Price Attack

“...franchisees are starting to experience the benefits
of the New Clicks Australia shared service structure.”
 

Financial highlights and statistics           2003  2002  Operating profit/(loss) before interest and before allocation of net costs of support structures                  A$’000  R’000  3 518  17 999  (17)  94   Number of stores at year end          Company owned   2  –      Franchised   101  95   Franchisee sales A$’m  87.3  –     R’m  446.7  –   Franchisee fees A$’000  3 778  –     R’000  19 333  –

Positioning
Price Attack is a franchise brand of combined retail stores and hair salons, marketing hair care products and related beauty accessories to a younger female market.

The brand was acquired by New Clicks in July 2002 and has now been successfully integrated into the New Clicks Australia (NCA) structures. Price Attack has adopted a stronger marketing focus and this revitalised brand is one of the leaders in the Australian professional hair care market.

Review of the year
Price Attack reported an operating profit of A$3.5 million from franchisee sales of A$87.3 million.

Carmelo Francese was appointed brand leader and has made an immediate impact in terms of relationships with franchisees and suppliers alike, as well as addressing the culture of the business from the previous owners.

When the brand was acquired by NCA, almost half of the franchisees did not have binding agreements. The brand team has finalised agreements with all franchisees and the business is now fully compliant.

The franchise system is working well and franchisees are starting to experience the benefits of the NCA shared service structure, with a specific example being the development of a local area marketing kit.

The rights to the master franchise in Western Australia were acquired during the year, and this will result in increased franchise fees from the 18 stores.

Twelve new stores were opened, bringing the total store count to 101.

In order to address the complexity of hair salons and retail stores, a new store format has been developed to take the brand in a different direction, looking at growing the hair salon component to about 25% of turnover.

Price Attack has formed a strategic alliance with Australian women’s basketball to inject A$750 000 into the sport over a four-year period. This will not only provide heightened brand awareness but also access to a database of 200 000 females in the target market.

The market in Victoria continues to pose a challenge owing to the level of competition and the lack of a Price Attack store base and consequently brand awareness in the region. The brand has been supporting the franchisees with marketing to make an impact in the market.

Strategy
A new positioning will be adopted in the year ahead to align the brand with the value proposition of “You know value, we know hair”.

Fifteen new stores are planned to be opened across Australia.

A new IT platform will be introduced for sales reporting to NCA and store reporting for franchisees.

A strategic alliance with Wella will be maximised to deliver improved returns to franchisees and NCA.