Woolworths CEO Michael Luscombe said consumers have responded well to the new Dick Smith branding and formats.

Woolworths CEO Michael Luscombe has said that the company will set a deadline for the consolidation of Power House and Tandy brands.

In a press conference following the announcement of Woolworth’s half year results Luscombe said "the Power House brand will cease probably by the end of the financial year and we will be phasing out the Tandy brand over the next couple of years."

Luscombe also elaborated on the positive performance of the Dick Smith brand, saying that customers have had a positive response to the new branding and store format.

“As I mentioned earlier was the best performing comp sales of electronics brand in the Australian market in the last half. I think the most pleasing thing has been the wonderful customer acceptance of our new branding and our new formats. As I mentioned earlier, the sales results have even surprised me and I don’t get surprised by much in retail, so [Deborah] and the team have done a fantastic job,” Luscombe said.

The decision to phase out Power House and Tandy came down to customer feedback, according to Luscombe. He said the company went back to its consumer base and asked questions about relevancy, trust, product range and over customer experience of the three brands.

“What they said was the Dick Smith brand is fantastic, we love it, we trust it, you’re well-known
for being the best informed in the marketplace.  We don’t know what Tandy’s all about, and Power
House, we’re not sure what that’s about,” Luscombe said.

“They also said you know what, you’ve got lots of stuff that is no longer relevant, but you haven’t
got some products that quite frankly we want to see in a Dick Smith’s store.  So we wanted to bring
those in,” he added.

Tandy leases will not be renewed  
As Woolworths look to expand Dick Smith stores around Australia, Luscombe said they will end leases
on Tandy stores and relocate opposed to rebranding old store. He said the current Tandy stores and
too small.

“The Tandy stores are too small to be Dick Smith stores, so as we exit the lease for a Tandy store,
we’ll be looking for a newer site that’s around about the size that we want to put a Dick Smith’s
store in there.  We obviously have to honour our lease commitments for those 84 stores and they
generally will complete over the next three years,” Luscombe said.
 
Indian venture  
Luscombe said the Croma business with the Tata Group in India is “moving along quite nicely,”
however high property prices somewhat hampered store expansion.

“Probably the only thing that’s held us back a little bit has been the property arena in India has
been extremely hot over the last couple of years and, of course, as is happening around the world,
prices for property have now come back to more realistic expectations, and I would say that we
should see an acceleration of our new store rollout in the next couple of years,” Luscombe said.