It’s time for the Yellow Pages to walk the catwalk

We are now at the height of the structural decline of this industry.

A few weeks ago, Sensis boss John Akhurst announced his departure after 15 years. In 2006, the Telstra veteran proposed to the board of directors to sell Sensis. The company had $ 1.2 billion in EBITDA at the time (now $ 260 million and down).

If they had derived that in a float of market share – institutions would have done it like Myer – and had received the multiple of 14 times the EBITDA that Telecom New Zealand had for the sale of its directory business, it could have brought in over $ 17 billion.

They would jump to a third of that now, having sorely underestimated Google. Although at the time, understandably, the board was loath to part with a billion dollar cash generator.

Two years before Akhurst’s proposal, in 2004, Telstra paid John MacBain a handsome $ 636 million for Trading Post. Now, the words comptoir commercial carry the ring of a bygone era.

Speaking of opportunities, it was wonderful to see David Jones launch an internet strategy this week. Unlike Telstra, department stores don’t have the luxury of other divisions, like a booming mobile phone company, to make up for their declining sales.

Announcing their “Omni Channel Retailer (OCR) model” – which could have been more accurately called the BLN (Better Late Than Never) model, DJs are finally tackling the grim reality that old physical distribution strategies don’t do it all. just don’t ‘don’t cut it anymore.

In the United States, department stores average 7-10% of their sales online. It can cannibalize your own offering, but just like newspapers with their free online news, they have little choice.

The press has been much more proactive than retailers and now enjoys a larger audience than ever before, although it has yet to monetize it.

At least they have retained and even expanded their rusty clientele. In 1964, Fletcher Jones was selling a suit to every guy in town. Fletcher Jones went bankrupt a few months ago. Its rusty clientele had died out.

David Jones and Myer face the specter of steadily declining sales and an aging customer base as they reduce the costs of their Internet offerings. For Myer, things could be more difficult. Management may soon have to consider keeping the dividend.

The crafty private equity mob that started Myer ripped off his flagship properties and replaced money with debt.

DJs has a stamp – he owns his main stores – and Myer’s shareholders have better hope that the privateers don’t overcharge their store rental costs in the back (much like the credit card deal of the DJ).

And sometimes, department stores could do with more staff rather than less. Otherwise, buyers might as well go online.

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Calvin W. Soper

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