Bunnings NZ: next stop two billion?

By Steve Bohling April 18, 2018 Hard Talking - Industry interviews

Is there a shared outlook for the coming year? Next we move on to Bunnings NZ as we continue to canvas the major merchants and retailers.

Toby Lawrance: What is the next level? A two billion dollar top line?

 

Bunnings’ New Zealand arm surpassed the billion dollar mark for the first time in the year ended June 2016.

It improved on that figure last year and now, armed with a new GM and a new Auckland DC, Bunnings is serving notice that it aims to double that top line benchmark.

That’s according to NZ General Manager, Toby Lawrance, who’s had his feet under the desk since August.

Toby spent four years as Bunnings’ State Operations Manager for South Australia, Northern Territory and Tasmania and three as Area Manager for Victoria, Tasmania and South Australia before that.

So, pretty much eight years with Bunnings, all of which will have prepared him well for New Zealand’s smaller scale but just as marked demographic and geographic differences.

And, as the new GM, Toby Lawrance’s operations background may hold some clues around Bunnings’ next several years in New Zealand.

Former NZ GM, Jacqui Coombes, was in the hot seat for six years (2011-2017), during which time Wesfarmer’s Kiwi home improvement arm made giant strides.

Jacqui is still involved in the NZ business and will provide “support and guidance” to Toby and the team, but is also taking on a broader group role, including responsibility for HR in Australia, New Zealand and the UK and Ireland.

 

OF VIEWS AND VALUES

In terms of the “why” around the changeover of GM, when we meet at the new Bunnings Solutions Studio in Penrose, Auckland, Jacqui talks about the importance of maintaining a fresh outlook.

“In a role like this you’ve got to be innovative and have that fresh thinking so you’re able to review things all the time and not be complacent.

“I think that’s part of our success over the last few years, not being complacent and always being focused on making sure we know what’s going on in the market as well as being really inner-focused.”

In this respect, is there a different between their management approaches?

Jacqui says: “I think we are quite similar in the way that we think and I think our personal values are quite similar. And that’s really important for us, from a cultural perspective, that we look at the team in the same way and that the work that we do in the community we’re totally aligned with.”

Toby Lawrance: “Yes I think the differences are probably more in how we execute but the ‘why’ is the same, fundamentally.”

The new GM is full of respect for Jacqui Coombes’ achievements during her tenure, citing an “amazing legacy of people”, as well as turning round “a business that wasn’t working” and laying the groundwork for the New Zealand operation to step up to another level.

What is that next level? A two billion dollar top line? That’s a number that was bandied about during our conversation.

And how will Bunnings NZ get there? The outlook is neither one size fits all nor production line style, either from a property or a human perspective.

Reading between the lines, we can however certainly expect more operational efficiencies like the new DC. E-commerce will come too, alongside improved systems.

And, as risk increases and real estate opportunities become harder to find, we can expect more organic growth than growth driven by expanding the store network but also more openings of different scales, as suits the local market.

 


It’s all about the team

In 2015, four years into the GM role, asked about her key achievements to date, Jacqui Coombes (right) replied “seeing the team build”.

Even surpassing the billion dollar mark, the achievement she is most proud of, is “for the whole team”.

“The billion dollars became a bit of a war cry, because we had our issues with the union and different things and I guess just the team just pulled together.

“We were so close to not making the billion in that financial year. We were just a week out and the day that we hit, it was just a massive celebration and the team just went off and the excitement was just phenomenal!

“And I think that really armed everybody to say ‘you know, we can do this – we’re on our way to two billion and we can do it’. I’ve got to be most proud of that.”

 


Bunnings NZ – Snapshot

Gross revenue last full year: $1.1 billion (+11% in year ended 30 June 2017)

Gross Profit last full year: $350 million (+10%)

Trade % of top line: 50%

Bunnings Warehouse stores: 27

Bunnings small format stores: 20

Bunnings Trade Centres: 8

 

 

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