Magazine Printer Ovato has been placed in administration. Wayne Robinson at Print21 has a comprehensive story:
OVATO IN ADMINISTRATION
In a tough day for the print industry, heatset giant Ovato is in voluntary administration, with the directors asking FTI Consulting to take over the troubled business from today.
The company says ongoing volatile market conditions, the increased cost of raw materials and legacy cost issues have continued to impact it, “leading to the difficult decision” to appoint administrators.
The administrators intend to run the company on a business-as-usual basis, as they seek the best outcome for creditors. The first creditors’ meeting will be in early August, following which the administrators will focus on efforts to recapitalise or sell off the business.
Ovato has been struggling for years; its share price has collapsed, its revenue has been rapidly diminishing, and for the past two years it has been selling off everything it can, including the former Gordon & Gotch distribution business, which went to Are Media, the Griffin Press book business which went to Opus, its Brisbane premises although that was owned by the Hannan family and not Ovato, and all its marketing businesses.
In addition, it closed its Clayton plant last year, and closed its entire New Zealand heatset operation earlier this year. Its new supersite in Warwick Farm with seven heatset webs opened three years ago.
It originally restructured the business 18 months ago, after asking suppliers to take a 50 per cent haircut and getting a $40m cash injection, underwritten by its major customer and shareholder Are Media (formerly Bauer, formerly ACP).
Ovato actually returned to profit in the first half of this year, on sales that were down to $161m, and a net profit after tax up by 282 per cent to $17.5m. Revenue fell by $75m or 32 per cent, but the majority of this was due to its sold off businesses, with sales revenue down by 11.6 per cent or $19.9m on the same period last year.
Ovato was a billion dollar printer when it was PMP, but since the merger with the Hannan family’s IPMG it has been hit with a series of body blows. Its share price has plummeted by 99 per cent from $3 five years ago to $0.089 today.
In the last three months, Hong Kong-based Left Field print group has pumped $20m into Ovato, in the form of a $5m loan, taking over a $4.8m mortgage, and buying Griffin for $8.5m. Left Field now owns 14.7 per cent of the company.
Sent to newsagents yesterday.
Effective Monday 8 August 2022, the Monday to Saturday cover price of The Australian and The Weekend Australian will increase by 50 cents.
From Tuesday 9 August 2022, the cover price of The Sportsman will increase by $1.
And from Saturday 13 August 2022, the Saturday and (where relevant) Sunday cover price of the following publications will increase by 50 cents.
- Herald Sun
- The Daily Telegraph
- The Courier-Mail
- The Advertiser
- The Mercury
- NT News
- Geelong Advertiser
- Gold Coast Bulletin
- Townsville Bulletin
- Cairns Post
- The Chronicle
An updated list of all relevant News Corp Australia publication cover prices, retail commissions and prices to account is provided below.
We ask that you notify customers of the price change and ensure your systems are updated on the effective date to reflect these changes.
We thank you for your continued support and look forward to continuing to partner with you in driving new sales opportunities.
Should you wish to discuss this with us, please feel free to contact your Area Sales Manager or our News Retail Support Team.
General Manager, Consumer Print
Cover Price, Retail Commission & Price to Account as at Monday 8 August 2022: NT NSW SA Vic Retailers
The above table shows how little newsagents make from these newspapers. In many situations, the money made does not pay for the cost of the retail, space.
While you can buy Father’s Day cards in all sorts of shops, I encourage you to shop at your local newsagency, and here’s why …
- Newsagency businesses are local. Locally owned. Locally run. What you spend is more likely to stay within the local community, your community.
- Doing good. Newsagency businesses offer Father’s Day cards that support charities. Charities like RU OK?, which do wonderful work in the community.
- Awesome range. Newsagency businesses have the best range of cards, usually more than you will see elsewhere. From fun to serious, Fram dad to pa to pop to grandpa to uncle to step-dad, the caption range is excellent. There are also cards for people who have been like a dad to you.
- Make it special. Newsagency businesses often have gifts to go with the cards. Plenty of them have Australian made cards and gifts, too, which further serve the local community. If you are not sure what to give, ask for help.
- It’s easy. Newsagency businesses are likely to offer easy shopping, grab and go. Plenty have Father’s Day gift bundles made up, ready for treats for Dad.
Shopping early for Father’s Day is good because you get to choose from the broadest range. Then, you have time to post the card and gift.
So, when shopping for Father’s Day cards and gifts this year, consider your local newsagency. They would be grateful to get your business and do their best to serve your needs.
Where you shop its a choice, a choice that can impact beyond the cash you hand over. Look at any economic study comparing the local community impact of local small business retail versus locally based big business and you will read of practical and appreciated engagement form helping a local community group, free copying for a local charity and more.
Local retail businesses, like local newsagencies, make an impact that is valuable and important.
So when you make your next shopping choice, consider local, and when you think about buying a Father’;s Day card, please think about your local newsagency. They’d love to show you an awesome range of fresh design Father’s Day cards.
They both make changes to their businesses to supposedly enhance the customer experience, and then deliver a worse experience.
It is tiresome wasting time looking for newspapers off of which you make a pittance.
News Corp and Nine Media have made things worse.
There has been a surge in the sale of Covid rapid tests last week. We have kept our price at 5 for $20.00, which is half the price of nearby pharmacies for exactly the same product.
We don’t see the Covid tests as a product off of which to profit. Rather, we offer them as a service. Most sales are to people making other purchases.
In one of our suburban high street stores we have sold 150 tests in the last 2 months.
In addition to the low-cost Covid rapid tests, we continue to offer free face masks at the counter and hand sanitiser.
What’s interesting is the shift in the last few weeks. While early in June we’d have people mocking the wearing of masks, not now.
We don’t require customers to wear masks, but we are putting messaging out in support of them.
While we wish Covid was in the past, it’s not, and it looks like it will be with us for quite a while. For our viability and for the health of all engaged with our local newsagency businesses, I think it is important we lead by example and reduce the opportunity for spread of infection.
Thank you to the 109 newsagents trading under a variety of shingles who provided sales data for this benchmark study. Your transparency will help many in our channel.
Strong first half of 2022 for local retail newsagencies.
Newsagents, overall, had a good first half of 2022 when comparing trading figures with 2021. While the increases reported are modest, this is on the back of a better than good 2021 because of Covid.
Of particular interest are strong performances for gifts, magazines, books and toys.
The results show the local newsagency as a business with a strong traffic and revenue core. They also show opportunity considering the growth in some categories for some and not others.
While this latest newsagency sales benchmark study does not include shopping centre businesses as the sample group was too small, I note that they appear to have had a rough first half – begging a question about the status of the shopping centre setting.
After comparing data from the businesses in the benchmark dataset here are the averages for business performance measurement points and categories, comparing January through June 2022 with the same months in 2021:
- Revenue: Up 2%.
- Sales count: Down 1%.
- Basket value: Up 8%.
- Items per basket: Up 6%.
- Average item value: Up 7%.
- Greeting card revenue: Down 2%.
- Magazines unit sales: Down 4%.
- Toy revenue: Up 6%.
- Gift revenue: Up 8%.
- Book revenue: Up 7%.
- Stationery revenue: Up 5%.
The percentages are small, especially when you look at 2021 over 2019, however, that earlier comparison was comparing pre-Covid with Covid, which for high street newsagencies was massive.
Since the above results are averages, there are some considerably below and some considerably above.
In terms of type of business, the best performing newsagencies I see in the data are high street suburban followed by high street regional / rural.
It’s what is not in the above benchmark results that is interesting. There are some newsagents experimenting with success. Homewares, whitegoods, hardware and spectacles are all categories delivering growth in reports for a small number of participating businesses. I can see several going from $0 to a reasonable number in on introducing the category.
Some newsagents are quitting categories, too, like ink and toner, toys for some and some agency lines.
There is also interesting data within departments, like stationery and magazines:
- In stationery, sales are strong for everyday items like pens and paper and less so for less frequently purchased items. Pens, for example, continue to command around 30% of all stationery revenue in newsagencies with strong pen sales. Given their percentage of space allocation and capital requirements, this makes pens a prized segment. I wonder whether there is an opportunity for newsagents to price some stationery with a convenience premium.
- In magazines, weeklies experienced the biggest decline, an average of 9%, followed by women’s interests while special interest, crosswords and craft & hobbies experienced above average growth to sustain overall magazine performance.
In this benchmark dataset there are 2 newsagencies that introduced gifts, toys and plush to their businesses. In each case the three new categories accounted for more than 6% of total revenue for the six months. One business introduced trading cards part way through the six months and did more than $12,000 in revenue.
The shopper traffic challenge.
A big challenge I see in the benchmark data is shopper traffic.
Our channel was built on being a destination for papers, magazines, cards, lotteries, stationery and, back in the day, tobacco. We’d open the front door and people would come in. Newsagencies were businesses that benefited from the habit based shopper.
Those days are gone, more so in the city than the country, but they are gone.
We need to work harder at attracting shoppers, by stocking a broader range of habit based products and by showing guiding people to purchase, by educating them, enticing them. We do this by being smarter and more engaged retailers, and by doing these things inside and outside of our shops.
Every newsagency, every retail business, needs a new shopper traffic strategy, because if were are not growing the shopper pool, the future of our businesses is at risk.
Stock what could attract new shoppers, display it so passers-by can see it, pitch on social media.
If all we do with something new is put it on the shelf, we fail that new traffic opportunity.
The run home to Christmas
July through December are critical for any retailer. Maximise the opportunity:
- Go out as early as possible with Christmas.
- Pursue attracting new shoppers.
- Stop doing what’s not making you money, which may include adjusting opening hours.
- Quit dead stock.
- Follow any green shoots in your business data, every business has these.
- Be frugal with your roster.
- Make your shop look the best it has been.
I say all this because even though our channel is producing good results, we have plenty of competitor retailers who are energised to win business, and you don’t want them winning it from you.
The next six months matter because they set you up is you may want to sell next year, they put more money in your pocket and they help you enjoy your business more.
I own and run four newsagencies. Over the years I have had three others. I own newsXpress, a newsagency marketing group focussed on helping newsagents attract new shoppers.
M | 0418 321 338
There are reports out of the UK that partwork publisher Eaglemoss has filed a notice of intent to appoint an administrator.
This from Gateworld:
A beloved company behind some of the best science fiction models on the market today is staring down major financial challenges, according to a report.
On July 12 Eaglemoss Limited reportedly filed a “Notice of Intention” with the courts in its home in the United Kingdom, declaring its plan to go into administration. This is according to Greg Connell, Managing Director of business publication Infolink Gazette, which monitors such filings at the U.K. High Court. Connell added that Eaglemoss’s revenue had peaked at £68 million, but in the most recent filed accounts had fallen to £31.6 million.
Though it is filed with the U.K. courts, a “Notice of Intention” is not a bankruptcy filing. Instead this is a path that permits companies to submit to an administrator to clean up its finances, pay its creditors, and avoid liquidation. Eaglemoss could emerge intact from this process, or if the reorganization proves unsuccessful the sale of its assets might lie in its future.
While this breaking story is thus far based on a single source, Bleeding Cool says that they have confirmed the report through their own (unnamed) sources.
Eaglemoss has not yet responded publicly to the reports, and its customer service has remained closed. While the company’s main Web sites are still online, the retail shop has been down for about a week now (in the middle of a sale). The site includes a message that it is undergoing maintenance. Eaglemoss’s Twitter accounts have also been silent in the days since the filing.
There is also plenty of discussion on social media about this, but nothing yet from the company itself.
The fact their their online shop is not taking orders is an indication something is up. I checked it out using a VPN to place me in the UK:
It’s a story to watch given the inconsistency of supply of Eaglemoss partworks into Australia, and considering their recent announcement that for at least one significant title they are ditching retail for a direct to consumer model.
Officeworks has several ranges of stationery that pitch well in-store, like these pencils.
I love the pitch, DRAW IT YOUR WAY. It connects the product with the creativity of the user of the pencils, which I think is smart.
While one of our jobs as retailers is to educate people to be purchasers, one of the jobs of product packaging is to inspire the purchase. I think the packaging for these pencils does a better job at that than many other pencil packages.
Starbucks in Sydney is pulling out all stops in the quest to find employees. I thought the rapid interviews pitch was interesting since it is a race right now to find people. Good people in the hunt for a retail role are being snapped up quickly.
Here’s the pitch outside the front of their Town Hall location.
On that level of the mall a couple of days ago I counted more than 20 signs in shop windows offering jobs. The Starbucks approach was more enticing and more professionally pitched.
Newsagents looking for staff may want to look at what Starbucks and others are doing since they have set a high bar in a competitive jobs marketplace.
I published this blog post here in July 2005. I think it’s relevant today as habit based shoppers remain important to our businesses.
While I talk about newspapers, card customers are, in the main, habit based shoppers, as are plenty of our other shoppers.
CONSUMER HABIT IS THE RISK NEWSAGENTS NEED TO ADDRESS TO BUILD NEWSPAPER AND OTHER SALES
The high number of newspapers and lottery products sold alone in newsagencies has been troubling me. Not only because of the risk to the newsagency retail channel in Australia if sales fall but also because of the lack of efficiency as a result of the traffic.
I have been looking for some research on why people buy newspapers but have had no luck so far. I’m guessing that the research has been undertaken by publishers and others for their own use and will not reach the public domain for that reason. My bet is that the purchase is as much or more about habit, like the morning coffee, than news content.
Looking at the way newspapers are promoted and the focus on competitions more so than news content suggests that it’s about habit. Competitions focus on maintaining and, hopefully, building habit. Content is not as important as the coupon or add on gift.
Lottery television commercials focus on habit. That and the fear of not having your ticket in when your numbers come up.
The risk for newsagencies is that they (we) are not part of the habit equation. Some of our products are but we are not. As consumers are able to satisfy their habit at more and more outlets it is reasonable to expect that the auto pilot will adjust and fewer will trek to the newsagency on auto pilot.
We need to promote ourselves as part of satisfying habit demand. The newsagency needs to provide the fix rather than the product. Promoting ourselves this way makes us more interesting to suppliers (current and prospective).
We can make the habit connect through competitions, as used by publishers and through emotional connect commercials, like independent grocers. My preference, however, would be that we find a way within our shops to collectively and universally across our channel make the habit connection and build on this to shore up current traffic and hopefully build more traffic moving forward.
Today, in 2022, I think there are other steps we can take to nurture habit. These include more diversity in what we sell and through a carefully celibately loyalty offer.
Our channel was built on offering what people wanted. They came to us for what we sold. We need to work harder and smarter at guiding people to what they ‘want’ and we need to do this around habit related opportunities.
My Tower Systems newsagency software company has produced another video promoting local newsagents and has been playing it via YouTube. So far, the sponsored video has more than 7,600 views – this is in 1 day.
The goal of the video is to remind people of value offered through local Aussie newsagents.
While some suppliers prefer you to keep their greeting cards on their seasonal stands, we have found it more successful to blend products so all cards for each caption are places together.
This means, for example, someone buying for Grandpa, will find all options together, rather than having to browse across two stands.
Here is what we have done for one of our shops:
While we do have stands from 2 companies, the cards themselves are blended. Some Henderson product is on the Hallmark stands and some Hallmark product is on the Henderson stands. Our experience doing this tells us it will result in better sales, for us and our suppliers … and this is what matters.
We are grateful to have had Father’s day out early. People are buying cards now, and gifts.
Our Father’s Day card pitch is on the lease line, to draw attention of shoppers walking past, to or from the car park.
This is an opportunity to find new traffic and lock in return visitors.
I know there are plenty of newsagents who were burnt by part series handling and are over them. That’s okay. I’m happy to pitch them, if only to leverage the launch traffic opportunity.
We have HEPA filters in our shops and last week we reminded customers why we wear masks.
I get that there are plenty of Aussies who don’t want to read or see anything to do with Covid. It’s fascinating seeing those views change when a loved-one gets it for the second or third time and struggles.
I was talking to a newsagent yesterday about their card situation. Their card sales are down 11.5% in 2022 so far compared to 2019 (pre Covid). They have seen me talk of double digit growth in newsagencies over the same period and wanted some advice.
They are half way through a contract with their card company. Because of the up-front money they received from the card company, it was called an advance on the projected rebate, they are locked in.
The problem for them is that the cards are not doing as well as projected in their newsagency. This means they are falling behind, which means the contract will likely need to be extended, unless they pay back the advance plus some costs associated with it.
They took the cash up front offer from the card company because they wanted extra working capital. It was pitched to them as an interest free loan and while it does not have a traditional interest component, the card performance has a cost that is, l in my opinion, higher than interest.
The cards this newsagency needs are card that perform well. That is not what they have, and they are locked in, which is distressing for them. Looking at their data at a pocket level, more than half the pockets are seriously under performing.
The offer of cash up front for a long term contract may not be in your best interests, no matter how much you want / need that cash.
Of course there are some on the card supplier side who will talk the opportunity up and pitch it as a partnership designed to help you. What they want, the only thing they want, is a rooftop locked in. It’s what they sell you that matters and while they do want you to sell cards, having you locked in is even more important. Shock, horror: their interests are likely not aligned with yours.
There are many factors that determine card performance in a newsagency. Range is one. Newsagent engagement is another. Out of store marketing is another. Data based decisions is another. These decisions and engagements are best done on the basis of business and not because of a financial handcuff.
Back in 1996 when I bought my first newsagency I did accept card company money I return for a card supply agreement. Today, no matter the circumstances, I’d not agree to such an arrangement as I cannot see any benefit for the business.
The newsagent I spoke with on the weekend does have some avenues they can explore if they can prove that the agreement provided by the card company is holding their business back. Making their case in a small business claims forum would rely on their card sales data and them being able to show that it is worse than newsagents in similar socio-economic situation with cards from another supplier. If they were able to make that case, the agreement could be re-cast by the member hearing such a case, to make them more equitable for the newsagent. However, I suspect that the card company may agree to a resolution through mediation as they would not want the matter publicly aired.
Place them front of store and mention them on social media, to make the most of the massive Coles campaign currently under way.
A newsagent contacted me earlier this week asking why it didn’t help with leases and why it restricted the card company members could buy from. I explained that newsXpress does help with lease negotiation and that there is no restriction on the card company newsXpress members buy from. It turned out they had been misinformed by someone. Hmm…
Anyway, that call prompted me to make this new video in which I talk about what is included for the $175 a month membership fee to be part of this vibrant and proactive community of newsagents.
In 3 different shops in inner Melbourne this week I heard stories of increased shoplifting.
The first is a premium food outlet. They have their meat now in a locked cabinet. They were having hundreds of dollars worth stolen and while their CCTV helped the police with an arrest, they felt they had to take that action.
Another was a charity shop. A staffer there said that it felt like theft had increased 5-fold.
The third was a premium card and gift shop on the high street. The owner is so upset that it’s making them re-think their plans for the business.
Okay, three stories does not make it a trend. But, in each case they said it was noticeably up this year compared to recent years.
I mention it today because several newsagents raised it with me last month, too … that they felt theft had increased in their shops.
I wonder if it is a trend, and if so, how retailers will react. Sure we can post CCTV photos and the like. But thinking about the premium food shop – putting meat – steaks, sausages, chicken behind a locked see-through door … do we consider that? It feels utterly impractical.
Of course, the first step is to accurately measure theft, through the regular processes around cards and magazines. Those processes indicate theft without extra work. And, for other product categories, a regular spot stock count check could be helpful.
Knowing if we have a problem is the start of finding a solution.
Many retailers do not engage with processes available to them to identify theft. I think it’s because if they don’t have the evidence, it’s not happening. But, of course, it is happening … in every shop. The only think in question is how much?
Okay, for context:
- This compares 2022 with 2019. Jan-June.
- We took over in December and did a part relay to refresh positioning.
- We particularly focussed on special interest, craft & hobbies, crosswords, children’s and music.
- We actively promote magazine range, especially fringe titles, on social media.
- We pitch magazines we want to feature next to newspapers.
- We have a loyalty offer, which is being appreciated.
- We also do some other things, but I don’t want to give too much away.
Yes, I hate that the GP is only 25% and that too many magazine publishers are holding cover prices back and therefore holding our income back. I also don’t like the old school treatment of us. But, with a product category doing close to $500K on a full year, it’s important to us, and, we are successfully leveraging magazine shoppers into other purchases.
Oh, I say the numbers are rare in that for many newsagents comparing the same 6 months, the results are between down 15% and up 5%.
Story (PR?) from News corp today.
Aussies will be able to play some of the world’s biggest lotteries from newsagents
As of Monday Aussies are able to try their luck in some of the world’s biggest lotteries.
Aussies will from Monday be able to play in the world’s biggest lotteries from more than 1400 newsagents across the country.
A new partnership between Australian-owned The Lottery Office and payment platform blueshyft means players can now deposit funds at the selected agencies, which they can then use to enter the draws.
The lotteries include the Italian Super Jackpot ($AUD 357 million), European Millions ($AUD 332 million) and USA Mega Lotto ($AUD 543 million).
Newsagents, in turn, receive commissions for deposits made and accounts created via the blueshyft platform.
The Lottery Office CEO Jaclyn Wood said the company expected the blueshyft deal would boost the confidence of lottery players keen to try their hand at playing major jackpots, but hesitant to deposit funds online.
“This will give The Lottery Office’s existing customers additional flexibility to make payments, but also open up a new channel for us to engage with new players,” she said.
Ms Wood said blueshyft had partnered with more than 20 companies including Ladbrokes, FedEx and News Corp to offer payments via an iOS terminal in newsagents since 2015.
It had processed more than 1.4 million transactions in the 2021/22 financial year, showing Australians were rapidly adopting the platform.
Ms Wood said the deal was also a win for newsagents, giving them a new and risk-free revenue stream.
“For any deposit made in-store, the newsagent will receive a percentage or dollar amount, whichever is greater,” she said.
“For every qualified new customer that comes to us via the newsagency, the newsagent receives an attractive referral payment.”
I have no interest in this or anything connected with Blueshyft in my newsagencies. Their type of agency business has no future in our channel in my view.
Maybe News Corp. could update their story to say at SOME newsagents.
Newsagents selling toys should try and get to the mid year Toy preview on this week in Sydney and next week in Melbourne. There will be plenty of new products on show. Here is the note the Toy Association sent out 2 weeks ago about the events.
The Previews are the first industry trade fairs in over 2 years so now is the time to get back to face-to-face; meet with new suppliers and catch up with existing business contacts.
Both the Sydney and Melbourne Previews have completely sold out of exhibitor space which means they are events not to be missed!
If you haven’t already, we encourage you to register online to save time later. Registration is FREE and takes just one minute to complete.
Full details of the Previews are below:
Sydney Mid-Year Preview
Wednesday 6 July: 9AM – 5PM
Thursday 7 July: 9AM – 3PM
Rydges Parramatta – 116-118 James Ruse Drive, Rosehill NSW 2142
To view a list of Sydney Preview exhibitors, click HERE.
Melbourne Mid-Year Preview
Tuesday 12 July: 9AM – 5PM
Wednesday 13 July: 9AM – 3PM
Amora Hotel Riverwalk – 649 Bridge Rd, Richmond VIC 3121
To view a list of Melbourne Preview exhibitors, click HERE.
If you are still selling Covid rapid tests be sure to list availability on the Find a RAT website as the number of outlets listed there have dropped off considerably. Thanks to that website we’ve had good sales in the last couple of months. Earlier today only my shops, and one other, were showing availability.
If a newsagency business contacts me with concerns about card performance, the first thing I look is out of store marketing of cards. Usually, there is none, which is surprising given the margin for cards and that social media promotion of the category is proven time and again to work.
Here’s a simple video I made for my own shops. It’s one piece ion a collection of greeting card marketing collateral made in the last week. the total time investment in making the video is less than 5 minutes.
It’s not a Hollywood blockbuster, but it does the job.