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Spotlight Group’s lofty plans to open 150 stores in five years

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Retail juggernaut Spotlight Group is gearing up to embark on a 150-store expansion drive across New Zealand, Australia and parts of Asia.

The $2 billion company, which also owns outdoor equipment retailer Anaconda and homewares chain Harris Scarfe, sees a bright future in bricks and mortar retail.

With 20 homewares and fabric stores already operating across New Zealand, Spotlight plans to add another 10 locations to its portfolio within the next five years, investing more than A$75 million ($81m) in the market on store openings alone.

It also plans to introduce its Anaconda brand to the market.

Spotlight Group Holdings is owned by the billionaire Fried and Fraid families.

Zac Fried, director and co-chairman of Spotlight Group, told the Herald the opportunity for growth in the New Zealand market was vast through new store openings and retail park shopping developments.

“We’ll be doing at least another 10 regular stores from 1500 up to 4500 sq m in size,” Fried told the Herald in an exclusive interview.

“I think there is room for at least 10 full line stores and maybe 8-10 creative stores.”

Construction will begin later this year on an almost 4500 sq m Spotlight in Wellington. It has also purchased another store in Wellington and will be redeveloping it as part of wider plans for a retail park housing other retailers, expected to cost between $60-70 million.

Spotlight also plans to make some of its existing Auckland stores bigger.

It recently completed a $40m development in Christchurch, and last week opened a 4500 sq m store in Christchurch, and last Thursday opened a 2000 sqm store in Pukekohe, which was attended by Auckland mayor Phil Goff.

“In the Auckland market, what’s next on our radar and what we’re working on is Silverdale in the north – we’re quite keen to get something on the ground there, and then we’ve got other markets around New Zealand.”

Spotlight has been operating in New Zealand for over 25 years and employs 750 staff across its 20 local stores. In total, the group has about 140 Spotlight stores, 70 Anaconda outlets and 46 Harris Scarfe. There are plans for at least 10 new stores each per year in New Zealand, Singapore and Malaysia.

It expects to spend at least A$550m to open 150 new stores in the next five years, about A$75m of which will be spent locally in New Zealand and employ an additional 1000 staff members. That does not include an additional A$100m on its retail park development in Wellington.

“We’re pretty bullish about New Zealand, and excited about it,” Fried said.

The group is actively looking at good locations to bring its outdoor equipment brand Anaconda to New Zealand as part of the chain’s expansion plans.

“One of our preferences might actually be acquiring one of the other competitors there, there’s a couple of really good competitors on the ground in New Zealand, and that might be the way for us to come into the market,” says Fried, adding that an acquisition would allow the group to leverage its back-end operations.

“It’s a two-prong approach, we’re going down to avenues; investigating bringing Anaconda over and it might be through developing a new Anaconda concept, which will be launched in Sydney later this year, and/or we may acquire an existing retailer in New Zealand.”

The private company recently acquired Australia’s second-oldest retailer Harris Scarfe about 10 months ago for a reported A$50m, and has already begun expanding its store foot print.

While e-commerce makes up between 10-20 per cent of sales for the group, and lockdown had proven the popularity of online shopping, Fried said bricks and mortar store remained an important major focus for future growth as customers still wanted to shop in stores.

“When we look at retailing, it’s not one or the other,” said Fried. “If you look at Amazon, Amazon was a pure online play, now they are opening up bricks and mortar stores, and have taken on [grocery chain] Whole Foods.

“What we’ve got what a pure online player hasn’t got is warehouses – very close to all of our customers. By having stores all the way around [the country] we are closer to the customer.”

The group was constantly evolving its retail chains, expanding into new categories and services to offer greater convenience. Shopping was all about convenience, which was why large format stores were doing so well, he said.

“We don’t sit still and say ‘We’re really good at what we do so let’s sit back and see what happens’, we are constantly reviewing, challenging and improving the way we do things on a daily, weekly and yearly basis.”

Spotlight Group has about 10,000 employees and makes A$2.1b in annual sales.

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