Business stories of interest this week

Business stories from the past week, compiled by Jason Maywald:

1) Why businesses must stay agile to survive

Remember when Toys ‘R’ Us first launched into Australia? It was massive news. The American giant was set to disrupt the toy retailing sector forever.

Last week the Australian arm of the disrupter, despite a 20 per cent market share, was placed into administration … a victim of the new wave of disrupters.

While demand for toys and games remains high, consumers have moved online or to discount department stores.

Toy and game retailers have long been warned that being a simple shop for toys would not be enough to compete, and Toys ‘R’ Us was not able to adapt fast enough to changing market conditions.

It’s just the latest example for investors of how they need to stress test their share portfolio from the threat of disruption and the ability of individual companies to continually reinvent themselves to fight the threats.


2) Lyon Group, JERA, Fluence launch blockbuster grid battery alliance

Solar battery farm developer Lyon Group is joining forces with JERA – a joint venture of the giant Japanese power utilities Tokyo Electric Power and Chubu Electric Power – and Siemens and AES Company’s Fluence partnership in a blockbuster alliance that aims to step up the rollout of grid batteries in the Asia Pacific.

The alliance gives Brisbane-based Lyon some world-class backing: TEPCO and Chubu have a combined $113 billion of revenue, Siemens has a 170-year heritage as one of the pioneers of global power engineering and AES has 11-years experience leading the global deployment of grid scale batteries.


3) Embattled Retail Food Group appoints new CEO

The head of embattled cafe and pizza outlet owner Retail Food Group, Andre Nell, has been replaced by the man overseeing the company’s business-wide review.

RFG, the owner of Gloria Jean’s, Donut King and Crust Pizza, said Richard Hinson, who joined the company in January to lead a strategic review triggered by problems within its franchise network, had been promoted to group chief executive.

Managing director Mr Nell would leave the company on Tuesday, RFG said.

RFG was hit with a string of accusations late last year from former and current franchisees that they had been run them into the ground with exorbitant fees, including high marketing and food costs, poor quality food and a lack of support.


4) Free delivery on online shopping

Regional Australians and people living in outer suburbs are the nation’s most prolific users of online marketplaces.

New data from also explodes the myth that Australians use it mainly to buy and sell second-hand goods, and unveils the number one pet hate of online shoppers — delivery costs.

It found five of the 10 busiest online shopping postcodes in the past year are in country areas, and each state’s most active online shoppers live far from CBDs.

The managing director of eBay Australia and New Zealand, Tim MacKinnon, said many areas outside cities did not have large shopping malls, so the only way for people to access major retailers was online.


5) ASIC should investigate failed super mergers: Productivity commission 

Some mergers of super funds have failed because board directors wanted to look after their own seats, rather than acting in their members’ best interests, the Productivity Commission has found.

The commission also recommended in a draft report into superannuation that the Australian Securities and Investments Commission should “proactively investigate” questionable cases where mergers between super funds stalled or did not proceed.

The commission’s draft report says that while “little is known about mergers that have been broached but not completed. Yet anecdotes abound of mergers not proceeding for reasons disparate to members’ interests”.

The fact about half of all APRA-regulated funds have less than $1 billion in assets raises questions of why there have not been more fund mergers, and the commission said some directors may be reluctant to allow mergers that would see them losing.