Iconic kiwi brand turns 100

One of the country’s most recognised retail brands turns 100 on October 1 with Farmers celebrating a century of trading in New Zealand.

Founded as a mail order business in Auckland in 1909, Farmers has become synonymous with quality retailing in New Zealand with 58 stores nationwide, from Kaitaia to Invercargill.

Farmers is New Zealand owned and managed and has experienced the full range of ups and downs during its 100 years – two world wars, a depression, Australian ownership and a resurgence in popularity in a new century.

Founded by Robert Laidlaw as Laidlaw Leeds, Farmers originally supplied rural communities outside Auckland city and around New Zealand. Its first sale was for a roll of wire netting whereas today its anniversary sale is more likely to feature mascara, a handbag or a fashion garment!

Following WWI, Laidlaw Leeds merged with the Farmers Union Trading Company (Auckland) Ltd, a farming cooperative, thus cementing its name forever in the history of the young country.

There has been a myriad of milestones in the company’s history, many with a distinct focus on customer service, a trait inherited from Mr Laidlaw.

For example, Farmers introduced its first free bus service, taking customers from Wyndham Street up the hill to the Hobson Street store in 1922. Six years later it opened New Zealand’s first free car park building right next to the Hobson Street store.

The renowned Hobson Street tearoom that opened in 1930 and the first Santa Parade was held four years later. Two years after that Hector the Parrot came to Hobson Street, assuming the role of company mascot until 1977 when he died at the ripe age of 131.

The war years were tough for all retailers but Farmers dug deep to assist the war effort, at stages distributing more than 10,000 food parcels a month to Britain and providing ongoing support to staff who were affected by the war. In 1954, much to the fascination of the children, escalators were installed in the Hobson Street store.

Throughout the ‘60s and ‘70s Farmers underwent an ambitious expansion plan, while dealing with changing retail patterns. The company acquired numerous competing chains including the large Haywrights chain. In 1970 it acquired South Island’s Calder McKays officially making Farmers the biggest department chain in the country.

In 1986 Farmers was taken over by investment company Chase Corporation and six years later was bought by Deka with Maori Development Corporation and Australia’s Foodland as owners.

The business returned to New Zealand ownership in 2003 when James Pascoe Ltd purchased the retail business of Farmers. James Pascoe owners Anne and David Norman set about a programme of refurbishing stores and modernising stock and by 2005 a wider range of women’s fashion garments was in-store.

The Norman’s ownership has seen a huge revival in Farmers’ fortunes and this year the business is celebrating its centenary by donating $1 million to New Zealand communities and charities.

“Under the care of its new owners and management Farmers has been repositioned into a vibrant, modern retailer focusing on leading brands for fashion, beauty, and homewares,” says Farmers managing director Mr Rod McDermott.

“Because we are New Zealand owned and managed, we are close to our communities and customers enabling us to respond quickly to changing consumer demands and market opportunities.”

Each Farmers store has selected a local charity or community project to support from June to August, alongside national activity with Farmers corporate charity The Leukemia & Blood Foundation.

Money raised by each store, distribution centre and head office is being matched by Farmers to the limit of $1,000,000.

NZ ownership revitalises retail centenarian

The so-called crash of ’87 may be a distant memory for many but for one of the country’s renowned retail brands the repercussions have been nothing but spectacular.
On the eve of its 100 years celebration, Farmers Trading Co Ltd can reflect on a return to New Zealand ownership that has seen more than $100m invested in the business since 2003 and a further $80m committed up to 2012.

In the stock market crash of 1987, then owner Chase Corporation recorded the biggest loss in New Zealand history, disappearing from the bourse and resulting in Farmers being put up for sale.

Throughout the 1990s the brand struggled through indifferent ownership. Funded by Australian food giant Foodland, DEKA bought Farmers for its huge cash flow which was used to finance underperforming DEKA operations.

DEKA eventually folded and other efforts to bring Farmers in to the 21st Century were only partially successful. With Foodland more focussed on its New Zealand supermarket operations, Farmers was put up for sale in 2003.

Enter Pascoes the Jewellers owners Anne and David Norman. In a joint venture with F&P Appliances, they bought the company for $312m - F&P paid $189m for the Farmers finance business while Pascoe’s forked out $123m for the retail business.
The Normans injected $30m in cash immediately, but it was the timely change in management style that had the biggest effect. An example: when the Farmers distribution centre was having problems, David Norman fixed them himself even helping to load furniture and pick up rubbish.

Under the Norman’s stewardship, Farmers’ divisional structure came under scrutiny and by attrition, senior executive staff numbers were reduced from eight to three. The Normans worked tirelessly to cut $25m of costs from the business, also reducing the level of discounting and increasing floor staff by 15 per cent to improve customer service. Losses were reversed and a further $35 million was invested in IT infrastructure to improve stock control and reporting.
With Farmers back on track, current CEO Rod McDermott – a Farmers man for 18 years – was appointed chief executive in 2006 when David Norman crossed the Tasman to cement in Pascoes’ purchase of Angus & Coote.

“The key thing is that the Normans reinvest any profits back in the business,” McDermott says. “Thanks to their experience and sheer hard work, by then we were making a small profit and able to move on from doing the basics right to re-establishing Farmers as a fashion store.”

Anne Norman’s dedication to and enthusiasm for marketing and buying improved the stores’ ranges of merchandise. Working closely with management and talking to customers, she still takes a close interest in the brands insisting on a balanced assortment of merchandise.

McDermott set about ensuring Farmers’ customers get a consistent shopping experience right across the chain. By 2007 funds were being reinvested in store refurbishments throughout the nation in rural and regional stores as well as malls and high streets. By the end of last year – Farmers’ 99th in business – more than half the stores had been renovated with some rebuilt entirely.
The same policy was applied to stocked brands. “There’s no selective stocking any more,” McDermott says. “Farmers Nelson gets the same higher quality fashion and branded goods stocked by Farmers Newmarket.”

Suppliers soon began recognising the new opportunities for showcasing their brands and now Farmers offers a wide choice of national and international brands across beauty, fashion and homeware.

“A few years ago you just wouldn’t have seen a Chanel or a Lancôme in any Farmers store – now both brands are available across the country,” McDermott says.
The expansion of Farmers is set to continue with the company announcing an ambitious plan that will see new stores built and more undergo significant reconstruction.
Today Farmers occupies 282,000 sq.m. of retail floor space and by 2012 stores yet to be opened will have added a further 15 per cent or 42,000 sq.m. – that’s a total area of around the size of 54 rugby fields. A further 35,000 sq.m. of retail space will be refurbished.

Staff numbers, presently at 3,900 are expected to rise to 4,500. Not bad for a retail brand in the midst of a global recession.

“The return to New Zealand ownership has been good for Farmers and it has been good for New Zealand shoppers,” McDermott says. “We have every intention of being around for another century.”