It’s been a pretty exciting year for retail investment firm Alceon Group. In the last 12 months, the business has purchased Ginger & Smart, sold half of its stake in Ezibuy to Mosaic Brands (formerly Noni B), and launched six certified Lego stores in Australia.
The effort hasn’t gone to waste, according to executive director Richard Facioni, who told Inside Retail the business is in talks with other international brands to bring them to local shores.
“I just came back from New York, and I saw two Lego stores there. They’re great, but what we’re doing is just as good, if not better. I’m proud of what we’re doing, and I think other brands are now looking at that and saying, ‘these guys know what they’re doing’,” Facioni said.
“So, we are now in conversation with other international brands that are not in fashion, they’re not in toys necessarily, that are talking to us about partnering with them to bring them to Australia. That’s an interesting opportunity for us.”
Facioni wouldn’t name the brands in question, though said if Alceon could do it with Lego, they’d like to do it with others.
At the same time, however, Facioni has noticed the impact changing consumer behaviour and a transforming peak season has had on the Australian retail industry. Alceon has taken notice of the brands that are succeeding and the ones that are struggling, and while it will weigh up investment opportunities in “one or two” recently collapsed brands, Facioni is cognisant of the market at large.
“There’s a lot shifting within retail, and that’s where people are getting into trouble. The consumer is changing. Trading patterns are changing. The whole Christmas trading period has changed forever, there’s no point in saying it used to be great. It is what it is now, so how do you realign your business to work within what is a new paradigm?” Facioni said.
“Those that get that right will succeed and take market share away from those who get it wrong. That’s my view, and that’s what I’m seeing across the business as well.”
While the amount of struggling retailers going into administration could come off as an easy opportunity for an investment firm, Facioni said Alceon Group takes a much more methodical approach to choose what businesses they choose to invest in.
While the group owns businesses across the discount, mass-market, and premium ends of the market, Alceon Group needs to be sure their investment isn’t just prolonging a death rattle.
“When we look at [investing in] a business we always look at whether it has a clear customer that it is talking to, it needs to be focused on a segment of the market,” Facioni said.
“You don’t want a brand that does everything to everyone. That’s not our game.”
Mosaic Brands plays to a more mature female shopper, similar to Ezibuy, while Ginger & Smart targets a smart, statement-making shopper, and Lego targets kids and kids-at-heart alike.
“The next part for us is to figure out what we can bring to that equation. How do we make this business better? If we can’t, then we shouldn’t be investing in it,” Facioni said.
“If there’s a way that we can help that is material and measurable, then that’s when we get excited.”
Richard Facioni is executive director at Alceon Group. He is also speaking at Inside Retail Live 26-27 February, 2020. For more information, visit: insideretail.live.
