Computerworld told the story this morning of Wellington Apple premium reseller Bay which, only four months after opening, has closed down.

Director Grant Bremner stated that “the business has attracted 80% of required capital, but needs an additional $100,000”. He has closed the shop but hopes to re-open in the same location as soon as sufficient investment is found.

I know times are tight, and I know capital is hard to come by these days but I can’t help feeling there’s a whole lot of lily gilding going on here. This is a retail store we’re talking about, not a start-up leveraging investment to create some IP. Retail, despite being complex, is a game of margin – you buy some stock, secure in the knowledge that you’ll sell enough at a particular price point to enable you to pay your overheads – rent, wages and the like. If Bremner had blamed falling sales volumes and margin squeeze on the demise I’d be sympathetic – after all the store opened at possible the worst possible moment.

I mean once your store is built what do you need capital for? Initial stock you say – well yes but this business has been going for four months – which should be long enough to have sold stock at margin and enabled the acquisition of new stock.

So I’m sad to see The Bay fall – it was a beautiful store selling beautiful products. But maybe that beauty wasn’t sufficient to attract enough punters willing to part with their money.

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

  • From personal experience I love the guys at the Bay store and will be sad to see it closed, however I still didn’t spend any money with them, being cost concious I just couldn’t bring myself to pay a premium for the stuff that I wanted (such as extra memory, faster hard drive for my Mac) when it’s available elsewhere for significatly cheaper.

    I appreciate I might not be the market they’re after but the Apple stores in London or elsewhere always seemed to have a very busy vibe, with a lot of non apple products as well as the core apple line. I don’t think they stocked enough of the hard to get, non apple products, such as bags, ipod accessories etc.

    Will be sad to see them close though as they were genuinly nice staff..

  • Seems like it will be missed one or two other prominent people too:

    …but that doesn’t excuse the store from good business practice.

  • I wrote this on Twitter and of course the Apple folks there didn’t like it but…

    It’s a very expensive hardware on offer, and we are living in very hard and tight times.

    That’s it…

  • I agree with M Freitas. Point in case is I can by 5 Dell mini Netbooks for 5 staff as work/play takehomes or else buy just one Mac laptop. Apple is very premium in a very weak economy. Not a good position to in for any product, software vs saas incuded.

  • I think Ben’s analysis is spot on. Retailing a commodity item on high-margins in a time when buyers are value-conscious is not a viable business proposition.

    It is not that people will stop buying Macs. But rather people would use their time to shop around instead.

    A in-home-cinema vendor in my town says that he couldn’t compete on price with the big box vendors, but he points to the missing demo TV on his shelf, and said that the higher margins allow him to supply his customers with a back up TV when theirs is in the repair shop.

  • Ben, your comments are so spot on, it’s not funny. Your comment that something else is going on below the surface is astute.

    The issue was not with lack of sales. The Macs were flying out the door, despite the ‘Global Economic Crisis.’
    In tight times, people still spend money, they look for better value, and Apple products deliver

    The issue lies in the Grant Bremner is a con man, full stop. His lines about tough economic times are a conveinient cover for his dodgey business practices. He is quoted as saying that staff are his most valuable asset. Yet since he closed the doors, not only has he not paid anyone, he has not bothered to contact any of them. Not an email, phone call, nothing.

    The whole Bay saga is a slimy affair that goes much deeper than anyone knows. What annoys us the most, is this constant dribble about the financial crisis being the cause.

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