In a frank interview, Briscoe Group CEO Rod Duke talks to Jane Phare about his expansion plans, that troublesome helicopter boatshed, and what he does with his money. * Scroll to the bottom to watch the full interview.
Catch sight of Rod Duke puffing away on a fag outside his Morningside office and you just wouldn't know. Rich Lister ($800-odd million at last count), the man who wants helicopters to land on a boatshed below his four-level Herne Bay mansion, CEO of a $1 billion company. He looks more like a bloke who might have a lawn mowing round.
The fact that he doesn't look rich doesn't bother him. He bought his Omega watch because he liked the bracelet, there's a hint of a gold neck chain but it's hidden behind his customary casual wear and he's still happy to snap up a bargain at one of Briscoes' sales.
"See these," pointing to Luminarc wine glasses reduced from $39.99 to $19.99 a set in Briscoes' Morningside store: "I bought 24 yesterday," he beams.
Duke and his wife Patricia entertain a lot at their home above Sentinel Beach. Patricia loves cooking and Duke loves sharing an aged red from his extensive wine cellar. Wine glasses get broken, so where else would he go to replace them but Briscoes? And there's nearly always a sale on.
Shiny glassware is a subject that takes Duke way back to his late 30s, when he found himself the owner of 12 shabby Briscoes stores that were losing $2 million a year on $20m turnover. In 1989, Adelaide-born Duke had been sent over from Sydney by Briscoes' then owners, Dutch company Hagemeyer, to stop the bleeding.
He expected to be back in Sydney within three years, with an impressive bonus in his back pocket. Instead, in just over two months Duke had made an offer, foregoing his bonus for the keys to the rundown stores.
He started doing simple things like noticing grubby wineglasses languishing on a bottom shelf priced at an odd amount - $2.71 each. Tell you what, he suggested to the sales assistant, let's wash those glasses until they sparkle and put them on the top shelf priced at $2.99.
And of course, they sold. Roll forward 30-odd years and Duke is the master of 89 stores in the Briscoe Group - Briscoes, Rebel Sport and Living & Giving – with three more due to open next year. His family trusts have a controlling shareholding – nearly 80 per cent, worth around $824m.
That shareholding means his trusts earn between $30m and $35m a year and they've just received another $10m from a one-off dividend announced this month.
How can Duke possibly spend all that money? He can't, he says. "I can't spend my salary."
That salary, modest by leading CEO standards, is around $650,000 a year but if he achieves his key performance indicators, keeping the shareholders happy, that pay rate will reach nearly $1m.
He's not a flashy spender – not in a garage-full-of-Ferraris sort of way. He has a nice car, a Porsche Cayenne SUV that fits his golf clubs. Patricia drives a six-year-old Merc. He doesn't have a superyacht but he does have a holiday home - two of them, in fact.
One is an apartment on the Gold Coast where, pre Covid-19, he and Patricia escaped the worst of the New Zealand winter. The other is a house at the ultra-exclusive Tara Iti golf club at Mangawhai.
After shopkeeping, golf is Duke's main passion. Pre-Covid-19, he'd often travel round the world playing golf with a group of mates. And he likes travelling, somewhere different every time. The last highlight was the Slovenian side of the Adriatic coast.
There was a time when there was no time for golf or cruises. Duke was out of the country for five or six months a year, on gruelling 45-day buying trips.
"I can't do that now," he says. "It's just way too big."
And, according to Duke, it's about to get bigger. Apart from next year's plans to open a new Rebel Sport in Morningside, and a Rebel Sport and Briscoes in Silverdale, the group is eyeing up two existing retail businesses.
Duke can't say much. He's signed two confidentiality agreements on the proposed purchases but does say they will sit comfortably within the group without competing.
He's well aware that Rebel Sport is ripe for competition and says the group has "a strategy ready to go" should that happen.
"We're confident we can handle people who want to invade our territory."
By next year Duke will be overseeing more than 90 stores, with the new acquisitions adding to the load. Which brings us to the helicopter-on-the-boatshed issue.
He wants permission to land a helicopter (briefly, he says) several times a week on top of a large boatshed he's had rebuilt on the beach below his home.
The front portion of the pitched roof will slide back at the press of a button to reveal a flat landing site. He'll be able to jump on board the chopper, take off and slide the roof back again from a control on his phone.
He wants to zip round the country so he can visit six Briscoes stores in a day. Or fly off to Tara Iti for a game of golf and an overnight stay.
Duke says his immediate neighbours were comfortable with the boatshed plan and that the opposition came from the Kawau Island Action group, which did not want a precedent set which would allow helicopters to land on boatsheds.
He's a busy man and, by his own admission, "relentlessly competitive". He has no plans to back down. He's already won the first round after Auckland Council withdrew its opposition to the boatshed.
It's that competitive edge and tough bargaining strategy that has given Briscoe Group a reputation for being "difficult" to deal with in terms of suppliers. Duke shrugs that off.
Retailing is a tough business, he says. "So you're always looking to steal the other guy's lunch."
He needs to buy at a good price in order to sell at a good price. And in return for the tough bargaining, brands get high volume sales.
Duke also has a reputation for being tight within the company. For 30 years he and his executive team worked in shabby offices and for that he makes no apology.
"Look, you don't have any cash registers in support offices. All you have is cost." Instead, he spent the money on fitting out the stores.
And the grotty offices worked well when suppliers came calling. "It's easier to buy at the right price from a shabby location than it is from a flash location," Duke grins.
Now he works from new 2000 sq m offices - all tasteful décor, swipe cards and digital sign-in for visitors - in Morningside that cost "many millions of dollars". It means for the first time Duke is within "shouting distance" of his executive team, cutting out the need for phone calls and emails.
"It's great. It saves a lot of time. You get a lot of points of view, decision making is faster."
But all the shouting in the world couldn't have prepared the Briscoe Group for what was coming in 2020 – 89 stores closed for 50 days, with Auckland closed for another 10; 3600 staff and their families to look after.
It was, Duke says, "a nerve racking time". He and the board made a commitment that there would be no redundancies, no store closures, and all staff would be paid in full.
The group took the first wage subsidy to the tune of $11.5m and subsidised the shortfall. Duke is well aware of the public criticism, most of it from Zuru's Nick Mowbray, that organisations like Briscoe Group did not repay the money after they still turned a profit.
Mowbray will say that it was a result of him repeatedly speaking out in the media that Briscoe Group eventually repaid the subsidy. Not so, Duke says. If anything, the company paid more attention to shareholders wanting the subsidy paid back.
The repayment was high on the board's agenda for some months, he says, but directors decided to wait until the likelihood of another lockdown had diminished.
In the meantime, Duke didn't take any salary between March and August, senior executives reduced their salaries, the board of directors cut their fees and the proposed $28m March dividend to shareholders was cancelled.
Since " the Covid era", the group has done well. Black Friday chalked up the biggest single day of sales in the company's history, with the Saturday and Sunday alongside it representing the three biggest consecutive days.
Earlier, Duke conceded that Briscoes probably overdoes the sales tactic. The issue is that the 89 stores aren't in high-traffic – and high-rent - shopping malls. They're destination shopping which means customers need a drawcard to go there. A big sale is a good start.
But there are changes afoot.
"We're spending millions of dollars on the stores making them desirable, more comfortable to shop in, easier to find product." There'll be more emphasis on pushing the big brand names than bargains.
But later, when Duke is talking about the outstanding success of the Black Friday sales, he can't help himself.
"Talking about sales again. Do people like them? Look, they love 'em."
At 70, Duke has no plans to retire. "What would I do?"
Shop keeping's in his blood but his only child, 25-year-old Rodney, is not part of his succession plan. Duke's son works part-time for the group while he is studying commerce but is unlikely to take over from his father.
If Rodney junior wants to be a retailer, that's fine, Duke says. "I'm very happy to assist him, even fund him into a 21st century business, but he's not coming in mine."
He doesn't want Rodney having to sit in company meetings with executives questioning his decisions and comparing him to his father.
In the meantime, Duke is predicting that 2021 will be a good year, if Covid-19 stays away. Apart from this month's special dividend, the March dividend looks to be a safe bet too. Duke will have reached his KPIs so he's pretty sure he'll get his bonus, and his trusts will receive many more millions of dollars in dividends.
While he says he doesn't know what he's going to do with all that dosh, Duke is in fact a quiet philanthropist. "There are a whole lot of people and charities and causes we help." But he's not after kudos. He'll give $5m to a cause with a proviso - no fuss, no names, no PR.
"I think most wealthy people who want to help out causes are like that."
He set up the Duke Foundation which funds a "multimillion-dollar" chair in adolescent mental health at Auckland University after a friend's son committed suicide.
Mental health still carries a stigma, he says, making it an unpopular cause for philanthropists.
"So then I'm in. I will do it."
Both Duke's family trusts and Briscoe Group are big supporters of Cure Kids, contributing millions of dollars. He's keen on supporting charities that look at causes and cures, rather than those that rescue people at the bottom of the cliff.
"That's fine but I don't think there's enough of us at the top of the cliff going 'let's do some serious research. Let's find out what's killing these people'."