hope so. I’m a retailer and as such want to sell tattersalls product. I have not taken any decision in my shop which I think will impact negatively on their sales or disrespect their brand.

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Lotteries

Scrapbooking Memories

scrap_magazine.JPGWe received nine copies of Scrapbooking Memories on May 30.  Today, June 27, we returned all nine, replacing them with the next issue of this title.  I am not alone in experiencing a zero sell through rate, it happens in every newsagency for at least several titles a month.  I’d like to see a guarantee protecting newsagents against this, a payment for non-performance of a title.  It is easy to determine the labour, real-estate and cash-flow costs as I have discussed here before.  Trouble is, no matter how hard newsagents try, distributors and publishers do not engage in a discussion around these issues.

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magazine distribution

That’s Life takes off

Further to my post two days ago about promoting That’s Life magazine at the counter, sales are up 31%.  We will sell out by the weekend.  While we might have achieved a kick with a counter display, it is the lip gloss gift promoted in the counter display which is driving the sales.

This 31% increase in two days, compared to the previous six weeks for the same two days, is proof of the value of having the right space allocated at the counter, creating an appropriate feature display and building this around a magazine which offers real value.  While most titles we now pitch in this space achieve significant growth, the results for That’s Life are the best.

I hope newsagents are copying our approach in terms of displays and title choices.  Smart choices are delivering easy money.

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magazines

New Visa Prepaid offer for newsagents

SCX Global, newsXpress and Tower Systems are thrilled to launch four Visa Prepaid card products through our eziPass platform. CANVAS, VCARD, Just4 and Secure Cash Xpress provide newsagents with competitive products for several demographics. Commission on each card sale is between 30% and 40%. Commission on reload is five times the commission for BOPO.

The four new Visa Prepaid products available on eziPass are:

CANVAS, a reloadable Visa Prepaid card for everyday personal use. Great for teens and small business expenses.

VCARD, a Visa number, no plastic, for easy and safe shopping online, by phone or mail-order.

Just4, the perfect gift card. Can be redeemed where Visa Prepaid is accepted.

Secure Cash Xpress, 2 linked Visa cards – top up in Australia, redeem overseas. Perfect for sending money regularly to friends and family overseas.

Further information and sign-up forms are available here. The only requirement is that newsagents are using eziPass. More than 600 newsagents partner with eziPass already.

eziPass is available, free, for all newsagents. Sign up now at: www.ezipass.com.au

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Financial services

Derryn Hinch covers Tattersalls / Intralot issue

I was interviewed by Derryn Hinch on 3AW yesterday about our dispute with Tattersalls over the placement of the Intralot terminal on our counter. He and his producers had done their homework and and this made the interview good for bringing the issues at the core out in the open. While the dispute is not yet resolved, it is intresting that two radio interviews in 24 hours led to more engagement by appropriate authorities than traditional channels of communication had achieved in weeks.

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Lotteries

Promoting Girlfriend

frank_gf.JPGWe are promoting Girlfriend magazine at the counter of our newsagency in Frankston this week between our two main registers.

Being the last week of the month we are almost overwhelmed with titles we could promote at the counter. Girlfriend sales are strong in Frankston and the giveaway with the magazine should achieve the incremental sales necessary for the space and labour allocation to pay off.

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magazines

Pricing newsagent retail real-estate

mags_counter.JPGACP and Pacific have released new titles which leverage existing successful mastheads. Each has been provided to newsagents in a counter display unit. ACP’s Woman’s Day branded ABC of Cooking and Pacific’s Total Girl Party Book should work well at the counter. I would like to see publishers offer a premium commission for counter space allocation as 25% does not cut it.

To compare to the return from other counter offers we need to achieve a minimum GP of 40%, ideally more.

I see these titles as being different to the counter offers I talk about here. The publishers have packed these two titles as if they expect counter space. The displays I and people at my newsagencies do at the counter we do because we choose to.

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magazines

Bill Express buys time

Bill Express announced to the ASX today an extension to its suspension to August 22.  The waiting game continues.  The company says it has received a recapitalisation proposal from a subsidiary of Al Othman Group.  While Al Othman houses several businesses which could provide synergy with the Bill Express model, I am surprised that the company has had to go so far from home and current partners for a financial lifeline.

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Bill Express