Latest / What the Flux / Barbeques Galore burns out | Breville brews $1.1 billion in revenue | Kraft Heinz cancels breakup plan

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Barbeques Galore burns out | Breville brews $1.1 billion in revenue | Kraft Heinz cancels breakup plan · What the Flux

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  Speaker 1: This is what the flux.
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  Speaker 2: I'm Brett and I'm Justin and it's a Hunday the
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  Speaker 2: sixteenth of February.
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  Speaker 1: The tickets to the FIFA World Cup in the US,
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  Speaker 1: Mexico and Canada have kicked off for the June July
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  Speaker 1: World Cup. And get this one, more than five hundred
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  Speaker 1: million ticket applications have been launched for a total of
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  Speaker 1: just six million tickets. And the scalping is kicked off,
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  Speaker 1: with some tickets already being resold for over three hundred
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  Speaker 1: thousand bucks. Hard to believe, but this is going to
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  Speaker 1: get ugly.
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  Speaker 2: You've really got to love your soccer Roos for three
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  Speaker 2: hundred grand b Man Fox am. With Valentine's Day just
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  Speaker 2: passing over the weekend, Ozzie splashed out over five hundred
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  Speaker 2: and fifty million dollars. We break it down in the
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  Speaker 2: Flex app, how much Ozzie spent on average and why
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  Speaker 2: everyone's spending this year. If you want to learn more
• 0:46
  Speaker 2: about how much people are spending on Valentine's Day, make
• 0:49
  Speaker 2: sure to download the Flex app and check it out.
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  Speaker 1: Three excellent stories today Juzzi Boy, Let's do it for
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  Speaker 1: our first barbecues Galore has entered receivership as liquidity issues
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  Speaker 1: leave Australia's begs the barbecue retailer fighting for survival.
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  Speaker 2: The one stop shop for barbecue be Man, don't know
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  Speaker 2: where I'm going to go anymore, so tell me what's
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  Speaker 2: going out here.
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  Speaker 1: So barbecuess Glaw was founded in Sydney in nineteen seventy
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  Speaker 1: seven and has grown into Australia's biggest barbecue and outdoor
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  Speaker 1: furniture retailer.
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  Speaker 2: We're talking sixty eight company own stores and twenty seven
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  Speaker 2: franchises around Australia.
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  Speaker 1: You want a four burner beast that could cook for
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  Speaker 1: the entire cricket club, they have got you covered.
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  Speaker 2: You want to smoke it? That takes twelve hours and
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  Speaker 2: three YouTube tutorials, Samassa step right this way to Barbecues Glaw.
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  Speaker 1: Mm hm and Josey Boy Barbecues. Glaw has had a
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  Speaker 1: bit of a checkered history.
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  Speaker 2: Yeah. Listed on the ACEX, then be listed, then listen
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  Speaker 2: again on the NASDAK before the us ARM went bankrupt
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  Speaker 2: during the GFC. It was then bought by Ironbridge Private Equity,
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  Speaker 2: who then sold it to another private equity, Giant Quadrant,
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  Speaker 2: who basically gave the keys to its Lenda Gordon Brothers
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  Speaker 2: last year for almost nothing.
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  Speaker 1: And now Barbecues Glaw has entered receivership after struggling with
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  Speaker 1: ongoing liquidity challenges for b Man.
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  Speaker 2: The business is now up for restructure or sales after
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  Speaker 2: years and years of attempts to find new buyers.
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  Speaker 1: So there's still a little chance of a sizzle in
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  Speaker 1: Barbecue Galaw's grill.
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  Speaker 2: So what is the key learning here?
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  Speaker 1: When a business keeps changing hands, it can quietly ruin
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  Speaker 1: its long term strategy.
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  Speaker 2: Think about private equity firms and lenders and turnaround specialists.
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  Speaker 2: They all have different time horizons and different goals when
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  Speaker 2: they acquire a business.
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  Speaker 1: YEP. One owner might focus on expansion, the.
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  Speaker 2: Next owner might focus on cost cutting.
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  Speaker 1: The next might simply want to sell out.
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  Speaker 2: And the constant reset can make it hard for the
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  Speaker 2: company to invest in brand and culture and customer loyalty
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  Speaker 2: over the long run.
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  Speaker 1: And while Barbecue's Glare was the number one player in
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  Speaker 1: the premium barbecue market with around thirty eight percent market share,
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  Speaker 1: it wasn't enough to turn a profit.
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  Speaker 2: Now it's annual loss it was over sixteen million dollars
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  Speaker 2: before tax in twenty twenty four.
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  Speaker 1: And four point seven million dollar loss in twenty twenty three.
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  Speaker 2: But but man, the current owners are hoping there might still
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  Speaker 2: be a little bit more sizzle in this barbecue. For
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  Speaker 2: our second story, Revel has seen the premium coffee boon
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  Speaker 2: grow its revenue pass at one point one billion dollars,
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  Speaker 2: even after the tariffs keep its profits flat. Those pesky
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  Speaker 2: tariffs will not stop that, They just won't. So what's
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  Speaker 2: going on here?
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  Speaker 1: So?
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  Speaker 2: Breve was the ASX listed appliance makeup that was actually
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  Speaker 2: found in Australia back in nineteen thirty two, but it
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  Speaker 2: really took off when it became famous in the nineteen
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  Speaker 2: seventies for inventing the sandwich toaster. But now it's also
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  Speaker 2: behind high end espresso machines and toasters and a whole
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  Speaker 2: range of kitchen gear too, and joysy.
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  Speaker 1: Boy, Brevel takes its appliances very seriously.
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  Speaker 2: Mind you.
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  Speaker 1: It has a toaster for over six hundred bucks that
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  Speaker 1: uses a sensor to judge your toasts crispiness.
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  Speaker 2: Wow. And clearly, bman, people are valuing this stuff. Because
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  Speaker 2: Brevell just posted a record ten percent jump in revenue
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  Speaker 2: to over one point one billion dollars for the first
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  Speaker 2: half of this financial year.
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  Speaker 1: What was the winning appliance here?
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  Speaker 2: Fancy coffee machines for the homebabman double digit growth. Baby Yeah.
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  Speaker 1: Brevell earned over ninety eight million bucks in net profit
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  Speaker 1: for the half, which was about in line with last
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  Speaker 1: year's result.
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  Speaker 2: I got a little bit though, I'm a little bit
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  Speaker 2: surprised there was no jump in their net profit. So
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  Speaker 2: whino jump.
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  Speaker 1: Well, Brevll got really caught up in Trumpies tariffs for
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  Speaker 1: products that are made in China.
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  Speaker 2: So for now they've paused on its aggressive growth strategy
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  Speaker 2: to focus on those pesky peski tariffs.
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  Speaker 1: So what's the key learning here?
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  Speaker 2: The best growth strategy is often knowing what not to do.
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  Speaker 1: Over the past few years, Brevell has been expanding into
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  Speaker 1: newer markets like Mexico and China, South Korea and the
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  Speaker 1: Middle East, and.
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  Speaker 2: The temptation would be to continue aggressively pushing into new markets.
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  Speaker 1: But Brevell decided to pause on this international expansion. But
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  Speaker 1: not because it wants to.
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  Speaker 2: Nope, because it's focusing on another major strategy.
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  Speaker 1: First operation shift manufacturing away from China.
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  Speaker 2: You see me, man, Brevel cop more than forty million
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  Speaker 2: dollars in tariffs on the US sales because their products
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  Speaker 2: were made in China.
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  Speaker 1: But by December eighty percent of its US gross profit
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  Speaker 1: was being manufactured outside China.
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  Speaker 2: That is a huge shift in a very short period.
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  Speaker 1: So clearly Brevell is choosing to protect profitability first and
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  Speaker 1: de risk its supply chain before expanding further.
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  Speaker 2: And they're hoping that the next phase of expansion will
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  Speaker 2: be from a stronger base.
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  Speaker 1: For our third and final story, Kraft Hinds has scrapped
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  Speaker 1: its plan to break up and is betting six hundred
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  Speaker 1: million bucks that are turn around tastes better than a split.
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  Speaker 2: Nothing like an on again, off again relationship for companies.
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  Speaker 2: B Man started to sound like a bit of a
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  Speaker 2: Hollywood drama, So tell me more.
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  Speaker 1: All right. So, Kraft Times is a global food company
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  Speaker 1: that was created actually in twenty fifteen through a merger
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  Speaker 1: between Craft Foods and Heinz.
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  Speaker 2: Craft Foods obviously the maker of Kraft Macaroni Cheese, Philadelphia
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  Speaker 2: Cream as well as Orio.
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  Speaker 1: Well Hines is obviously the maker of the famous ketchup
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  Speaker 1: baked beans as well as Golden Circle here in Australia.
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  Speaker 2: But be Man, after a decade as a committed family unit,
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  Speaker 2: Craft Times announced plans last year to split the company
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  Speaker 2: into two. The idea was to separate the fast growing
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  Speaker 2: condiment business Hello Heinz Ketchup Yes, from the struggling grocery
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  Speaker 2: brands Hello Craft Singles.
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  Speaker 1: Yes. But since announcing the split, things have actually gotten worse.
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  Speaker 2: Yeah, the grocery sales have deteriorated even further. And now
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  Speaker 2: the new CEO has hit pause on the d merger.
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  Speaker 1: Instead of carving the company up, Craft Times will now
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  Speaker 1: invest six hundred million bucks into marketing and sales and
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  Speaker 1: R and D to try bring back growth to the
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  Speaker 1: Craft Singles and co.
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  Speaker 2: So rather than cutting out the companies, it's planning to
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  Speaker 2: turn this baby around.
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  Speaker 1: So what's the key learning here?
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  Speaker 2: A turnaround strategy is what companies do when performance is
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  Speaker 2: deteriorated and growth has stalled, and.
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  Speaker 1: Jes BOYD typically involves one or more of three levers.
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  Speaker 2: The first is cutting costs, the.
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  Speaker 1: Second is about repositioning the brand, and the third is
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  Speaker 1: investing in growth. Now, in this case, the grocery sales
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  Speaker 1: are so weak that splitting the companies up would result
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  Speaker 1: in one successful and one failed brand.
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  Speaker 2: Yeah, and then, man, we know that breakups work best
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  Speaker 2: when both companies are healthy. So the new CEO of
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  Speaker 2: Craft Times is leaning into investment now so that when
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  Speaker 2: they eventually split out, they're not creating one thriving company
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  Speaker 2: and one problem child. Mm hm fux AMM. We've broken
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  Speaker 2: down the numbers of Valentine's Day and and in the
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  Speaker 2: latest article in the Flux app, we break down the
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  Speaker 2: average span of men and women on Valentine's Day. So
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  Speaker 2: if you want to see how you stack up against
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  Speaker 2: every other Australian, make sure to check out the Flux App.
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  Speaker 1: Thanks for listening and we'll see you on Wednesday.