Funny thing is, P Brand is a very badly run company. Too many piss weak brands that do not make money. If I were running that company I would get rid of the crap brands, limit the number of products made, concentrate on quality and the inevitable cost savings & profit increase resulting from rationalising the products.
Sorry to bust your bubble Buddy – but isn’t that what PBG is doing? Selling or ceasing the existence of those brands that under perform? The irony is this too can result in job loses. For example, if they decide to cease the manufacturing of Dunlop foam for bedding.
Maybe the board of PB should have a look at the way R.M. Williams is run.
You mean, PBG should follow RM Williams?….
R.M. Williams moves to China
Bootmaker and Australian icon R.M. Williams has broken with 60 years of tradition by shifting manufacturing offshore. But the outfitter to bushmen and the fashion-conscious alike stressed that it would import only lower-cost items such as logo-bearing T-shirts, a few other shirts, and baseball caps. Concerned about defending the brand identity of the 60-year-old company, chief executive Hamish Turner said all design and development would continue in Australia. He said the decision to move some manufacturing to China came down to the fact that "the prices of the offshore produced items will be more competitive". (Source: SMH).
Also, don't forget RM Williams rival Bludstone moved manufacting offshore not long ago.
If anything, both the RM Williams and Bludstone examples, solidifiy Morphett’s claims that PBG was one of the last Australian manufacturing companies to remain in Oz. And as RM Williams claims design and development will remain here in Oz…so too for PBG and why most of the job cuts are blue-collar and not white.
PB management like you still think of the Chinese factories as sweat shops with thousands of lowly paid workers working in third world conditions couldn't be further from the truth!!! They can produce first class goods if you are prepared to pay for it.
Considering PBG have ppl on the payroll in China and all over Asia and have distribution centres there, I’d say Vince that’s a pretty dumb statement to make. 75% of Bonds' products comes from China already.
The problem for PBG is their contracts are in US not AUD, and the AUD has slipped considerably. One wonders in hindsight if the acquistions of Yakka, Sheriden, and some of Globe International brands like Mossimo and Stussy were the right ones considering the debt it has put PBG in.
My question is "why did they wait until they hit an iceberg before thay start building the lifeboats? what the hell were they doing all these years?"
They didn’t, they’ve been planning to move manufacturing offshore for sometime. It’s just the governments have been giving them a handout to keep jobs here, and the economic crisis has intensified.
One area PB management had identified is that they had too many brands (something like 600) and by consolidating the number of brands they can save significant costs.
Not 600 – 200. They’re not consolidating, brands like Repco and Malvern bicycles, and Dunlop Sport are on the market for sale. Others will just cease production.
But if the exces continue managing this company same as they have been, then I would not like to be a shareholder.
As a peeved off shareholder, I find it sad, that Oz once a strong textile producing country is a shadow of it’s former self. I find it hilarious and amusing that both sides of government are having a go at PBG for sacking workers yet both will jump on their soapboxes and sing the praises of free markets….those same free markets that have seen textile, clothing, and footwear jobs over the last 40 years disappear to cheaper workers in Asia to keep margins increasing – afterall, there’s no such thing as a jock and sock bubble like there was in property that would see ppl paying $40 for a pack of socks.
One then can hardly blame PBG who accepted government handouts to keep ailing industry jobs afloat as long as they have in the name of politics - as in no job losses means happy unions and voters. Now they're the scape goats for wanting to try and become profitable again.
Blame free markets, If anything, PBG have themselves to blame for not getting rid of non-performing brands a long time ago rather than waiting to hear what their consultants reported.
Their business model, to dominate the market in low, middle, and high cost brackets of an industry worked well during the boom economic times…sadly, not now. For example, Grosby in the low-end market to Julius Marlow in the high-end of footwear industry.
Oh, and ask the banks if they want to provide credit to the textile, clothing, and footwear manufacturers in Oz. By all accounts, ANZ is the most hostile to the idea.
Take Ralph Lauren's Polo shirts for example.
Very high quality, and consequently highly priced garments from an American designer with, what a surprise, Made in China on the tags.
People still pay for a) brand recognition and wankyness and
b) Top quality manufacturing of the garment as opposed to the $10 tops one could buy from local chain stores, etc.
Spot on. Walk into a DJ’s and look at the polo shirts they sell and tell me there worth the $70- $80 they’re asking for? The quality looks no different to that found in Lowes or Best&Less. It’s just an embroided logo you’re paying extra for.
Recall the DVD player craze of the early noughties. I remember spending 3 months researching a $300 China model compared to that of the $700-$1K models from Sony, Panasonic, etc. And found to my amazement the $300 unit had the same OEM as Panasonic, yet was considerably cheaper. Infact, it was even region-free, Sony was asking an extra $100 to pop in a CD that would make their units region-free - the cheapies came packaged region-free!
Years later someone who worked for Strathfield Car Radios told me how on a trip to Taiwan he went to the factory that produced the DVD players for all the competing brands – the well known and not so well known, and they were basically all on the same production line, just that the branding and casings were different…so then, why would you pay hundreds of dollars for a Sony when an Omni (at the time) was a better alternative. My reason for going down this path, was because I got burnt buying supposed best brand home entertainment technology that ended up being crap.