BBQ Factory on fastburner

David Houldsworth

Hellaby Holdings is trying to turn around its undercooked stake in the BBQ Factory.

Faced with increased competition from The Warehouse and Mitre 10 - which is selling barbecue hardware - BBQ Factory is expanding into garden furniture and homewear for outdoor living.

It is also moving some outlets at semi-commercial or semi-industrial sites to busier locations such as malls.

Hellaby Holdings owns 16 of the 21 stores and controls the franchise for the other five with owner-operators.

The first of five stores with the new format opened in Christchurch in June and BBQ Factory said September sales there were up 70 per cent on September 2005 at the previous location.

The second new-format store opens in Tauranga this weekend, the first BBQ Factory at a mall next April and two more new format stores later next year.

BBQ Factory intends to introduce the new format to all stores over the following two years.

BBQ Factory is Hellaby Holdings' slowest burning retail operation. It picked up the company from ASB Bank and Roger Richwhite in 2004 after the failed StoreFront float.

This time last year Hellaby managing director David Houldsworth appointed Stephen Spencer chief executive of the BBQ Factory.

Spencer was managing director of Grosvenor Garden Centre and chaired a chain of other centres in Britain and says it is focusing on some of the same product sold by garden centres.

He acknowledges the need for significant change.

"It's not quite a turnaround, but close," he said.

The company aimed to move beyond big hardware products such as barbecues, spa pools and woodburner heaters and be more accessible for consumers. It would retain the BBQ Factory brand, he said.

The changes were limited to five stores initially because of the challenges of finding new stores.

"It is about taking the outlets to where people are," said Spencer.

Houldsworth declined to break down BBQ Factory's financial performance and its impact on Hellaby's retail operations .

Hellaby is budgeting for "modest" ebit growth at BBQ Factory this year while it settles in the strategic shift to the company.

The Hellaby Holdings' annual report said BBQ Factory last year was overstocked, and this had been discounted to clear.

Management information and reporting had been restricted because of an out-of-date IT system which had been replaced at the start of the 2006-2007 financial year.

The report shows Hellaby's retail division did well with a 42.2 per cent increase in turnover for its No 1 Shoe Warehouse chain acquired last year. Same-store sales were up 20.8 per cent.