Exclusive: Yoobee back in black and planning for expansion
Two years after Renaissance sold its ailing Yoobee retail business, the business is back in black – and looking to expand.
Daven Naidu, Yoobee chief executive, says all bar one Yoobee store made a profit last year, making the company as a whole, profitable. The company has five stores in New Zealand and one in Fiji.
Naidu says revenue was up more than 10% across the board for last financial year – ending in March – while costs have been reduced a further 10% over the same period.
While Naidu won’t reveal specific numbers, he says ‘We have basically turned the business around.
“Month to month we are growing the business over the previous year.”
It’s an achievement Naidu is understandably proud of.
“It was a struggling business for about seven years before our time, and we’re happy we’ve managed to work hard and turn it around.
“It shows it is possible to make it work with the right focus and commitment in the business. Retail is still pretty tough, but if you put the effort in and provide the customer service you can do reasonably well.”
Naidu, whose Logical Systems Limited acquired the assets, fixtures and fittings of the retail business in March 2014, says the first year of business was spent putting the right infrastructure in place, cutting costs and rebuilding the business.
“We are pretty much lean at the moment and have the right model and the right staff, which makes a lot of difference.”
Having that ‘right’ model in place, and money in the bank, means the company is now confident it can replicate the model in any new stores.
“Previously Yoobee had no idea about size, they just put huge stores in the malls and they never worked out, but we’ve got a formula now that I think will work with other stores.”
Naidu says any new stores will be based on population and market share.
“There are opportunities. Obviously Auckland having only one store, I think there’s opportunity for a few more, which we are exploring at the moment.”
He says any expansion is likely to begin towards the end of this year.
The company has recently bought its own premises in Hamilton and relocated the store into the central city.
Yoobee is also eyeing up Apple premium status for its stores, with the Hamilton store already gaining the coveted status.
“The challenge now is to get all the other stores up to that level, but we are pretty close there,” Naidu says.
He says Auckland’s Newmarket store and the Christchurch store are both close to getting the premium status.
“These things make a difference,” he adds.
New vendors, whose offerings complement the current Yoobee offerings, will also be coming on board over the coming months.
Naidu says the gap in the market created by the demise of Dick Smith has created new opportunities for Yoobee – though he says the company will remain Apple focused.
“We’re looking at how we can attract those people to us. We want to see more of them coming to Yoobee.”
Naidu says Apple still presents growth opportunities for Yoobee particularly around services, though there remain margin issues on product itself.
“We do quite a big percentage of Apple servicing nationwide already. Our business model revolves around the Apple brand and we will keep the focus on that and work around what complements the Apple brand.”