Millers expands Aussie discount presence

By Phil Boeyen, ShareChat Business News Editor

Tuesday 8th May 2001

Competition for the discount retail dollar in Australia continues to heat up with sharemarket favourite Millers expanding its low-price empire in states where The Warehouse (NZSE: WHS) operates.

Millers is primarily known for its fashion outlets in Australia but also owns more than 100 Go-Lo stores in NSW, Victoria, ACT and South Australia and more than 70 Crazy Clark's stores in Queensland.

The concept for the stores is similar to The Warehouse, right down to the promotional material in some cases with the Crazy Clark's chain using the tag "Where everyone gets a bargain".

Millers has now announced it is adding the 125-store Crazy Prices chain to its line-up, buying the stores from Woolworths for A$40 million.

The chain has outlets in NSW, Victoria, South Australia and Queensland.

Last year Millers bought more than 200 Katies fashion stores from Coles Myer in deal worth $A20 million.

The discount shopping market in Australia is a multi-billion dollar business but The Warehouse's expectant entry there has failed to deliver on the promise.

Last year The Warehouse paid A$105 million to acquire around 80 Clint's Crazy Bargains stores and 33 Silly Solly's, two Australian discount variety chains operating in four Australian States.

The deal includes an extra potential earn-out of up to A$24 million if the Australian retail operation meets earnings targets by 2003.

However at the end of April The Warehouse reported a profit warning based on lower than expected sales at Clint's.

It said the chain, which had been expected to boost the company's earnings before interest and tax by A$8 million, would not be making a positive Ebit contribution for the current financial year.

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