Freeze frame at Fletcher Jones and Darrell Lea

The demise of traditional retailers Fletcher Jones and Darrell Lea acts as a warning to others that a successful business model is one that evolves to meet the needs of its customers.


We’ve seen an unfortunate number of collapses this year, but none has elicited the same emotional response as the demise of clothing retailer Fletcher Jones and chocolate seller Darrell Lea.

The similarities are obvious. Both had a history of family ownership. Both became developed iconic brands, national footprints and legendary products. In the case of Fletcher Jones, it was their famous men’s trousers; for Darrell Lea, it was their Rocklea Road.

But perhaps most telling was the fact that both were arguably at their apex some decades ago. The names and locations of the shopping centres they lived in might have changed, but Fletcher Jones and Darrell Lea changed their basic product range and their philosophy very little.

And why not? For years, the formula worked. Customers knew what they were getting and were prepared to pay for it. Both companies placed themselves at the upper end of the mid-market. Not too expensive, but not too cheap. Good value, good quality. Everyone knew what they were going to get and customer loyalty from a big group of shoppers who grew up with their brand was probably high.

Indeed, that’s exactly why many are emotional over the falls of these chains. These businesses are/were family favourites, seemingly frozen in time from a gentler, better age. It’s hard to say how much Fletcher Jones and Darrell Lea traded on a sense of nostalgia, but certainly Darrell Lea’s branding and packaging carried an unmistakably retro feel.

Can we blame the entrepreneurs behind Fletcher Jones and Darrell Lea for becoming frozen in time? Entrepreneurs often talk about finding the formula, the right mix of range, pricing, scale, branding, customer service and quality. Once you’ve got it, why change it?

For many years, the answer from the owners of Fletcher Jones and Darrell Lea was: Why indeed?

While both businesses did shift their models over the years – Fletcher Jones switched to importing rather than manufacturing, and Darrell Lea expanded its distribution footprint to include chemists and other retail outlets – the general philosophy and feel of the brands appeared to stay largely the same.

Sales may have slowed in the last three decades, but the two businesses survived. It was when this current bout of structural change belted the retail sector that their models finally cracked.

It’s sad to note that while Fletcher Jones would have been one of Australia’s better known brands, a buyer for the business could not be found. So frozen in time was the brand that it simply couldn’t be revived.

Will the same fate befall Darrell Lea? Reports this morning suggest a buyer was in the wings, but the deal fell over at the last minute. I expect the administrators will talk to plenty of tyre kickers, but there’s a danger Darrell Lea could be as frozen as Fletcher Jones.

The lesson for entrepreneurs is that past success is no guarantee of future success. A great formula that remains unchanged can sustain a business for many years, but the best formula is one that evolves with consumers and markets.

This article first appeared on SmartCompany on July 13. Republished with permission.

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