Fraserlive:Coles cave-in and carve-up

Having first been interested in the philosophical questions over Coles sale, I'm now looking back in anger, but it seems none of my fellow business commentators are with me.

They are absorbed by who is bidding and how much the shares will be worth when the final deal is done. Being a very small Coles shareholder (I bought them ages ago to get the Myer discount card) I'm naturally interested in a financial outcome. But on a broader scale I'm wondering who the hell told the Coles board to run up the white flag. I, for one, was not consulted. I didn't get a chance to vote on the sale of the farm. Rick just mailed me that it was going to happen and he'd see to it that I got a good price.

Let's consider the facts. This multi-sided retailer, the second largest in Australia, was not making a loss. It was guilty, if you can use the word, of a profit forecast downgrade, something we hear from public companies and politicians all the time.

Granted, there were some problems that all retailers battle from time to time. The supermarkets, I'm told, suffer from too much buying power in the hands of too few, with resulting temptations. At the risk of my scrawny neck I'll say no more about that except that it is fixable by sending in a squeaky clean, fearless general manager swinging a recently sharpened samurai sword.

Office works and Harris Technologies are winners and so is Target. In fact, Target has become a benchmark performer in having just right stuff for its value-for-money market. It has also placed a glass floor which Myer dare not go below in terms of value merchandise. Liquorland and the pubs look okay from the outside too, and so does petrol. K Mart is undoubtedly the ugly sister and ought to either be converted into Target stores where appropriate or hit on the head very hard.

Grappling with these problems is what I expect from the Coles board, the keepers of our money. But what to we get? 'Oh bother, we have hit a profit speed hump and the logical solution is to sell up. Boo-hoo. If John and Rick don't feel up to fixing it, get in people who do.

It's still not too late. The fat lady still hasn't sung.

Freelance
For some reason fate has lately led me among the freelance service providers of our industry. You may recall I wrote about a freelance patternmaker and how-to advisor, and a freelance teacher of moulage and business strategy. Now I've uncovered a freelance designer/product developer in menswear. He's Brian Allured, a once-was-American, who worked for Trent for nine years before striking out on his own in 1999. Brian works from home handily located in Surry Hills. From the top down he can design a range of men's clothes, check samples, produce style sheets and, if you want him to, source factories in China, Korea, Taiwan or India. He's a real gears man and his fees begin around $65 an hour, depending upon the work he's called upon to do.

Brian's company is Design & Fashion Services Pty Ltd. He gets most of his work from small retail groups who want to develop imports but don't have the time or know-how. Small manufacturers use him sometimes, too.

While Brian's story is interesting in itself, it illustrates the broader fragmentation of the industry and how it is now possible to outsource virtually every function. Thus: After your freelance designer has bought fabric samples, created the right styles for the market you've selected and used a freelance patternmaker on your behalf, he delivers your samples to your selling agents. When the orders come in, your freelance product developer orders the fabric which he arranges to be delivered to an overseas factory you've probably never seen. When the garments are made and quality checked by an independent inspection service your customs agent When you think about it, if you can find a way to outsource yourself you don't need to be there at all. You can cease to exist, and if you don't exist, then when you can go muhulla you don't have attend your creditors' meeting.