Gazal defends Bisley closure

MELBOURNE: Gazal has moved to dispel accusations it is closing its Melbourne corporate apparel operation due to failing profits since it acquired the business.

The wholesaler has confirmed it will close the Melbourne offices of Bisley Corporate, previously known as Coronet (which specialised in uniforms for the hospitality industry) two years after purchasing the business from Jamieson Fashion Group.

An industry source, who declined to be named, attributed the closure to a "lack of clear strategy" on the part of the wholesaler. The acquisition had been unsuccessful and the Coronet business - originally employing more than 50 staff with a $10 million turnover - had "slowly been eroded away" since Gazal had not understood the intricacies of the acquired business, the source said.

However Gazal chief operating officer and Men's Group manager Craig Barnett refuted the claim, describing the move as a deliberate tactic.

"Recently we've won a number of major corporate clients including New South Wales Health, St George's Bank, BP, Subway and Bakers Delight and we've taken the decision to exit the small hospitality market, which is what Coronet was known for."

Gazal had acquired Coronet as a base from which to grow its corporate apparel business, Barnett said.
"The reality is that when you buy a business the fit is not always going to be perfect. The hospitality part of Coronet never really appealed to us."

The move would result in redundancies for 20 out of around 27 Melbourne Bisley Corporate employees, although efforts would be made to redeploy some staff to Gazal's Melbourne headquarters in Collingwood.

Meanwhile Gazal planned to recruit around 15 new personnel to its corporate wear operation in Sydney. Gazal's Sydney based schoolwear company Midford - one of Australia's largest - would form the basis for the growth of Gazal's corporate wear business.

"The only way to leverage the synergies in our corporatewear business is by bringing the whole operation to Sydney," Barnett said. It is understood closure of Bisley Corporate's Melbourne operation will be complete by the end of the current financial year.

By Belinda Smart