Bye bye Truscott's!

Anything goes here.. :) Now with Beer Garden for our smoking patrons.
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The Scooter Guy
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Bye bye Truscott's!

#1 Post by The Scooter Guy » Thu Dec 17, 2009 1:41 pm

Why Truscott's Really Failed

Truscott's, who was placed into administration earlier this month, is a classic example of marketplace pressure. A lack of capital coupled with poor management by people who did not have a good understanding of the market they competed in, along with aggressive marketing by their competitors had a devastating impact. Truscott's failed because of poor marketing and sheer competition, with the biggest loser set to be the Insurance companies who provided cred insurance to most of the suppliers who were aware of the companies problems. One Insurance broker said "I suspect up to 90% of the stock would have been insured. some vendors we know, were supplying only on a sale with orders being taken by Truscott's and the product delivered within 48 hours". Small operations like Truscott's often struggle to compete up against the might of JB Hi Fi and Harvey Norman who every month throws millions into marketing their brands. They have the buying power and the vendor relationships as well as brand names that consumers trust. They also had to compete locally up against the likes of Radio Rentals and Electrical Discounts as well as the likes of JB Hi Fi who are aggressively moving into regional markets. The retailer, who in a desperate attempt to achieve better buying leverage last year became a Retravision member, however this failed to deliver them customers who deserted their stores in droves for other retailers who were perceived as offering better deals.One only has to look at the performance of other NARTA members to realise that the market that Truscott's competed in is not under too much pressure. Some, like JB Hi Fi, David Jones and Winnings, are booming during the economic downturn with consumer electronics and IT contributing significantly to their profits. While former and current management blabber on about a recession and an economic downturn, their competitors were making a bucket load of profits because Truscott's was driving customers to them due to a lack of brand power and poor marketing. They failed to recognise that a good brand name like The Good Guys, Harvey Norman, Radio Rentals or JB Hi Fi is a magnet that not only draws people in but creates an element of trust.
Now receivers Ernst & Young is tipped to liquidate the stores if a buyer cannot be found.

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