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Briscoes store - Source: NZPA / Rob Tucker -
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Retailer Briscoe Group says its massive rise in profit is due to structural changes and clever thinking in a tough retail market.
On Tuesday the group, which includes Briscoes, Rebel Sport and Living & Giving, reported a 81% leap in annual profit to $21 million thanks to growing sales and said it was cautiously optimistic about the year ahead.
Managing director Rod Duke says the company invested about $3 million in a new back office inventory management system.
"That really gave our people much more detailed insight into what inventory were being held, whether they were good sellers or poor sellers, and precisely where those inventories were held."
Duke also introduced a "profit share programme", which changed store managers into profit centre managers.
"That means that many of them are managing up to three or four stores within a geographic region and managing up to $30 or $40 million worth of revenue. (They're) managing everything - managing the costs, managing labour, managing their inventories and they're now paid a proportion of incremental profit they generate."
The group is cautiously optimistic about the year ahead but Duke says the retail industry is still in difficult times.
"I think it's still tough out there. We look at our peer group and compare the progress that we've made to a lot of our other competitors - also people who are not competitors, but still trade in the retail business. And it does appear to me that it's still a bit two speed," he says.
