Fast-growing Australian online retailer Canningvale has taken a big leap into Asia after rescuing iconic Singapore department store Robinsons from the brink, with a buyout deal that will see the 165-year-old retailer transformed into a pure digital play.
Robinsons, described by outgoing Canningvale managing director Jordan Prainito as the 'Myer of Singapore', has been struggling for some time. However, the impact of the pandemic was the final straw, pushing the group to close its last store in January this year.
"While they will be run as separate businesses there are synergies that will be useful and we'll be looking to get the most value for Canningvale and Robinsons from the acquisitions," says Prainito.
"For Robinsons Singapore it's about modernising the business and bringing it back to where it should have always gone. We plan to apply the digital transformation of Canningvale to Robinsons over the coming months."
Prainito will lead Robinsons Singapore as its new managing director, while retail industry veteran Mark Goddard has been named Canningvale Australia's new managing director to drive the group into a new era of growth.
Canningvale, a company founded in 1977 in Perth by father-and-son team Giovanni and Frank Prainito as a manufacturer of terry towels, has become one of the fastest-growing digital retailers in Australia.
The group's digital transformation has been led by Jordan, a third generation of Prainitos, since 2016, a period that has seen Canningvale Australia's e-commerce turnover surge tenfold.
Robinsons Singapore, which was previously known as Spicer and Robinson, was founded in 1858 by Aussie businessman Philip Robinson and a former Singapore jailkeeper, James Gaborian Spicer.
It established its first apartment store in Singapore in the 1940s, growing to a peak of seven stores operating in Singapore, Malaysia and the Middle East.
"The former owners were very focused on bricks and mortar and didn't have any strategy to take online seriously," says Prainito.
"The company has a rich history, the brand has strong salience with Singaporean and South-East Asian customers, it just needs to be modernised."
Robinsons Singapore was previously owned by United Arab Emirates-based Al Futtaim Group, which bought the group's retail operations for $600 million in 2008.
Although financial details of the latest sale have not been disclosed, Canningvale was among a number of parties to have lodged an offer late last year to creditors of the business as part of a liquidation process.
Prainito, who studied and worked in Singapore for four years, knows the Robinsons business well. He believes the uncomplicated nature of the Canningvale offer, which was not subject to funding or debt, got the deal over the line.
Canningvale Australia's new managing director Mark Goddard, with 30 years' experience in retail heading Kmart, Spotlight Retail Group and listed New Zealand fashion group Hallenstein Glasson, played a key role in the acquisition.
"That's why we brought Mark on board as managing director - to take Canningvale to the next level," says Prainito.
"Mark's advice and guidance over the process has been invaluable. He brings a wealth of knowledge and experience in retail, and I bring a more e-commerce flavour to our conversations and it's been working really well."
Prainito will be relocating to Singapore to head the Robinsons transformation program.
"I know the brand and how important and iconic it is to Singaporeans and largely the southern east-Asian market," he says.
"Given it's such an iconic business it needs to be run by Singaporeans from a cultural point of view. We have a growing satellite office in Singapore, hiring former Robinsons staff. We really see great value in resident knowledge in businesses."
While Canningvale Australia has been looking to build on its growth momentum through international expansion of a number of years, the company is still planning to explore further opportunities closer to home.
"Canningvale is a strong business now and we've been on the lookout for some time around what could work with the current experience we've built up over time.
"Singapore and South-East Asia is its own market because it is so connected. The growth of the middle class is incredible and it's the place to be.
"But for Canningvale there is still a massive opportunity in Australia to gain a significant market share and we also want to bed down opportunities in our own backyard."
While there are no immediate forecasts of profitability from Robinsons Singapore, Prainito says there are lessons to be learnt from the previous owners' strategy which was aimed at turning Robinsons into the "Harrods of Asia".
"Historically for Robinsons, and what made it great, was its focus on the middle to upper market. It was less of a David Jones and more of a Myer in terms of customer demographic," says Prainito.
"The focus to push this up into the top tier of the market didn't necessarily prove to be the right strategy and when you lay COVID on top of that"
Prainito sees immediate benefits for Robinsons from Canningvale's knowledge in product sourcing, especially in the home category.
"I'll be shocked if Robinsons isn't going to be a customer of Canningvale's as a sourcing arm for the business."
The company plans to launch Robinsons' new e-commerce website before the end of June.
"Localising the businesses has been a focus and we've been positively surprised by the number of brands supporting us in the relaunch. We've had over 266 brands signed up for launch. That is about 10 times the amount I expected and a lot of these are local brands.
"We won't have them all on board for the launch because there are system integrations yet to be worked out, but we are aiming to have 200 brands on the site for launch."
Prainito is aware of customer expectations when the website goes live for the first time.
"Our focus has been around balancing the expectations of consumers with relaunching a brand like this and what the customer experience needs to be."
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