A Statement from Tom regarding Eagle Boys
collapse in 2016
Tom Potter – Founder of Eagle Boys
Retail is a simple thing. I believe you must give the customers what they want, when they want it at a competitive price and keep your promise!
Tom Potter Founder of Eagle Boys
Recently I spoke at a Sydney conference and upon entering the room a CEO asked, “What’s happened to Eagle Boys Tom?
It was a question I was dreading but was also fully expecting after the company I founded in 1987 and sold in 2007 went into voluntary administration in July of 2016.
When I sold the company nine years ago, after building it up over 20 years from a single store to Australia and New Zealand’s largest privately owned pizza company, I had no reason to believe the new owners wouldn’t take the business, with my proven business formula, from strength to strength. I embarked on new pursuits fully believing the company would continue to thrive under new leadership.
As played out in the headlines, this was not to be.
With new eyes and substantial capital the new owners did steer the company on a course of rapid growth, opening many new stores in their first two years at the helm. However, even from my distant viewpoint, it’s apparent to me that many of my ‘winning systems and formulas’ that had served the company so well for 20 years, were greatly altered and restructured by the new management team.
By doing this, I believe, they built a house of straw on sand.
The tough resilience and fortitude of the franchisees enabled the company to continue on for as long as it did – right up until July when the owners, NBC capital, were faced with no option but to place the company into voluntary administration.
So what happened?
Retail is a simple thing. I believe you must give the customers what they want, when they want it at a competitive price and keep your promise!
However, the sweeping changes introduced by the new CEO backed by the owners, NBC capital, strayed from this tried and true principle in the following ways:
• Pricing increased beyond what the market would accept and at the same time became unnecessarily complicated.
• The positioning of the once simple, yet strong brand was changed in a misguided attempt to capture the gourmet pizza market.
• Strategic alliances with long term and much valued suppliers were broken.
• Removing the “2 minute pizza guarantee” (a substantial point of difference) and getting rid of the drive thru option were grave errors, in my opinion.
• The spend on advertising and marketing was reduced and messaging underwent continual and confusing changes.
• Every senior long term manager who was involved in the buyout was removed from the company.
• A revolving door policy for staff and suppliers and ultimately franchisees, always leads to disaster.
I do not believe tough competition was the reason for the down fall. Throughout its first 20 years, Eagle Boys always faced tough competition. After all, Pizza Hut and Dominos are not new kids on the block. However, under my tutelage, the company always competed well in what was often a ‘white knuckle’ industry.
Tom Potter – Founder of Eagle Boys