Farmers Group's new owners create a new image

By IRENE CHAPPLE

Farmers will unveil its new tagline - "Your Store" - in August as part of its new owners' revamp of the 98-year-old retail chain.

Farmers chairman Denham Shale said the new advertising campaign, being created by Colenso.99 after it won the coveted account from Singleton Ogilvy & Mather last month, would give customers "ownership" of the store.

It replaces the current tagline: "Full of surprises".

"Probably the main thing about the advertising account is that we want to see if we can give a fresh image to Farmers," said Shale. "We want to make Farmers a fun place to go."

The account's switch - which will add more than $20 million to Colenso's billings for the year - has come just a few months after jewellery retailers David and Anne Norman bought the company from listed Australian retailer Foodland.

The media-shy couple own family business Pascoes, established in Auckland early last century, and Stewart Dawsons.

They purchased Australian chain Prouds from administrators in 1996 and returned it to profit within three years.

The purchase of Farmers in October has swelled group turnover to more than $1 billion.

Shale said sales in Farmers stores were up 3 per cent for the six months to April compared to the same period the previous year.

He would not detail sales figures, but previously published figures for the Farmers chain show its sales for the 2003 financial year increased from A$606 million ($674 million) to A$644 million ($717 million).

But its earnings before interest, tax and amortisation dropped from A$43 million to A$37.6 million.

Shale said margins had been kept steady under new ownership and said the $122.3 million purchase was a good buy.

There have been teething problems; former chief executive Nick Lowe walked away last month with a settlement after he resigned and sued Farmers for breach of contract.

He will not be replaced, with David Norman becoming group managing director and working with an executive team of three, including long-time Farmers employee Rod McDermott.

Four executive level staff, including Lowe, have left the company through redundancy or resignation.

Shale said the distribution centre, which employs more than 400 people, was Farmers' immediate area of concern, as it was not efficient: "We get that right, we're home free."

The company wanted to streamline its operations by increasing its permanent staff and lessening its reliance on temps.

The chain - which operates around 60 stores - would not be expanding for at least a year while such issues were sorted out.

Initially, relocations of stores and mergers of Farmers' and old Deka sites were most likely.

But there are plans to bring Farmers upmarket, appealing to the Smith & Caughey type shopper rather than The Warehouse customer.

Switch and Substation - "store within store" concepts which are targeted to the teen market and were a brainchild of Lowe - would stay, said Shale.

But Farmers had already negotiated stocking upmarket brands such as Jigsaw and Table 8, expected to be on shelves by next winter.

Shale said the Normans had introduced a culture which was "pretty laid-back".

"David brings out the best in people ... he gives them range more than other chief executives. It means they can express their ideas and we have found [there are plenty]."