NQR in Administration While Most Stores Are Profitable

neil on 27/01/2018 - 11:16
Last edited 27/01/2018 - 11:17

Looks like NQR has gone into administration but not due to profitability:

“Most of the stores are profitable and making a contribution; there’s a couple that we’re going to have to have a look at, but that’s all part of assessing the business," he said.

Documents lodged with the corporate regulator show NQR ran at consecutive losses of $3.6 million and $3.8 million in the past two financial years, on steady sales revenue of about $35 million a year.

via SMH

Graph below of number of NQR deals posted over the past 5 years.

graph

Not sure what's going on here but somethings not quite right about going into administration while most stores are profitable.

General Discussion

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Comments

  • chumlee on 27/01/2018 - 11:21

    Depends how much profit each store is making as costs will keep rising

  • rawm on 27/01/2018 - 11:59
    +2

    Terrible news for all staff and suppliers.

    I have found that NQR in recent years has been a little more risk averse also; their 'opportunistic buys' have greatly reduced and their product range has become far more predictable and therefore less enticing. I visited at NQR almost weekly during the year (posted heaps of deals too) but that has diminished quite a bit in recent times. There is definitely a market for NQR in Victoria and possibly other states; the company needs to ensure their operations are well managed and costs are kept low.

    Revenue of ~$35 million surely should mean the company is somewhat profitable, so on the surface it seems mismanagement or something more sinister is at play.

  • capslock on 27/01/2018 - 12:06
    +2

    There might be huge costs at head office level so it may not matter if individual stores are profitable.

  • JIMB0 on 27/01/2018 - 12:50
    +1

    My local one used to sell milk and fresh bread, so I went there for those items and to have a look at what else they had. Once they stopped selling it I just went to the IGA instead.

  • holdenmg on 27/01/2018 - 12:51

    I had a look at the Store locations https://tinyurl.com/ybgwhel8 to see if there were any clues.

    Some of them are quite remote.

  • DarkOz on 27/01/2018 - 13:01
    +2

    “Most of the stores are profitable and making a contribution; there’s a couple that we’re going to have to have a look at, but that’s all part of assessing the business," he said.

    This is as vague as it comes.

    I just looked at their store locator and it showed 18 stores. So how many is most? 10 or 16? What is the meaning of profitable? Making $1 profit is still considered profitable.

    If you average the revenue of $35 million over 18 stores it's only about $2 million per store. The average loss is about $200,000 per store.

    • JimmyF on 27/01/2018 - 13:56

      Yeah I thought the same…. It doesn't add up. Hmmm if most are profitable, then close the ones that are not.

      But then to turn around and say they have yearly losses of $3.5M, its like say what!?

      • Baysew on 27/01/2018 - 14:11
        +4

        It's not quite right.

      • ihbh on 27/01/2018 - 15:28
        +1

        Not necessarily. The loss making ones can be contributing to fixed costs. They might need to open more stores with a capital injection to reduce per unit costs and increase buying power.

        • JimmyF on 27/01/2018 - 21:52

          But as they say, most of the stores are profitable and making a contribution, so do you lose $3.5M/yr or $200k per store? Cut the ones not making money and return to profit.

  • pasey25 on 27/01/2018 - 13:17

    How’s their debt profile?. Could easily derail a business like this

    • JimmyF on 27/01/2018 - 13:57

      its in the article

    • Baysew on 27/01/2018 - 14:07

      NQR's total liabilities of $23 million at June 30, 2017, outweighed its total assets of $7.8 million.

  • cloudy on 27/01/2018 - 14:44

    They’ve been closing stores for ages now. Glenroy, now Coburg, all the inner city can not survive given rent, only the more remote locations left.

    • holdenmg on 27/01/2018 - 15:07

      Aldi opening in Glenroy, something something…

      • cloudy on 27/01/2018 - 19:27

        around when? im talking about years ago

    • BobD on 28/01/2018 - 08:29

      Hastings VIC closed several months back. However, competition is hot. Got Coles, Woolies, S IGA, and Aldi in town. All within less than a kilometre.

      • 4wd on 28/01/2018 - 19:20
        +1

        Lilydale is in the process of closing (Feb 16).
        Kilsyth, according to the Lilydale manager, loses money and they've got Woolies, Coles, and Aldi within 100 metres but don't seem to be closing, (got to grab more pies this week :)

  • DU99 on 27/01/2018 - 16:40

    my nearest from deer park is werribee/melton..we lost our sunshine store think the rent killed that was in shopping centre

    • TransportPosters on 28/01/2018 - 21:42
      +1

      I really miss that store. Once that shop closed a couple of years back I've barely been back to that particular shopping centre.

  • Dave Id on 27/01/2018 - 16:53
    +1

    Aldi would be seriously hurting NQR.

    • cloudy on 27/01/2018 - 19:43

      I seriouly doubt what you said has any merit, given nearly all NQR stores are in regional locations like Sale, melton, moe, etc. Those locations got aldi last if they have an aldi at all.

  • Baysew on 27/01/2018 - 17:14

    From May 27 2009 JOBS BLOW: Discount supermarket NQR to close

  • Ozpit on 28/01/2018 - 09:50
    +2

    I always thought NQR was a poor choice of name for a retailer (or for anything). Sure, their products are usually not top-shelf known brands, or are less than perfect, or close to their use by date, but alluding to their products as 'not quite right' has pretty negative connotations. A business name like, for example, Almost Perfect, would have been a much more positive marketing strategy, attracting more customers through their doors. At least to my thinking.

    • DU99 on 29/01/2018 - 11:23

      Like the REJECT SHOP..nothing is a reject

  • whodidthat on 29/01/2018 - 11:39

    I've been to NQR, when we were in Victoria.
    It's setup is very much like a company that traded for many years back in UK.
    Initially as "Chicken & Egg" then "Job Lot".
    Don't know what happened, as all branches were always busy, but they suddenly went bust and closed quickly.

    There's definitely a market in all areas for companies like this, pity no one can really make a go of it.

    • 4wd on 29/01/2018 - 16:30

      Co-op in the UK started selling items past BB dates at 10p each last year: News item

      It'll probably cause other supermarkets to follow suit which will push smaller retailers that rely on selling dated/end of line/overstocked goods out.

      • whodidthat on 29/01/2018 - 19:31

        Unusual for Co-op.
        I see it's only covering East Anglia at the moment, wonder if they'll do it countrywide.

        • 4wd on 29/01/2018 - 22:55

          I'm surprised that they didn't bring it in up north where Co-op are more predominant and incomes are generally lower.

          Used to have a place in North Yorkshire, three Co-op stores were the only supermarkets within 15 miles until an ASDA opened within the last couple of years.

          That said, there is both a bulk (eg. detergent, dried fruit, stuff that you can bring your own container and fill) and a factory seconds (misshaped/broken food eg. biscuits) within the village where we were.

        • whodidthat on 30/01/2018 - 11:25

          @4wd: I agree.

          I'm from North Yorkshire, Co-op used to be all over the place. Just about disappeared then made a comeback.

  • daydream on 06/02/2018 - 11:43

    A real shame if they go. Nothing in our local market of their size to replace them. Great clearance place for lines the major supermarkets don't want to stock/delete (and that's a lot with their pressures on manufacturers). A big loss for bargain hunters!

  • 4wd on 06/02/2018 - 17:09

    NQR Lilydale are now closing this Sunday, February 11.

    Today it was 30% off marked prices on all remaining stock except alcohol.

    Tomorrow or Thursday, (checkout girl wasn't sure), it will be increased to 50% off.

    1.25l Kirks/Slades drinks (eg. 1.25l Slades Sparkling Mineral Water $0.89 - 30%), most of the freezer is empty but still some frozen meals avail., Paul Newmans Coleslaw dressing ($0.99 - 30%), tea, Oreo Mocha thins, dog food, lollies, cleaning stuff, soap, wash, etc, etc.

    Store probably has ~20% of it's stock left … and probably the stuff no-one wants but who knows someone might find a bargain.

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