By Patrick Avenell
Retravision’s head office in Perth will still handle a number of important company functions after the group moves to decentralised billing, according to CEOs Paul Holt (WA) and Phil Scarf (Northern).
Due to restrictions placed on the co-operative buying model by insurance companies, Retravision will soon move to individual store accounts, which will considerably reduce the risk to underwriters.
Holt and Scarf said that under that this system, which appears similar to BSR’s model for the Betta-branded stores, the head office will still play an important role. The pair outlined five key functions of the group under the new business model:
- Supplier interface, trading terms negotiations and price book maintenance
- Buying opportunities and core range maintenance
- Group-wide advertising for all stores
- IT systems and support for all stores
- Brand maintenance and development support
Holt and Scarf also listed four benefits this system would have for members:
- Opportunity to continue to enjoy the Retravision brand heritage.
- This will be a very low cost, low risk model for suppliers and stores. Stores will no longer be exposed to the trading performance of other stores or, indeed, other regional groups.
- Stores will be asked to follow a core range of suppliers but will also be given greater flexibility to trade with suppliers of their choice and on their terms.
- This will be a very low cost option for stores to adopt and one where fees and charges will be limited to cover the services earlier specified, such as IT services and catalogue distribution.
Holt and Scarf will use this move to circumvent the suspension of supply from several major retailers. With individual members now actively encouraged to open store accounts, these brands can return to shelves with reduced risk.
“The Retravision group currently remains on stop with a small list of suppliers,” said Holt and Scarf in a joint statement. “We will request these suppliers to immediately move to open direct accounts with stores as quickly as possible.”
“The vast majority of suppliers continue to support us with central accounting, albeit on reduced credit limits. We will work with these remaining suppliers in order to agree an orderly transition from central accounting to direct store accounting.”
Holt and Scarf said they have engaged a senior business partner from PricewaterhouseCoopers to work with them on this structural change.