Now, Brett, absolute truth, we didn’t sign a contract. We didn’t even think about the leases associated with it and we didn’t stocktake, nothing. I loaded up the truck and moved to Sydney. We swapped the stores, all done, not a problem.The first thing I knew of a problem was when AMP rang me up at Macquarie, which was one of the stores we took and said, ‘We’ve noticed that cheques are coming from somewhere else. You can’t do that.’ They’d twigged to the fact that it was a new owner.
Centre management called me in to discuss the fact that I hadn’t signed the lease – this was six months later. I was happy to sign the lease but they said, ‘We don’t know who you are. We don’t trust you. You’ve got no credit history.’ All that stuff. So I told him about Sanity and blah, blah, blah. He lectured me about the length of the lease and said, ‘Do you know that it’s not just seventy grand a year, it’s five years.’ I smiled at him and thought, ‘Of course, I know that, you idiot.’ But I didn’t say that, of course. He was trying to stomp his ground. I listened, of course, but to cut a long story short, all that finished and we left Victoria alone.We then started in South Australia then Queensland.
BK: you’ve done the whole country at this point but you haven’t touched Victoria. What happened with Victoria? How many stores did you have before you went back to Bryan in Victoria?
BB: We would have had about fifty or sixty stores when Bryan rang me up, we would speak from time to time. We even continued to buy some things together, so there was a healthy relationship. He said, ‘Brett, I don’t know what you’re doing or how you’re doing it, but everyone’s talking about you. You’re clearly successful.You’re doing something right. I’ve got six stores. Would you like to buy them?’And I said, ‘Sure.’
So we worked out a deal on those six stores. He had about twenty or twenty-four stores at the time, I can’t remember exactly. It doesn’t matter. So I said, ‘Bryan, there’s only one problem. I promised you I’d never come back, but I’m going to come back and I don’t want to have just six stores.’ Then he said, ‘I’ll cut you another deal. You can go to any centre that we’re not in.’
I thought I would get up to a dozen stores or something, that was OK. So we did that, we started to open a few more stores in Victoria. A year later, he said, ‘I’ve got another six for you.’ So I bought them. And then, a year later, he’s got another.And so over time, essentially, we bought all the stores from Bryan. I can tell you again, we never did a contract.
BK: But you did sign the leases this time?
BB: We did learn a few things. By then, I had a bit of a structure so we wrote to people. It didn’t matter then, because by that time I had the credibility. The landlords were all in favour of us taking over. There weren’t any issues. So, that was essentially the Bras N Things story. Tracking back from that, somewhere in-between all that, was Jeff, who took control of the music stores–
BK: Eight at that time?
BB: About eight, but they got into trouble. I remember this number because it was a great number. When I sold that business it was valued at a million dollars.So, I got essentially $600 000 because I had 60% at that time. Then, three years later, we bought it back from the bank.
‘I learned that if you’re not involved in the business, it’s not good. In specialty retail, you’ve got to have great standards and discipline, great controls.’
BK: How much did you pay?
BB: I shouldn’t say, but it wasn’t anywhere near what I got for it, because it was essentially a bit broken. That was another very important lesson for me. There were a number of lessons.
BK: What were the lessons out of that? Don’t have partners?
BB: That was a really important lesson. No partners makes life easier, in my view.I’ve got to qualify that because I’ve got partners right now, but each partner has to bring something different. In any event, even with partners, there can only be one boss. So, that’s a hard and fast rule for me. One captain of one ship.
I learned that if you’re not involved in the business, it’s not good. In specialty retail, you’ve got to have great standards and discipline, great controls. Every store has to behave in the same way. You can’t call yourself a group if every store is ranging something differently or serving customers in a different way or has a different process.
BK: What the brand promise is, ultimately.
BB: Brand promise is gone. What people know from one store to the other is gone. Systems and processes, the back end of the engine in terms of data integrity, payment of bills, processing–
BK: And then, dropping your costs through scale, you get none of the benefit.
BB: None of that benefit. In specialist retail, you have to ensure the brand promise because there are so many people, far and wide. We’ve got stores from as far away as Siberia (Russia) all the way down to Burnie in Tasmania. It’s about empowerment through standards and disciplines and a culture. So, all of that has to be the same.
That means, if we’re going to set up a new event, and it’s going to happen at 3 o’clock on Tuesday, it has to happen in all stores, at the same time, delivering the same message. Otherwise, you can’t control hundreds or thousands of stores.Retailing is a fabulous business when it all works. It’s disaster when it doesn’t.
You learn most lessons from mistakes. I was fortunate to watch this mistake happening so I didn’t have to pay for the lesson. I had instinctively already figured out that systems and processes are about being very disciplined but letting people operate within that discipline in their own way so they can contribute and make a difference. That was a very important lesson. The other one was not to take on too much debt, because that was also part of the failing.
BK: So taking on debt to buy you out?
BB: Yes.
BK: Roughly how many Bras N Things stores did you have when you got the eight back?
BB: I probably only had about thirty or forty at that stage.
BK: So now you’ve got two businesses to run?
BB: Two businesses and I had moved to Sydney.
BK: How did you make that happen? Was it through your mate, Daniel?
BB: Yes. He was still working in music. It was called Jets.
BK: And he became the guy who ran the eight stores?
BB: Exactly. I grabbed hold of Daniel, who I had always seen as a talent and said,‘Why is this great business that I left now broke?’ And he knew exactly the reason why. He said, ‘Well, all the things that you had, they changed.’ And I said, ‘So, how much money have you got?’ He said, ‘$23 000.’ I said, ‘You whack the $23 000 in.We’ll go buy this.’ I can’t remember what percentage that equated to, but when we floated, he had about 3%. I think he might have had 18% before that?
BK: About 18% when it started?
BB: When we started, that $23 000.
BK: And then, what was the float value, roughly?
BB: A hundred million.