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Bricks and mortar [Feb. 19th, 2011|11:27 pm]
Daveosaurus
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[Current Location |Invercargill]
[mood |grumpygrumpy]

So, the big news of the week is that Whitcoulls has gone into administration. As far as I can tell, this is the first stage of collapse of a company. If administration doesn't get the company's books sorted out, it goes into receivership; and unless it can be rebuilt into a going concern at that point, it goes into liquidation, in which whatever the liquidators can find among its assets is flogged off to the highest bidder and the proceeds, if any, go to the banks; if there is anything left after the banks have been paid off, it goes to the people the company owes money to.

This was rather annoying as I still had $27 on the Whitcoulls gift card I got for Christmas. (I'd been using it to pay for the Stamp Monthly each month. There isn't really much else to buy at Whitcoulls these days - which, I'd suspect, is the main reason behind the company's demise).

Anyway a bit of background information. Whitcoulls was formed some time around 1970 when two long-established printers, stationers, booksellers, etc., Whitcombe and Tombs and Coulls Somerville Wilkie, were merged into one large business. A few years ago it was bought out by a bunch of investors who were only in the business for what they could get out of it, and that is probably when the company's problems started.

Over the last couple of days a lot of people have been blaming it on how easy it is to buy stuff on the Internet. This is only part of the story, and a minor part, at that. When a book costs about US $12 in America, but NZ $60 here, there's more than just freight and exchange rates involved. (The book in question I ended up ordering from Amazon, and even including freight, exchange rates and foreign currency surcharges on the credit card it came in at a shade under NZ $30).

And it's not just because of purchases from overseas not being charged GST unless it's worth collecting (i.e. that there's more than about $50 tax to pay. At 15%, that means that individual purchases from overseas under about NZ $300 don't get pinged). There has been a bit of griping from businesses locally about this situation; demanding that all purchases from overseas be charged GST. The cost of collecting the tax would far outweigh the revenue received; this is basically just a bunch of local businesses wanting a sneaky little subsidy. It's not even as if the businesses wanting the subsidy are locally owned - the ownership of Whitcoulls, for example, had been in Australia since it was taken over).

No, there are two main reasons for Whitcoulls' failure:

* Recently introduced stock management practices. Over at Public Address there have been a few horror stories about trying to deal with Whitcoulls, both from a suppliers' and from a customer's point of view. One supplier had published a book, that local Whitcoulls branches had let them know that there was a demand for, but the local branch wasn't allowed to actually buy the books direct from the publisher. Everything had to go through a warehouse in Auckland. The warehouse in Auckland took something like a month to distribute the books, by which time much of the demand had been met by local independent booksellers. And one customer mentioned that they'd tried to order a book; the computer told the person at the counter that there was a copy on the shelf. Nobody could find said copy, but until the non-existent book had been sold, the systems would not let the shop order another one. Personally, the last time I tried to order a book from Whitcoulls it took several weeks to arrive - and this wasn't anything particularly obscure, either - and even their DVD shelves have been severely pruned in order to make way for a large number of Blue-Ray discs, which aren't exactly flying off the shelves (I don't know anyone locally with a Blue-Ray player - or at least anyone who has told me they have one. It's not enough of a step up from DVD that it's really worth the while).

* Failure to do anything much with the Internet. Yes, Whitcoulls have a web site, but it's mainly the same information as on the flyers you get with the junk mail. Trying to actually buy anything from it is a waste of time; the time I tried looking for anything on their web site, the selection was absolutely pitiful. Compared to somewhere like Fishpond - a locally operated site that's fairly much the local Amazon - the Whitcoulls site was nothing but a waste of time.

It also doesn't help that throughout this saga, communication has been absolutely woeful. The management didn't bother letting the actual branches know that they'd been put into administration until after the close of business on Thursday; and it wasn't until mid Friday that the branches got any sort of word on what was happening. It was a similar story with gift cards. As the business has not yet been placed into receivership, the holders of gift cards are still entitled to expect that they be honoured. Management decided that what would happen is that gift cards are still redeemable for their full value, but only for up to half the cost of any particular purchase. So, for example, to use up the remaining $27 on the gift card, I needed to buy something worth at least $54 and pay for the balance myself. This, however, was not communicated at all well by the company. A lot of people probably still think that the gift cards will only be redeemed for half their value, or that an extra purchase of twice the value of the gift card is required.

So I rather quickly went into Whitcoulls today to use the card while they were still honouring it. The problem then was the same problem I had been having for some months in Whitcoulls: that there was nothing to buy. Even my regular purchase-if-there-is-nothing-else standby - classic series Doctor Who - was conspicuous by its absence. (Even a year ago, there was about half a shelf of classic series DVDs; today, there was nothing).

However, I had recently discovered that I needed to buy a new flash drive, my existing ones all being either lost (one of the 2 GB drives), out on loan (the other 2 GB drive), otherwise occupied (the 4 GB drive with a supposedly bootable Ubuntu on it) or having recently failed (the 64 MB drive). Whitcoulls was no help: not a single flash drive anywhere on site. (These are fairly much stationery items now, not Expensive Computer Hardware; much in the same category as the CD blanks sitting forlornly between the school stationery and the office stationery as Whitcoulls' only contribution to modern office supplies). In the end I got one from Warehouse Stationery (a 4 GB drive for $13 - the cheapest in store - and which is probably going to do the job perfectly well even though, for some reason, it's been designed to operate a bit like a Stanley knife).

In the end, I bought a box of biros (somewhere in my vicinity there is a Black Hole which eats only biros. I buy a box every few months and they all disappear eventually; I hardly ever actually use one up so they must go somewhere) and my father's birthday present a few months early. That just covered the amount I'd need to pay to use up the card.

But seriously... if Paper Plus are doing fine (despite being even less of a bookshop than Whitcoulls), and if Warehouse Stationery is doing fine (despite being more office supplies than anything really interesting), then surely, if Whitcoulls are having problems, then the problem might be a bit closer to home than The Internets.
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Comments:
[User Picture]From: d_h
2011-02-19 11:14 am (UTC)
We spent 2 hours actually trying to find stuff to spend the daughters gift cards on.

Do not underestimate the contribution that being brought by a private equity company made to the demise of whitcoulls
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