Rod Duke’s Kathmandu bid is the laid-back billionaire’s second attempt

AFR 16TH JULY 2015  Rod Duke Briscoe Group MD and major shareholder photo by Louise Kennerley afr

Rod Duke says he didn’t mean to ruin the new Kathmandu Holdings chief executive’s first week in the job. But that’s business, and he has an empire to build.

“I’m very sorry for the new fellow. He was there for two days and copped this. You wouldn’t do that to anyone. It just so happens that it took us that long to get the stuff together,” says Duke, the New Zealand entrepreneur who launched a “bolshie” takeover bid for Kathmandu the day after its new boss started in the top job.

“Sometimes it is coincidence. It takes you that long to get your ducks in a row.

“It is hard to get your act together over Christmas when you are running around like a billy-goat in our line of business.”

This is pure Duke. Straight-talking, engaging and surprisingly open for a man worth more than $400 million, 27 years living across the Tasman has not tempered the Australian twang of the Adelaide-born entrepreneur who crossed the ditch to build a homewares empire which made him one of New Zealand’s richest men.

Duke’s language is peppered with slang rarely heard in the modern board-room: “busy as a billy-goat”, “you could choke a horse”, and “the trots”.

Fresh off the plane from Auckland when he catches up with AFR Weekend, the 65-year-old comes across as laid-back and relaxed, despite the fact he is about to launch a charm offensive to sell one of the biggest deals of his career.

Duke owns 78 per cent of New Zealand homewares giant Briscoe Group, which last month launched a $324 million takeover bid for struggling adventure clothing group Kathmandu after snapping up a 19.9 per cent stake in the target. The bid became public on Kathmandu chief Xavier Simonet’s first week in the job.

While “Briscoes”, which also owns Rebel Sport stores, is a household name in New Zealand, Duke is relatively unknown in Australia, having moved to Auckland in 1988. This son of an Adelaide bookie and golf fanatic has kept a firm eye on the Australian retail scene though and regularly catches up with powerful mates Gerry Harvey and former Myer boss Bernie Brookes.

Duke flew into Australia this week to begin the hard-sell to Kathmandu investors. He accepts he is a little-known quantity on this side of the Tasman and the challenge is incentivising Kathmandu’s Australian shareholder base to invest in his company.

“We have put our money where our mouth is. When the instos and the media and the mum and dad shareholders of Kathmandu have a look at our bone fides…our track record is pretty good,” Duke says.

He has been eyeing off Kathmandu since another old mate Jan Cameron phoned him a decade ago to ask him if he wanted to buy the company she founded. That didn’t happen, partly because her “price aspirations were somewhat different from mine”.

But Duke and Tasmanian-based Cameron still catch up for coffee occasionally when she visits New Zealand. He says she has no involvement in the current bid.

Duke denies speculation the deal is a way for him to exit Briscoe and says he is not ready to retire as managing director.

“I’m not a greedy man, if you can multiply 169 million (Briscoe shares) by $NZ3, which was the stock price a short time ago, I could live off that.

“But my wife will tell you, I’m terrible on holidays. I’m over beaches and churches and books. I’m over it! I don’t want to do that anymore. I got my wife into golf, so if we go away on holidays now we play golf everyday. She’s saying to me ‘can I have a rest?'” he laughs.

WORK ETHIC

Duke says he has worked hard his entire life. His first job was selling shoes in an Adelaide department store at the age of 16, but the exposure to money started as a child when he would help his bookie dad count the racetrack takings at their Glen Osmond home on a Sunday morning.

“We would get out  the big white betting bags with “R Duke” written on them. We turned them upside down and there were tickets and cash everywhere. The tickets had to be sorted numerically or the cash had to be wrapped in rubber bands.”

Early in his career, Duke worked in Adelaide’s John Martin’s department store which was later acquired by David Jones and went on to meet Gerry Harvey in Sydney when the two were in the same buying group. He held various roles at Walton’s, and Grace Brothers before being recruited to fix up the former Alan Bond-owned Norman Ross chain which eventually became Harvey Norman.

But his big break came when he was recruited to fix up Briscoe by its then Dutch owners Hagemeyer. Duke said he negotiated a deal to sell the business back to himself but will not say how much for. “You’d think I stole it. I was saddled up with the biggest bloody personal guarantees. You could choke a horse, you know. I would have been ruined for life had it not worked,” he says

“The thought of bankruptcy does inspire people to do extraordinary things. But it worked.”

Briscoe, which now owns 46 homeware brands and 34 Rebel Sport stores, listed on the New Zealand exchange in 2001. It boasted around 40 per cent compound annual earnings growth until 2001. Growth has eased since the global financial crisis as the business restructured.

“Over the last three or four years I have a bit more balance in my life, but from 1998 until 2007 it was pretty much seven-days-a-week. You would take buyers on 45-day buying trips, three times a year just trying to find the most beautiful merchandise at the right price and then Rebel Sports came along in the 1990s,” he says.

Duke reveals he spoke to Harvey and Brookes about bringing the Briscoe brand to Australia four years ago but was put off by the “scary retail stats”.

“These people are real good retailers and they are getting skinned alive.”

“I haven’t spoken to Gerry [about Kathmandu] and he might be a bit cranky I haven’t.”

“I am very keen to fix all the holes in the mothership and there are some gaping holes that have been evident for a considerable amount of time. It is not like suddenly appeared at Easter, they have been there for a good part of the year.”

 

[“source – afr.com”]