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Retailer – BB Retail Capital (BBRC)

‘If it’s worth doing, do it well, do the best you can. If you can do it, you ought to do it.’

Brett Blundy’s story started with a small record store in Pakenham, outer Melbourne, in 1980. His private investment company, BB Retail Capital (BBRC), is currently one of Australia’s biggest retail groups, investing in a variety of concept enterprises and properties. Some of the retail ventures along this colourful journey have included Adairs, Bras N Things, diva, Dusk, Lovisa, Sanity, HMV, Virgin and even BridgeClimb on the Sydney Harbour Bridge.

www.bbretailcapital.com.au

Interview

BRETT KELLY: Brett, you’ve built an amazing business while managing to keep a low profile. Tell me, where did you grow up and how did you get started?

BRETT BLUNDY: I’m a country boy, I grew up in South Gippsland, Victoria. My father was a farmer – carrots, cabbages and potatoes. At the age of twenty, I decided it would be a great idea to get into business. I didn’t really know what business I wanted, but I liked people. A friend of mine at school had found a couple of record stores called Disco Duck that weren’t running very well, and essentially, we thought that would be a great business to get into. We bought both of the stores, closed one, combined the stock and opened our very first store in Pakenham in country Victoria.

BK: Did you like records or did you just like business?

BB: To be truthful, I’d have to say my lifelong ambition since I was about twelve was to be in business. So, first and foremost it was business. At the time, records were really just the vehicle to achieve that.

BK: I know you went on to get more stores, how did that happen?

BB: Well, first, I’ve got to tell you the truth. That first store in Pakenham was a disaster, financially. It didn’t work. It lost money from day one. Both my partner and I thought we were going to work in the store but we had to go back to work. I went back to piecework, which was basically doing any job I could find –unloading semi-trailers of hay, bunching carrots, etc. Then we found the cheapest person we thought we could trust to put in the store. Her name was Debbie Dolan. She was sixteen and my partner’s next-door neighbour, so we knew her.

Really, that was the start of my journey. I just started learning. That was before mobile phones. I was in a rural environment so I’d have to find a phone at lunchtime. I’d ring up and say, ‘How are you going? What’s going on?’ We’d go down in the evenings and do the bookwork, the ordering, run the business side of it. We really learned a lot, even though we were losing money.

To this day, I still think it was the best lesson that I ever learned. It was really hard to work to fund the store and run the business outside of hours. The hours were crazy, but I was twenty and thought we could do it all – no risk, nothing to lose, what the hell? The worst we could do was keep working until we’d paid off the rent.

I really enjoyed it. I discovered that customer service was something that was very special if you delivered it properly. That’s the deal. We worked at making sure we had the right product. We would do anything. I would deliver music in the middle of the night. I would take customer orders. People began to know that they could trust us. Debbie would take the orders and then Jeff or I would deliver them in the evening, which was–

BK: unheard of?

BB: We didn’t know it back then, but it was a pretty special service. We were doing it because we wanted the $12 sale so desperately. I started to understand the right service, the right approach, the ways in which you could really endear yourself to lots of customers. It was a country town, so it was easy. There weren’t enough customers, but the ones you had knew you and trusted you.

Then, I did the boldest thing, but it turned out to be very successful. I figured that we were really good at what we did and we’d learned a lot, but it was the location that was wrong – both the town and the location of the store. I saw a music store for sale in Parkmore, Keysborough, which was a proper shopping centre in the suburbs of Dandenong in Victoria. I walked into the store and there, smoking away with his silly cat was a bored retailer. He owned the store but had lost total interest. It was dirty, grungy, smelly and unstocked. The guy had lost the love of what it was about. He’d lost the love of music. He’d lost the love of serving people. He was a classic story of, ‘you’re interrupting me and I hate you all. The reason I’m failing is because you’re all too hard on price. You don’t buy enough.’

So we bought that store. It was a big decision. We were losing money like no tomorrow. I needed to keep working to fund the losses on the store we already had and here I was making a decision to buy another one, leave my piecework and work full-time in the record store. But again, I was twenty-one and didn’t have a lot to lose. So, that’s what we did. That store was turning over $2 000a week when we bought it, which was terrible. Six months later, we were doing $15 000 a week. I still have that graph somewhere. I graphed it every week.

BK: What did you pay for the store?

BB: I wish I could tell you. I just cannot remember. Whatever we paid, it was a great decision.

BK: I’m wondering how long it took to pay back?

BB: I remember back then I thought, ‘If I could make $20 000, life would be wonderful. My own business and $20 000! I remember, once we built that store up, in that year, I made $80 000.

BK: How much was a house worth at that time?

BB: To buy a house back then, thirty-two years ago, about $80 000.

BK: That’s a huge achievement, earning enough to buy a house in the town you’ve grown up in, in a couple of years.

BB: Can you imagine? I’m a country boy. I’m as excited as. But, forget the money for the moment, we achieved that by paying attention to the customers. That’s all I’ve ever done. It’s, ‘What do they need? What do they want? What are they likely to want? How can I get it? How can I stay in stock?’ It was pretty simple in principle. ‘How do I start employing a couple of people? How do I get them to pay attention to the customers?’

In those days, it was simple. Look them in the eye, walk up to them, and say,‘Hi!’ I had such a ball working in that store. During the day I’d work on my own and, if I needed to go to the toilet, I had such good relationships with customers that they would walk in and I’d say, ‘Hey! Nice to see you again. Would you mind the store while I dash off to the toilet?’ I think about the things that I did back then, it was–

BK: Crazy.

BB: But it was great fun. That’s the sort of rapport I had. I was working very hard, but it didn’t feel like work. As a matter of fact, from then on, it’s never really been work, to be honest. It’s never really been work for me. I actually enjoy most of it.So that was the second store.

‘I really enjoyed it. I discovered that customer service was somethingthat was very special if you delivered it properly.’

BK: Did it start to pay out some of the problems in the first store or was it supporting it?

BB: It was supporting it. It was a three-year lease that we took on that Pakenham store and the day the lease came around–

BK: Gone?

BB: Gone. It never made a cent. To put it in perspective, back then, 7-inch singles were $1.99. I remember ringing Debbie one night and asking, ‘How did we go today?’ and she said, ‘We’re going well.’ The total takings for the day were $3.98.That sticks in my mind thirty-two years later. Can you imagine that call? We were in trouble, we weren’t making any money.

But it was true, it was a bad location. It’s laughable. Those one or two stores eventually grew to more than three hundred stores. At our peak, we had Sanity, we had HMV in Australia, we had the Virgin stores in Australia and, essentially, more than one in three records were being bought through one of our stores.And even twenty-five years later, we never, ever, had a store in Pakenham. And Pakenham had grown as a town–

BK: So, it had been marked as never to be forgotten!

BB: Well, no, it wasn’t, because I wouldn’t put one in there. It was just that we were twenty-five years ahead.

BK: There was no market even twenty-five years later?

BB: Yes. Two green guys out of school thought that you’d just open up a store and it would work–

BK: How important is location to retail?

BB: Well, it was my very first, very early lesson – don’t put a store in a town that can’t support it. I put the store in an arcade, which is even worse. Only about three people walked down it every day. But it did teach us a number of good things. Location is very important.

BK: So you’ve taken the step from that one store, you get to the next store.your takings go from $2 000 to $15 000 primarily around service, around interest in the customer.

BB: Back then, it was all about service, paying attention to the customer. We certainly learned a lot more about systems and processes and structures in order to grow, but I’ve never lost those lessons. It’s about the customer – always.

BK: What are the things that you do to know your customer better?

BB: I think there are two parts to that, particularly if we fast-forward to where we are today. One is, you’ve got to stay close to your customer. Now, I have a huge, deep fear that my life that’s become so–

BK: Not average.

BB: Not average. I was born in the country. I’ve always enjoyed people. I enjoy watching people. Wondering what they’re going to do, what they should do, why they do what they do. You’ve got to stay connected with your customers. Today, I still think it’s vitally important. Which is why I think I worry about my life, about moving to a place where I lose touch with what is normal.

We’ve got to make sure we keep pushing that in the business, making sure that little things are done. All the CEOs of all the brands today are required to go and do store visits on a regular, continuous basis. Part of that is to connect with the customer, to connect with the team, to make sure that we’re seeing things where they’re happening, customer touch points.

More and more today, though, it is becoming data-driven. You can actually get a lot of indications when you’ve got hundreds of stores, as we do. There’s a lot of data that gives you trends, gives you directions, what’s happening here, why that is selling, why that isn’t selling. The product teams as well as the operations teams have to pay attention to that. That’s important, and they do.

There is also a part of me still today that enjoys creating new businesses. That’s just, in a bigger sense, in the same vein as creating new product. I like to create new businesses. You know, what are people going to want, what’s happening out there that’s not being delivered that people would want? Some people call that entrepreneurship. I just call it – I’m a retailer. At the end of the day, business is mostly about meeting a need. When that need shifts, you’ve got to shift with it.And that’s really what’s happened.

‘I like to create new businesses. You know, what are people going to want, what’s happening out there that’s not being delivered that people would want?’

BK: How did you build up from two stores to three hundred?

BB: Well, that is a very good question. I got to the fifth store and I was asking myself the same question. I was one stressed-out twenty-four-year-old. I shouldn’t admit that, but I was. I had no formal training in any of this and, all of a sudden, I was trying to figure out how to pay people and how to make sure that I was paying taxes and doing the right thing.

There were a couple of things that I did. I remember the most scary thing involved my good friend, Craig Kimberley, now of Just Group, or Just Jeans back then. He was the first guy to really nail the specialist experience. He had about sixty stores and back then, he was just–

BK: The dude!

BB: He was the king. So I did probably one of the smartest things I’ve done, as it turns out. I was flat out running my small little group but I went and got a job at Just Jeans on Thursday nights and Saturday mornings. Back then the stores closed at 1 o’clock on a Saturday, outrageous as that is. So I worked as a casual employee in the Just Jeans store in Doncaster. I got the job specifically to figure out how the hell Craig did what he did. How did he cope with all the problems I had. I wanted to know how to motivate the team, how to train them, how to get the culture and the standards. Actually, I probably didn’t even know what culture was back then. I didn’t know the word ‘culture’. I probably felt what it was, though.

I have to say – and I’ve told Craig this – I was absolutely the number one casual that he’s ever had. I sold like there was no tomorrow. And I loved it. I loved it even more because I didn’t have the pressure of running my own business.I was there to see how they ran their systems, how they ran their cash registers, how they ran their training.

I even snuck into a store managers’ meeting, which frightened the hell out of me. I was a good, honest, country boy and I was sweating. I sat next to someone and I told them, ‘I’m from the Wangaratta store,’ you know, hoping like hell. I had my eye on the door in case I had to bolt. I felt like a criminal, like I was doing something awful.

But I sat in one of those meetings just to see how the national retail manager ran it and how they communicated. I knew we were onto something. I knew that I was capable and I wanted to grow my business more and more. The opportunity sure was there for me to do that. I did that for three to four months.It took fifteen years to tell Craig Kimberley that I had done this sort of covert–

BK: Covert operation.

BB: Yes. I was shitting myself when I told him. It was eating away at me. I saw him at a function one night and I said, ‘I’ve got to tell you something.’

BK: What did he say when you told him?

BB: He laughed and laughed. By that time, we were starting Bras N Things and we were a success story in our own right. Then he started to tell people, ‘I taught Brett Blundy everything he knows and we’re great friends.’ He’s a great guy. We’re good friends.

BK: So, you did your apprenticeship in a Just Jeans store. you’ve got five stores. What happened then?

BB: Even though I wasn’t any good at school and essentially failed, I’ve got a great capacity to want to understand how things work. I’m curious. I’ve always been curious and it doesn’t have to be about retail. It’s just, ‘Take me to a factory.’ I love it. You know, ‘How does that work? How does that get made?’ I enjoyed that and I’ve taught myself to take advantage of that.

That is why things like the YPO (Young Presidents’ Organization) have been so very helpful in my life. Even today, it’s a commitment and a goal of mine to take two weeks off. I go and learn. It can be straight business conferences or the YPOis wonderful for non-business things, but learning just the same. I still do that today because I believe that you never know what you don’t know. You’ve got to keep going forward.

I encourage all my guys. It’s a cultural commitment to continuous improvement. I’ve always been like that. It was part of the Just Jeans thing, thinking, ‘How did somebody else do it?’ or, ‘That’s a good idea. We’ll put that in place.’ So out of that came the training manuals and induction manuals. I started to understand what culture was in terms of excitement and parties and making sure the team were engaged. Fortunately, I was in the record business, so it was pretty easy.

BK: To do a good party.

BB: I started to learn that culture was everything. You needed an excited, motivated, committed team with an attitude that was about ‘we will win’. So you look for those people who are competitive, you look for those people who want to move up and I just got on and started to systemise. I started to look for electronic cash registers–

BK: So the latest technology that you could use to get the best systems in your business.

BB: Just Jeans was very good. They committed way back then to the first AS400, which is now obsolete technology. So really, I found good ideas and put them in place. I would communicate to the team and then run around like a madman, ensuring that what we decided to do got done. That really was how I did it.

The other half of my role was to find the next store. I would simply keep putting all the earnings back into the next store. Wonderful, wonderful experiences, bad experiences too. I was this young guy starting to grow.

I’d come up against something I’d never heard of, like credit limits. They’d say, ‘We don’t trust you,’ and I’d say, ‘What do you mean, you don’t trust me? I’m paying.’

‘You know, it’s not that you haven’t paid your bills, it’s just that you’re growing too fast.’

I wondered, ‘How can I grow too fast?’ I started to hit normal commercial things that I didn’t understand. So that was my next challenge. But I thought,‘Hang on. We’re a good group. We’re running well. We’re profitable.’

BK: We pay our bills. Do the right thing–

BB: Then the business community and the banking industry were all starting to shackle us. It really was a very frustrating time.

‘Don’t tell me it can’t be done. Tell me how I can do it.’

BK: So how did you get through that in terms of building the credibility of the group and understanding how to negotiate with the banks and others?

BB: Well, I worry about answering this question because I was a bit brash back then. I couldn’t understand. I almost didn’t take no for an answer. You know, I’d say, ‘Don’t tell me it can’t be done. Tell me how I can do it.’ But I would have to tell you that it was partly just being tenacious.

I’ll give you a story about the Doncaster store. A music store in the shopping centre had done a runner – they’d just closed up overnight and gone. So I rang up and said, ‘I want to take that store.’ They said, ‘No, we’ve got it earmarked for somebody else.’ So I said, ‘No, you don’t understand.’ This was in the days when in Westfield shopping centres, the centre manager also did the leasing and he lived in the shopping centre. None of that happens now, but that’s the way it was back then, thirty-odd years ago.

So I said, ‘I’ll be there at 7.30 am for half an hour, I’ve got to be back at Parkmore Keysborough to open the store.’ Not thinking that somebody might not want to get up at 7.30 am let alone meet someone at that time I said, ‘I’ll be there.’ I think it was part excitement and enthusiasm, but sure enough, he was there. He tried to tell me again that it wasn’t available but I said, ‘What? No, I’m taking this store.’ And it worked.

BK: That enthusiasm, that level of energy.

BB: Just not taking, ‘No’, for an answer combined with, ‘We’re going to do it.’When I look back on that, probably in part I didn’t realise that people saw that it was going to be OK. When they met me, they could see the dedication and commitment. I was absolutely focused, deadly.

So we got that Doncaster store and I was working there one night when this cocky little sixteen-year-old came in and said, ‘Have you got any jobs?’ I said,‘Sure. What are you doing right now?’ I remember it just like it was yesterday. I put him behind the counter and said, ‘Work here for a couple of hours. Let’s see how you go.’ That was how we interviewed in those days. There are so many laws and restrictions and things now, but that’s such a perfect way.

BK: Like a work test.

BB: Yes. He did a good job so I said, ‘You did an excellent job – you’ve got the gift, Daniel. You’re on.’ He was sixteen at the time and I could see that he was going to be a great retailer. I could see he was going to be a great leader. So I said, ‘What are you going to do?’ He said, ‘I’m going to go to university.’ I asked him why he was going to uni and he said, ‘Oh, because my dad says I should.’ I said, ‘I reckon you’d love to manage a store.’ He wasn’t even eighteen at that stage.

We’ve since become great friends of the whole family, but at the time, I said,‘Daniel, would you ask your dad if I could come out and visit you one night?’ His dad said yes, so there I was, aged twenty-two or twenty-three, and I’ve got all of five shops. I said to his father, ‘Your boy’s got a great career ahead of him, he’s going to go places.’ We drank some homemade vino and the next day, I rang up Daniel. ‘How did I go?’ He said, ‘We’re right. Full-time. When do you want me to start?’ He didn’t like school, he didn’t want to keep going.

Daniel ended up running the entire music group, Sanity, and retired at the ripe old age of thirty-four with several million dollars in the float, like more than several, a real fortune.

I had lunch with Daniel, his mum and his sisters two weekends ago in Victoria. I ended up employing all his sisters. And he married one of our regional managers. But you can’t retire at thirty-four so he went back to work at thirty-six. He doesn’t work in the group anymore, but he actually retired at age thirty-four. That’s the sort of approach I had back then. We laugh about it now because Daniel’s father says it’s the best decision he ever made. So that gives you a sense of the way in which whatever the issue was, there was a solution.

BK: So, where does your competitive streak come from? The drive? The deadly focus?

BB: To be honest, I don’t know the answer to that. You’re not the first person to ask me. My father was a hardworking, determined, wonderful, wonderful man. He died five years ago. My mother was really quite ambitious. I think it’s a combination of both those things, probably. But it’s hard to know. I’ve got four brothers and sisters.

BK: All different?

BB: We’re all different, but what I will tell you is that we grew up in a very loving, close, country family. I think that was very important in giving me the confidence and the self-esteem.

BK: So it was a get-up-early kind of family life in the country?

BB: Oh, my father would be banging pots in the kitchen at bloody 5.30 am. You know, ‘You get out of bed, life’s for working, let’s go.’ He was a hardworking guy.He had his own farm. It wasn’t a big business. It was himself and his kids as cheap workers – surely the classic story.

There were a mixture of influences, but I had the confidence to do it. But when I said, ‘I’m off!’ they told me, ‘Don’t do it.’ I mean, I had to defy every bit of advice that was coming at me from people who cared about me. ‘You’re lunatic!’ they said. I look back and think, ‘They were pretty right.’ I had no formal training. I didn’t know a thing about retail. There was just no reason in the world that it should’ve worked. But here we are today.

‘We grew up in a very loving, close, country family. I think that was very important in giving me the confidence and the self-esteem.’

BK: When you reached eight stores, you and your partner went your separate ways. Did he take those stores?

BB: Yes. I had a 50% partner. We did a deal. He bought those stores. That’s when I really started. I thought, ‘What do I do now? I really love this retail thing.’ I was without a doubt keen to keep going. And it really was a desperate need to keep going. So I looked around. Really, it was probably the first time that I thought,‘What’s the next thing? What’s going to be the next big thing? What’s not being catered for at the moment?’

I’ll tell you a very quick story. It happened about three months before we parted ways. We had a very fashionable store manager at the time and one night, she’s down there filing and her top’s gone, just like that. This is back in the day when bra straps weren’t to be seen. Now, of course, they’re fashion statements.But I looked down and she has a bra on with a strap that’s busted. It’s come apart like spaghetti. And she’s got this full-size nappy pin holding it together.

At the end of the night, I said to her, ‘What’s with that safety pin?’ And she said,‘Oh, nobody ever sees it.’ And she was a fashionable girl. That was the moment that really focused me on lingerie. I thought, that’s going to change. Bras back then were basic beige and boring. That’s what they were. I just thought, ‘They are going to be colourful. Fabrics are going to change. Women are going to care about their lingerie the same way as they care about their shoes or handbags.’

Then, three months later, I found myself looking for the next business opportunity. So I went and decided that it was lingerie. I thought that would be worth looking into. Essentially, that’s what I started. I bought a franchise store of The Bra Shop in Victoria. I asked my sister and my girlfriend at the time to work it, because back then it was entirely taboo for a guy to be in a store like that, so I couldn’t work the store. Then we started slowly to see if I could stay ahead of the trend of what lingerie was going to do. That wasn’t easy because everything was branded. A rep came in to see you and you placed an order. It was very slow and cumbersome, but it was the way it was.

‘I just thought, “Women are going to care about their lingerie the same way as they care about their shoes or handbags.”’

This is a true story. I figured we needed to sell G-strings. I was so nervous. Back then, you only bought G-strings if you were either a stripper, a dealer or a hooker or something. I remember ringing up my mother and saying, ‘Can you take me into one of these stores? Will you come with me?’ I’m a country boy. I couldn’t go into a store like that on my own and I owned a lingerie store! Anyway, she went with me and it was hilarious. When I think about how the world has changed …

I thought girls would really like G-strings, but I couldn’t get anyone to make them. Leotards were big, then and I was manufacturing the G-string leotards that the girls seemed to wear, but that was with the leggings. The bit that was cut out in the bum was wastage. So I said to the guy, ‘You’re just throwing that out.If I gave you a pattern, would you make me a G-string out of this stretch lycra?’

He made up fifteen of them. I’m not exaggerating, he made me up fifteen and I took them into the Chirnside store to see how they would go. I knew they were going to be good, because back then the fashion was tight and pant lines were not a good look. I knew that that would also appeal from other angles as well, you know, looking good for boyfriends and so on. So I rang up at the end of the day and said, ‘How did we go with those G-strings?’ and they said, ‘Sold out.’

BK: Cool.

BB: Gone. I was like, ‘What do you mean, sold out?’ I expected a couple to be sold but they all went in the day. It didn’t take long to figure that’s what our customers want. So we started manufacturing our own. That was very hard to do as I had one store, then I had another and then I had three. It probably took us five or seven years before the mainstream brands brought out a matching G-string and matching briefs. So I’m counting it as a long part of the story, but it gives you a sense of being aware of what’s going to happen and trying to anticipate that.Also, you’re going to break down barriers of what exists.

BK: When you had those three stores, were they all franchise group stores?

BB: They were. Then what happened was, Bryan Luca was his name, he had about twenty stores. He said, ‘Brett, you’re annoying me. You’re worrying me. You’re too ambitious.’ I was starting to get a bit boisterous about what we ought to be doing. So he said, ‘I’ve got four stores in New South Wales called Bras N Things and they’re not going too well.’ He said, ‘Would you go up there and have a look?If you want them, you can have them.’

So I saw them and thought, ‘These stores are fantastic but they’re not being run well enough. We can do a better job.’ I said, ‘Right, we’ll take them.’ He said,‘You take my four. I’ll take your three. I’ll do it on one condition. You never come back to Victoria.’ And that was the deal.

Now, Brett, absolute truth, we didn’t sign a contract. We didn’t even think about the leases associated with it and we didn’t stocktake, nothing. I loaded up the truck and moved to Sydney. We swapped the stores, all done, not a problem.The first thing I knew of a problem was when AMP rang me up at Macquarie, which was one of the stores we took and said, ‘We’ve noticed that cheques are coming from somewhere else. You can’t do that.’ They’d twigged to the fact that it was a new owner.

Centre management called me in to discuss the fact that I hadn’t signed the lease – this was six months later. I was happy to sign the lease but they said, ‘We don’t know who you are. We don’t trust you. You’ve got no credit history.’ All that stuff. So I told him about Sanity and blah, blah, blah. He lectured me about the length of the lease and said, ‘Do you know that it’s not just seventy grand a year, it’s five years.’ I smiled at him and thought, ‘Of course, I know that, you idiot.’ But I didn’t say that, of course. He was trying to stomp his ground. I listened, of course, but to cut a long story short, all that finished and we left Victoria alone.We then started in South Australia then Queensland.

BK: you’ve done the whole country at this point but you haven’t touched Victoria. What happened with Victoria? How many stores did you have before you went back to Bryan in Victoria?

BB: We would have had about fifty or sixty stores when Bryan rang me up, we would speak from time to time. We even continued to buy some things together, so there was a healthy relationship. He said, ‘Brett, I don’t know what you’re doing or how you’re doing it, but everyone’s talking about you. You’re clearly successful.You’re doing something right. I’ve got six stores. Would you like to buy them?’And I said, ‘Sure.’

So we worked out a deal on those six stores. He had about twenty or twenty-four stores at the time, I can’t remember exactly. It doesn’t matter. So I said, ‘Bryan, there’s only one problem. I promised you I’d never come back, but I’m going to come back and I don’t want to have just six stores.’ Then he said, ‘I’ll cut you another deal. You can go to any centre that we’re not in.’

I thought I would get up to a dozen stores or something, that was OK. So we did that, we started to open a few more stores in Victoria. A year later, he said, ‘I’ve got another six for you.’ So I bought them. And then, a year later, he’s got another.And so over time, essentially, we bought all the stores from Bryan. I can tell you again, we never did a contract.

BK: But you did sign the leases this time?

BB: We did learn a few things. By then, I had a bit of a structure so we wrote to people. It didn’t matter then, because by that time I had the credibility. The landlords were all in favour of us taking over. There weren’t any issues. So, that was essentially the Bras N Things story. Tracking back from that, somewhere in-between all that, was Jeff, who took control of the music stores–

BK: Eight at that time?

BB: About eight, but they got into trouble. I remember this number because it was a great number. When I sold that business it was valued at a million dollars.So, I got essentially $600 000 because I had 60% at that time. Then, three years later, we bought it back from the bank.

‘I learned that if you’re not involved in the business, it’s not good. In specialty retail, you’ve got to have great standards and discipline, great controls.’

BK: How much did you pay?

BB: I shouldn’t say, but it wasn’t anywhere near what I got for it, because it was essentially a bit broken. That was another very important lesson for me. There were a number of lessons.

BK: What were the lessons out of that? Don’t have partners?

BB: That was a really important lesson. No partners makes life easier, in my view.I’ve got to qualify that because I’ve got partners right now, but each partner has to bring something different. In any event, even with partners, there can only be one boss. So, that’s a hard and fast rule for me. One captain of one ship.

I learned that if you’re not involved in the business, it’s not good. In specialty retail, you’ve got to have great standards and discipline, great controls. Every store has to behave in the same way. You can’t call yourself a group if every store is ranging something differently or serving customers in a different way or has a different process.

BK: What the brand promise is, ultimately.

BB: Brand promise is gone. What people know from one store to the other is gone. Systems and processes, the back end of the engine in terms of data integrity, payment of bills, processing–

BK: And then, dropping your costs through scale, you get none of the benefit.

BB: None of that benefit. In specialist retail, you have to ensure the brand promise because there are so many people, far and wide. We’ve got stores from as far away as Siberia (Russia) all the way down to Burnie in Tasmania. It’s about empowerment through standards and disciplines and a culture. So, all of that has to be the same.

That means, if we’re going to set up a new event, and it’s going to happen at 3 o’clock on Tuesday, it has to happen in all stores, at the same time, delivering the same message. Otherwise, you can’t control hundreds or thousands of stores.Retailing is a fabulous business when it all works. It’s disaster when it doesn’t.

You learn most lessons from mistakes. I was fortunate to watch this mistake happening so I didn’t have to pay for the lesson. I had instinctively already figured out that systems and processes are about being very disciplined but letting people operate within that discipline in their own way so they can contribute and make a difference. That was a very important lesson. The other one was not to take on too much debt, because that was also part of the failing.

BK: So taking on debt to buy you out?

BB: Yes.

BK: Roughly how many Bras N Things stores did you have when you got the eight back?

BB: I probably only had about thirty or forty at that stage.

BK: So now you’ve got two businesses to run?

BB: Two businesses and I had moved to Sydney.

BK: How did you make that happen? Was it through your mate, Daniel?

BB: Yes. He was still working in music. It was called Jets.

BK: And he became the guy who ran the eight stores?

BB: Exactly. I grabbed hold of Daniel, who I had always seen as a talent and said,‘Why is this great business that I left now broke?’ And he knew exactly the reason why. He said, ‘Well, all the things that you had, they changed.’ And I said, ‘So, how much money have you got?’ He said, ‘$23 000.’ I said, ‘You whack the $23 000 in.We’ll go buy this.’ I can’t remember what percentage that equated to, but when we floated, he had about 3%. I think he might have had 18% before that?

BK: About 18% when it started?

BB: When we started, that $23 000.

BK: And then, what was the float value, roughly?

BB: A hundred million.

BK: What year was that?

BB: 1997. And we did this in about 1992. So, terrific run. Essentially, we kept it in Melbourne, I was Sydney. Daniel and I spent almost every day of our lives talking to each other on the phone, sometimes ten times a day.

BK: What have been the greatest challenges for you? Most people have identified finding and keeping good people?

BB: Sure it is.

BK: So, you know Daniel is the right guy. He’s ambitious. He’s got the right character. you give him an opportunity to buy in and you know that he fundamentally respects you and agrees on those foundational principles that you think would make it successful. Even though you’re not there, you can ticktack in and it’s as good as being there.

BB: It’s as good as being there. We had a terrific relationship. He absolutely honoured the principles and the culture in the way that I understood it –customer first and the need to create energy through our culture, standards and disciplines. That was very important. The second thing was we liked each other.I have always had the privilege, as an owner, of working with people that I like.

We had a good relationship. He was the sort of guy that when he was stuck on a decision, he’d pick up the phone and say, ‘What do you think we should do here?’ And we’d talk about it. Then he’d go off and make the decision. Now, I’m always very involved and I certainly was back then. So, it wasn’t that I wasn’t playing the director role. We would talk regularly and I’d be a part of that. But fundamentally, I was putting most of my effort into Bras N Things.

BK: And before you got out of that business, he’d done about fifteen years with you?

BB: Yes, probably at least fifteen because he started when he was sixteen, remember? Other great leaders came out of that era also – Greg Milne, Shane Fallscheer and my sister, Tracey Blundy.

BK: How do you find them?

BB: We focused on succession planning. It wasn’t even something that I thought was some great business idea. When you’re growing retail fast or growing any business fast, you’ve always got a demand for people so it’s forcing you to think about it. It’s forcing you to watch people. It’s forcing you to give people a go.

Back then, I was young I didn’t have a problem with making someone who was twenty-one a regional manager if they had the right attitude. I think, in lots of ways, we’ve lost a bit of that as we’ve all got older. The organisation’s got older.I’ve got older. The leadership’s got older. We forget that twenty-one-year-olds can do the job. Not all of them, but some of them. We shouldn’t look at someone and say, ‘You’re too green.’ If I had done that twenty-five years ago, we wouldn’t have many of the senior leaders we do at the moment. I’m a huge fan of youth and energy. And retail is not difficult. It’s just demanding.

BK: That’s a really good line.

BB: It’s true. As a result of that, you’re looking for people that have good attitude, that can commit and work hard.

‘I’m a huge fan of youth and energy. And retail is not difficult. It’s just demanding.‘

BK: And work through the obstacles?

BB: And you can have a stellar career at an early age in retail. We’re always behind.Having said all that, we haven’t got enough people. And as we go around the world, it’s the same thing, trying to find quality executives. Because now, it’s not just, ‘Oh, we might send you to Western Australia if you’re keen.’ Now, we might send them to Russia or China or South Africa or Brazil and that’s another obstacle.So it takes an even more unique person. So, again, if you’re keen and ready, you’ve got a head start.

BK: Tell me the story of diva. I find it interesting that here you are, a bloke from country Victoria who goes into bras at twenty-odd, and then you get into diva.

BB: It’s a fast fashion girls’ jewellery. Well, girls are great shoppers. That’s the key.

BK: How many diva stores are there globally now?

BB: About seven hundred.

BK: And how many countries are you in?

BB: Twenty-two.

BK: How did you get started in this business?

BB: OK. I’ve probably touched on a couple of things related to what was driving me in regards to Bras N Things but along the way, I’ve missed so much in the story. Brett, at one stage, we had a hundred and ten Sanity stores in the UK.So I was having the joy of flying over to the UK every month and spending a week there. While I was over there, I noticed this spectacular jewellery, costume jewellery. I looked at it and thought, ‘This is £3. Just look at this stuff.’

It was just mulling around in my mind as, ‘That’s the next thing’. I wanted to deliver quality stuff that women were going to wear once at $9.95. Or you could wear a different pair of earrings every day to work. It was fast fashion, disposable fashion. And vertical was very important to me.

Bras N Things had started to shift aggressively into vertical, which means we weren’t buying brands anymore. We were going direct to the factories, designing, creating our own stuff, and bringing it in. Essentially removing the middleman, making everything faster and more dynamic. Customers loved it. This was going around my head when I was doing store visits as I do every Thursday night. I was walking down to a Sanity store in the Imperial Arcade in Sydney when I saw a store called diva. And that was it. Someone was doing exactly what was in my head.

I loved the look of the store and the product that was in it. I rarely talked to Vanessa, my wife, about business, but I went home that night and said, ‘I’ve just seen this great store that’s exactly what I was thinking we ought to do. diva, in the Imperial Arcade.’ And she said, ‘That’s my boss.’ She was working for ‘3’, as in ‘3’ Technologies, phones. She was in charge of the rollout. Anyway, she said,‘I’ve been meaning to talk to you about that. They want me to come and be a part of it. Not just as an employee, but as a part of it.’ I thought, ‘That’s interesting, what are they planning on doing?’

To cut a long story short, we had dinner with Mark and Colette Hayman. They were going to franchise the concept when I suggested I’d fund it, help them with the funding and the strategy. That was the start of diva. So I ended up with a third. Vanessa ended up with three and a third percent.

Vanessa and Colette got on and started rolling stores out. Colette took care of the product, Vanessa ran operations. It was a fantastic success. And a few years on, Mark and Colette came to me and said, ‘We’re done. Do you want to buy it?’I said, ‘Sure,’ and that’s what happened. So I bought it all and then we pushed it around the world.

There are two things that are very important to diva and now Lovisa. Two years ago, we created Lovisa as sort of a more Sex and the City version of diva, which is more appealing to a different stage of life. But diva has always appealed to me because it’s global – and I believe retail is going to be more and more global – and because we’re totally in charge of the entire supply chain.

BK: So you design the products, manufacture the products and ship them directly into your stores globally?

BB: We do it by air, so it’s very fast. It’s a very global business because we don’t have to worry too much about localised needs. The more global the world becomes, fashion just becomes more and more the same. Essentially, that is why diva and Lovisa are global-growth businesses whereas my other businesses are still predominantly Australian. We’re very proud of diva. We’re very proud of Lovisa. We’re proud of all the brands.

BK: Now, tell me, you’ve said you wanted to have a national business for no particular reason. Is this what happened with diva? Did you say, ‘Wouldn’t it be great to have a global business?’ I guess what I’m getting at is, was it driven not just by economics, but more by a challenge?

BB: There’s no question. Sometimes it’s hard to say this without it sounding sort of cute or arrogant, but sometimes you wonder, ‘Wouldn’t it be good if we could do that?’ Absolutely, that comes from a drive to want to do more and be better– continuous improvement. It comes from a sense of, ‘Let’s break the mould. Let’s do things that haven’t been done before.’

There are two parts. One is that it’s just a part of my nature, probably. But two is it’s also proven to be successful because you’ve always got to be breaking the mould. You’ve always got to be moving forward.

BK: These are not businesses that you can just sit down and say, ‘That’s done.We’ll just let the cash start rolling in.’

BB: I’m not sure there’s any business you can do that to. So I think it’s a business necessity, at least it is for growth, if you want to continue to become more dynamic. But you’ve got to push yourself to improve. You’ve got to make some mistakes to learn from them, but hopefully not too many. So I think there’s a nice combination of it being a sensible thing to do from a strategic point of view. It’s also important to do something that keeps you fresh and current and moving forward.’

BK: And good to retain your best people by challenging them.

BB: I think that’s the nature of our organisation. I’m not sure that that would be true for everybody, but there’s no question that if you’re a leader in BB Retail Capital, you know that there are no easy days. You’ve got to keep going. Not everybody likes that culture because it is continuous improvement. If something can be done better, then it’s going to be done better. It’s not, ‘Oh, it’s OK,’ or, ‘Our result is good.’ It really is about whatever we’re doing now, we’re going to do better next year. And that can be a bit relentless to some. I don’t see it that way.

‘You’ve got to push yourself to improve … It’s important to do something that keeps you fresh and current and moving forward.‘

BK: Also, do you find that you attract people that are attracted to that mindset, to those values?

BB: I think cultures are a wonderful thing because when you step into a culture, culture helps you define whether you’re going to like it or not. And not everybody has to like it. That’s the important thing. It shouldn’t be forced. But it is one that says we will look after our customers no matter what. We will continuously improve, no matter what. Our cost of doing business will go down every year, no matter what. They also happen to be very sensible and appropriate business philosophies, too.

BK: yes. How much of that is conscious in terms of you sitting down and thinking that through and writing it down? How much of that is from the cut and thrust of day-to-day working out, that it’s just necessary to get your costs under control and keep them going down in order to stay competitive?

BB: Easy answer, Brett, and there are two parts to it. In the early days, it was just a necessity. The best thing I ever did was come up with a back-of-the-envelope, napkin-type solution, but there was thinking going on. Now, there is no question with the group the size that it is, that I and others think about it, we launch projects, we have a university every year to bring two hundred and fifty executives from around the world in and we launch programs that are designed to continuously foster that thinking. So, there’s no doubt, as we’ve got bigger, it’s become purposeful. It’s been thought about. But in the early days, it was just,‘Hang on. How do we do that better?’

BK: Tell me about your training. How much training do you do, is there an induction? Has there been a big dollar commitment to your annual university?

BB: I’m certain that we overspend in terms of how others would do this but again, there are two parts. It’s very important now, but I’ve always wanted to learn and I just expect everybody else should, too. It was a bit of a shock to me that people don’t always want to. So I force my guys to read books. But there is no question that it’s important.

You asked me about our weaknesses at the moment, and we are not good enough at training all our team. Retail is a high-churn industry so we’ve constantly got to be teaching and training on both the cultural stuff as well as how to do the job. And we don’t do it well enough. We’ve just introduced some new software last year that I am hoping will make a real difference. It’s called World Manager and I love it. I think it’s a game changer for retail because it allows us to track and be more interactive with our training in a systemised way. Essentially, that’s what it does.

BK: Doing more, more consistent and controlled.

BB: Yes, however change is difficult for organisations and we’ve got eight thousand people. Humans like to get into a rhythm. Rhythm is very important for business. But when it comes to change, you’ve actually got to get the team out of their rhythm. So, it’s hard.

BK: What’s the role of planning? Does it involve retirement?

BB: There’s always a plan. But I have to tell you, I’m not one of those guys who plans more than five years ahead. I’ll have a view of where we’re going but I won’t have a hard and fast plan that goes beyond five years, because I have never been able to see a plan that’s set that far ahead. Certainly, for the businesses that we operate, I’d prefer to have a view of where we’re going and then be flexible, probably a bit of that entrepreneurialism that allows for, ‘Hang on …’

BK: Some flexibility.

BB: But in broad sense will I ever retire? Actually I don’t think so. I like what I do.I still work six and seven days a week, which is a bit unnecessary these days.I’m probably slowing down somewhat but I still call myself a retailer. Our homemaker property is a very big business now and separate and standalone and Darren Holland runs that. We’ve just moved into beef, so we’ve got beef, and we’ve got fifty thousand head of cattle up in the Northern Territory.

BK: What’s it called?

BB: The station is called Beetaloo. It’s 2.6 million acres [1 million hectares] so it’s very big. And that is absolutely what it’s about now. If I had a broad sense of, you know, ten years from now, then we’ll have a lot more beef and we’ll be good at beef. And the reason beef–

BK: Do you get support? you grow it and sell it?

BB: I absolutely believe in the export market because I’m an absolute believer in Asia.

BK: A lot of people to feed up there.

BB: The world is progressing. It’s going to need more and more food. Beef is going to be an important part of the growing middle class in all the South-East Asian countries. Protein is very important. And so, I like it. Maybe it’s a little bit of that country boy in me coming back again.

There really are three main areas, but from time to time, good investments come to me. BridgeClimb is a classic example of somebody bringing an idea that just appealed to me. As it turned out, it only appealed to Paul Cave and Brett Blundy and nobody else!

BK: Except a few million people who have now done it!

BB: And that was an eleven-year journey.

BK: To get it approved.

BB: Exactly. So from time to time, those things come along. We’ve got other investments, but that’s essentially the group. We’ll get bigger at retail. We’ll get bigger at retail property. We’ll get bigger at beef. What’s after that, I don’t know.We’ll see where that goes.

BK: What role does money now play?

BB: That’s a great question, Brett.

BK: What is it? What’s it for? How much do you need? How much do you want? People write you up on rich lists and that sort of thing, but what does it actually mean to you?

BB: I think when you go back to the early days, when I started at twenty. I thought twenty grand would be great. Twenty grand, wouldn’t that be wonderful? And then I thought, ‘What if we could have an Australia-wide chain? Wouldn’t that be great?’ Now, we’ve got five and two global chains.

In the early days, of course, money was nice. It’s nice having a nice place to live and a car and holidays, having some of those luxuries. It certainly was a driver for me and I assume a driver for a lot of people.

But you get to a stage where, of course – that’s why it’s such a great question– because I do what I do because I enjoy it, the challenges of it, taking the risks, and so on. And as it turns out, it wasn’t for the money. I’d probably do it anyway.Then it gets to a stage where, of course, I’m very grateful for where I’ve gone, past the money. If I had any sense, I’d listen to some people, I’d retire and I’d be fine.That’s a wonderful feeling.

What I think the biggest thing it does for you, that I really enjoy, is it gives me freedom. And that’s what to me, the wealth that’s been created through this journey is all about. I’ve got the freedom. So, I can actually choose whether I want to work or not. I can choose to be the boss. I can choose what I invest in. That’s a great feeling, too. That’s very important to me.

BK: So, choose who you work with, what you work on, when you work?

BB: All those things. Now, that’s not to say that I don’t have days where I think,

‘Oh crikey, that was bloody hard.’ Or if you have to fire somebody that that’s still a shit thing to do. But in the main, it’s about freedom to be able to determine all those things. That’s the greatest gift I think I’ve got out of that.

Then, in terms of, ‘Why keep going?’, it’s a bit like if something should be done better, then we’re going to do it better. I don’t know if the other guys gave you this answer or not, but that’s what seems to matter to me.

‘I’ll have a view of where we’re going but I won’t have a hard and fast plan that goes beyond five years, because I have never been able to see a plan that’s set that far ahead.’

BK: What’s come out clearly from my interviews has been that people got into something because they loved it. And the more they did it, the better they got at it, the more great feedback they got, they got great experiences, they met better people, blah blah blah. So, they just keep doing it. And then, when you say to them, ‘Well, would you ever stop doing that?’ it’s like, ‘Well, that’s actually who I am. That’s what I like. That’s just who I am more than what I like to do.’ And so they say, ‘I could never stop being myself.’

BB: I think, to some degree, everything you’ve just said there is exactly the way it is. You just keep pushing yourself. You’re doing something new and that newness is actually pretty cool, too.

BK: And you’re hanging around young people who are energetic and want to kick goals.

BB: You see the enthusiasm of those guys. There’s a whole host of things, but there’s so much joy in watching some of the guys that I’ve seen. Peter Bond is a classic example. He started working for us and now he runs Russia. He’s got equity in the Russian territory because I said to him, ‘Get off to Russia and we’ll see whether we can make it in Russia.’ That was five and a half years ago. Now we’ve got two hundred and fifty stores in Russia.

BK: Let me ask you about that. How do you incentivise this group of people– straight cash bonuses, equity, what’s your view?

BB: What I’ve discovered is that they’re very individual, especially at the level that you’re talking about. Everyone’s driven differently. Some people will share the risk with you and therefore would share the reward while others just want the salary and they’ll still do a good job. In Peter’s case, Russia’s not the most desirable place for an Aussie to necessarily want to live and he took his wife, Michelle, and now he’s got two children born in Russia. You’ve got to take that into consideration.

BK: So you just have a conversation with people about what their thing is?

BB: These are very personal considerations. I often say, what do you really want– not what you dream you want. When you ask the question, ‘What do you want to be?’ sometimes, people will tell me things like, ‘I want your job.’ Then, when I press them, I ask, ‘What do you want my job for?’ and they say, ‘Because I want to be rich.’ Then I say, ‘Well, that’s not really the reason.’

BK: you can be rich through lots of things.

BB: Exactly. So, it’s intensely personal to try and find out what the real motivation, the commitment and the real drivers are. In Peter’s case, he was looking to be involved, he wanted to be an owner, he wanted opportunity. He’s a fabulous talent and was willing and able to stand on his own in Russia.

BK: No Russian language?

BB: That’s right. And to me, that deserves everything and more than he has earned. It’s also been the fact that it’s a journey for him as it has been for diva and BBRC. But in a part sense, whatever Peter has, which is terrific, it’s probably not enough because he’s done everything that we would have hoped and more.Then, other people have different drivers. I am a big fan of giving the leadership equity in the business, skin in the game. That’s a hallmark.

‘I’m a big fan of giving the leadership equity in the business, skin in the game. That’s a hallmark.’

BK: Letting them buy in.

BB: Buy in. That’s a hallmark of all the CEOs. So, real skin in the game that they have bought into. And usually it’s compelling, but they’ve still got to commit, and they all do that to varying degrees. That’s partly because we’re a private company so we don’t have share options and things like that. Things aren’t as freely available. But it’s also the way that I like to operate. It also takes quite some time for me. It’s not just about being here for six months and you’ll get that. I’ve really got to know that intimately. It’s easy to be great for twelve months. It’s much harder to–

BK: To sustain that in the long-term. So there’s no retirement. What I was going to ask you about next is, you’ve got your wife, some children?

BB: Sam and Mia, yes, four and two.

BK: Throughout the interviews, one of the big themes has been, what impact does a business, particularly one the size and scale of yours, have on your family life and how do you deal with it?

BB: I’m yet to face those questions, Brett, because they are only young and I’m just starting to experience that. I do find that I have to set time aside. But again, freedom allows me to do that. Take last weekend. We’ve got a possum that’s pooing on our steps so my four-year-old said, ‘Why don’t we build a possum trap?’ I thought it would take one Sunday, but we’re only halfway through.

But those are the things that I’m going to have to start to think about. I had quite a lot of fun building the possum trap that I never thought I would. We went down to Bunnings and figured it out and the damn possum trap’s cost me $600.We could have bought it on eBay and it would have worked better, but we’ll end up catching the possum then we’ll let it go somewhere else – and Sam and I are enjoying the journey. I’ve got the freedom to be able to do this. So, on the one hand, I’m very lucky to have had my business success early.

BK: And the kids later.

BB: I haven’t had to compromise and I don’t think that I’ll have to do that. But you might have to come back in a few years and ask me that question again.

BK: Tell me about the people that have really influenced you in your career.you mentioned Craig Kimberley.

BB: Craig Kimberley, yes.

BK: Who were the others who have really inspired you?

BB: Without knowing it, Craig Kimberley influenced me. I am an absolute Sam Walton of Walmart tragic. As I told you, I was a great learner, and I’ve been to Bentonville, Arkansas, on several occasions. I was fortunate enough in 2006 to spend three full days with every leader of Walmart. Back then, when Lee Scott was the CEO, I had the great fortune to meet Sam Walton. I also spent three hours with the man himself when he came out to Australia, just by pure chance.

The reason that that’s influenced me so much is because Sam Walton built, in my view, the greatest company in the world. It’s certainly the most successful retailer. And even though we’re in a different sector of the market, the principles are the same.

I’ve been a great student of Walmart ever since it was only in five states or something. But he was already on his way. And he just made sense. So for three hours, I was riveted. I was a kid of twenty-six and I just went and put so many of those things into the business. So, he, without a doubt, has been a major influence in many of the ways in which we operate. That’s when I really understood culture. I instinctively knew what was going on but that word culture hadn’t come into my vocabulary back then.

I am a fan of Jack Welch in his sort of candid, direct continuous improvement,‘Be number one’ approach.

BK: yes, bottom 10% of managers leaving every year.

BB: Just in the way to keep it disciplined and focused. That would probably cover the guys that have influenced the business to some degree.

BK: I get that. Now, let me finish by asking you for a motto, a quote, or thought that best summarises your approach to life or business.

BB: I would have to tell you that there are two. I think I probably mentioned one of them, but it’s always about the customer. I’ve mentioned this one already too, but I truly believe that in the continuous learning, continuous improvement is that if something can be done better–

BK: Do it better.

BB: It should be. I say that quite often. The one that I have for the family is that we’re a ‘yes’ family. It’s just that one day, it’s going to get me into trouble.

BK: What’s a ‘yes’ family?

BB: ‘Yes’ means ‘Yes, can do,’ in the sense of no whingeing. Remember, I’ve got a four-year-old and a two-year-old. ‘Could you bring the plate to the table?’ ‘Yes.’So I think ‘yes’ is the answer. Everything ought to be ‘yes’ before it’s ’no‘.

BK: It can be done.

BB: It can be done.

‘… I truly believe in continuous learning, continuous improvement. If something can be done better, do it better.’