The 80-year-old family business and jewellery chain Bevilles has entered voluntary administration but the company CEO’s Michelle Beville says the family isn’t going anywhere -- they plan to keep the business and stay in jewellery. The family has put in an offer for a restructured business to the administrator, PPB Advisory.
“We have certainly put in an offer and [PPB] will get other offers and will determine the best offer for the creditors,” Beville says. “Hopefully it will be ours and we can continue on.”
Ian Carson, chairman of partners at PPB, says that just might happen although PPB has to check the market to find the best possible deal. Creditors are expected to vote on the future of the business next month.
“Often, the reality is the people who run these businesses understand them better than other people and understand their worth so I wouldn’t rule it out,” Carson says.
“We have gone to the market to say what is the best deal for the creditors but I’m very optimistic about the potential for a good outcome for everybody, a positive outcome. Initial indications show there’s a potential for a good turnaround, a good restructure, but we’ll see. Someone might come in over the top and buy it.”
He says there have been no other offers so far “but we’ve got people who are ringing us who want to look at it.”
When the business re-opens it will be streamlined and smaller with fewer stores. Carson wouldn’t comment on how many of the 477 employees will lose their jobs.
Bevilles opened in 1934 in Bourke Street Melbourne with Leo Beville and his wife Rae trading as a homewares retailer selling products such as blankets, chests, chandeliers, saucepans and dinner sets. Jewellery was added to the product line in the 1950s and it became one of Melbourne’s leading jewellers.
Leo’s son Keith expanded the business in the 1970s. In the 1990s, Keith’s daughter Michelle and her brother Gary, who works as a buyer for the business, came in and further expanded the business. Beville’s now has 27 stores in Melbourne, Sydney and Adelaide. Keith still comes in during the week.
So what went wrong? Beville says the company had decided last year to change its business model to become a specialised jeweller after seeing its customers wanted jewellery without the distractions of giftware, the sort of stuff people now buy online. This meant the roll out of “new look” smaller stores focused on a jewellery-only format. Giftware would be phased out.
Under her strategy, Bevilles piloted two jewellery-only stores at Highpoint and at Liverpool in Sydney. Both have been successful and Beville says it’s the way of the future.
There was one problem: Lease arrangements. Landlords wouldn’t budge to replace the larger stores on 150 to 180 square metres with smaller outlets.
“We couldn’t implement our strategy to exit out of giftware and enter into our gorgeous newer smarter look stores of jewellery only, in the time frame that we needed,’’ Beville says. “Our current stores are large format and obviously you’re in leases and some of those stores can’t be cut up or changed over.”
In addition, the existing business model was unsustainable and costly. “In the current model, with the giftware and very large stores, there was duplication of warehouses,” she says. “You had giftware in one warehouse, jewellery in another and there was transportation to the stores. It’s like running two businesses in one.
“It makes the whole cost structure of the older model prohibitive. Our new look has worked very well so that’s fantastic but transitioning into that new look and exiting stores was slower than we needed.”
That might be true. But the question is why was all this left until now? Why didn’t Bevilles negotiate it when the leases were up for renewal? Was it left too long?
A subject that had been discussed at great length in the family, Beville says it had drawn the family closer together. “It’s very difficult, part of the blood and one you definitely don’t take lightly,” she says. “I think the most amazing part is that my father is still involved in the business, my brother and I work closely together, I couldn’t be prouder of how we have all worked together dealing with a very difficult situation.”
As for her own future, she can’t see herself leaving the jewellery business. She grew up with it, it’s in her blood. “At the age of four, I wanted to be on the shop floor or write marketing ads for my dad,” she says. “There was never any doubt.”