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Blenheim is in the famous Marlborough region, nestled on the north eastern corner of the South Island, with a population a tad over 26,500. Explorers such as Captain James Cook and Dumont d’Urville were known to seek shelter in its harbour and nowadays the world comes to the area, enjoying sunshine, wine, gourmet foods and the stunning Marlborough Sounds.
But Blenheim is also home to and famous for 100% Herkt Appliances, the subject of the last yarn in our series on New Zealand’s most iconic retail brands.
It all started in 1962, when Gordon Herkt joined WGG Cuddon as an apprentice refrigeration engineer. Cuddon was a large Blenheim company with a staff of around 125. It covered all facets of engineering – mechanical, fitting & turning, diesel shop, sheet metal, boilermaking and blacksmithing – as well as having a home appliance sales & service division as well.
As well as becoming an engineering tradesman, Gordon also spent time installing 50-foot TV aerials, television having just become available in the region. Frigidaire was the operation’s whiteware speciality with domestic and commercial refrigeration and electric stoves.
“I had 10 years with Cuddon’s,” says Gordon today, “and during that time I became brainwashed that every competing brand was no more than second best. In fact, my time with them was a world of experiences. Anyone showing initiative and capability was given a lot of latitude and could make use of specialist machinery across the whole company.
“My work involved refrigeration installations for the dairy, horticulture and fishing industries. One contract which stands out was a vessel from Stewart Island on which I did the refrigeration install and then went on the maiden voyage back to base, experiencing lots of very rough weather in the process, scary at times.”
WHEN THE PUB AND WORK COINCIDE…
Although he found it a tough decision to take, Gordon Herkt wanted to do his own thing and finally resigned his position at Cuddon to join up with Alan Martella and together they formed Herkt & Martella, refrigeration engineers operating out of premises in Main Street, Blenheim.
At this time retail beckoned but the decision wasn’t cut and dried, recalls Gordon: “Although Alan did not share my enthusiasm, I was keen to add a retail string to our bow and went to Auckland to try for Prestcold out of McAlpine Industries. But, for whatever reason, they turned us down so I approached Bonaire.
“They gave us an agency for glass fronted cabinets but not their freezers so I ended up doing a ‘back door deal’ with a local stockist, Sun City Appliances, at retail less 10%, and we sold them mainly to our commercial customers. Once we could prove some numbers, Bonaire supplied us direct so we were able to make full margins.”
Prestcold then had a partial change of mind so messrs Herkt and Martella purchased from McAlpines Christchurch at retail less 15% plus the freight up to Blenheim. “Not ideal,” says Gordon Herkt today, “but better than nothing. And at least we could promote sales and service at retail level. When they saw our volumes rising, we were granted a full franchise from Auckland and had our first experience with three-month rolling allocations.”
But, for five years their primary business was commercial refrigeration and the company formed an important alliance with New Zealand Breweries which was entering into the highly carbonated bulk beer market. This required all hotels to upgrade their tank-room refrigeration and install cooling systems which pumped chilled glycol alongside the beer lines in insulated ducting, right to the taps at the bar.
Herkt & Martella performed outstandingly for NZB and, with Cobb & Co restaurants also flourishing, their supply spread to ice makers, commercial glass and dish washing equipment, glass door chillers, post mix machines, deep fryers, bain-marie cookers & griddles.
Herkt & Martella was a skilled one stop shop, supplying and setting up complete operations. Their reputation grew rapidly and they won contracts to upgrade dairies by supplying counter-serve ice cream cabinets, some with milkshake compartments, plus single, two, three or four door chillers and upright freezers.
LOOKING FOR COMMITMENT
Backtracking slightly, Gordon had met Patricia Mai in 1970 during one of Gordon’s visits to the town on Cuddon business. Trish was in the hospitality business in Picton, having earlier worked for Alan Newbold in Wellington. The pair married in 1974.
And, as the Herkt & Martella operation’s retail developed, Gordon & Alan realised that if they were to be serious, they needed not only a standalone shop and extensive product diversification, they needed to commit!
So the hunt was on for a suitable site which eventually presented itself along Blenheim’s Main Street and opposite the Post Office and, on 7 June 1977, Herkt & Martella appliance specialists opened for business.
Gordon picks up the story: “In whiteware we were a multi-brand store with Prestcold & Simpson refrigeration and Champion and Atlas laundry. We didn’t have F&P of course but Shacklock stoves were available, along with Frigidaire, Champion and Atlas.
“We did a thorough job and set up the store with kitchen cabinetry for wall ovens, cooktops, rangehoods and dishwashers, adding small appliances, along with Pye, Sanyo & Majestic stereo as well, but no TV.”
The store made “good progress” and, within a couple of years, Herkt & Martella needed a bigger place: “With only front door access I remember we often had to carry stock, including 32 cubic foot freezers from a double-parked truck, around parked cars and into the shop!”
JUST GOING TO “THE CLUB”
The new premises were based on The Marlborough Club. Established in 1872, in 1889 the Club moved into a specially constructed new 12- new building on the corner of High and Seymour Streets.
90 years later, Gordon and Trish Herkt purchased this property when the Club finally vacated it. “We had retained a financial advisor and the first thing he told us was that any new site must have all our facilities under one roof – retail, service & admin. The Club site suited us down to the ground and all up we paid $90,000 for it [around $520,000 in today’s terms], with three street frontages. We built a new entrance from the car park and virtually gutted the inside. What had been the billiards room with eight full size tables became our main showroom.
“Large archways were cut through into the old reading room which was at the front, for a secondary showroom with window areas on the High Street corner. Then we erected a dividing wall halfway down the building and behind that was our service department.”
With the new premises came new technology. “We had been using a clunky old Burroughs accounting system which was now completely inadequate and moved stock control to Kalamazoo before we installed a comprehensive Kerridge Odeon computer package which could handle serial numbers and colours and be fully integrated with debtors, creditors and our general ledger.”
ALL IN THE FAMILY
Trish and Gordon had already started negotiations to buy Alan Martella’s shares and, when the new shop opened in 1980, Herkt Home Appliances was a proper family business.
The store’s main thrust was still whiteware. Small appliances and stereo were growing categories but television was still not part of their range. With some 15 appliance retailers in town, competition was extremely keen!
“We had to be on our toes,’ says Gordon, “but having our own service department was very beneficial. Customers liked the fact that, regardless of what they bought from us, we could fix it fast if there was a problem.”
This move proved to be an inspired decision as the high profile site saw turnover rise rapidly. The Tellus vacuum cleaner agency had been secured early on and as we have read in previous issues, this was a licence to print money. Herkt’s allocation was 25 machines a month and most were pre-sold at full RRP.
Kambrook barbecues were added along with Toshiba and Mitsubishi microwaves, Hoover washing machines, Moffat stoves and the sensational Commodore Vic-20 computer packs.
In 1982 it was off to exhibit at the local A&P Show, an activity which was continued for the next decade. “We would hire a huge marquee, taking the middle bay ourselves and hiring those on either side to the Holden dealer and a cycle retailer. I think that was our first major event with Maytag.”
OF MARGINS AND GREAT CHARACTERS
The Herkts had been warmly welcomed into the appliance retail fraternity and became founding members of the Appliance Guild with Gordon being appointed to the Board in 1983.
Gordon gets all nostalgic on me at this point of our discussion: “First thing to say is that we made decent margins back then, without the price and credit wars we have had to endure over the past 15 or so years. But also, the industry was filled with characters, fun people who became friends – Doug Morris, Ralph Roberts, Ted Holland, Colin Townshend, Jim Bulloch, Chris Fenn, Geoff Lawes, the list goes on and of course, the great man, Dennis Amiss who, through thick and thin, was the one guy who held the industry trade group together.
“Suppliers had Head Office Reps and Managers calling on us and springing to mind are Doug Condon, Ross Kirkland, Jerry Harrison, Mike Barker, Dave McEwen, Peter Duffin, Bevan Baker and Malcolm Bain. I’ve probably missed several but now, reps seem to pop in every 6-8 weeks or so, some only quarterly and the relationship building is largely not there anymore. We hardly ever see supplier head office management.”
A second branch was opened in Picton in 1985. Managed by Geoff Hart, this was a reasonable success but, after just a few years, the business was consolidated back to home base in Blenheim.
On 1 October 1986, GST came into being and the public perception that this would send prices soaring saw a mini boom take place. The reality was of course, that with sales tax and import duties virtually disappearing, prices actually dropped.
Then suddenly, 10 years had gone by since Herkt & Martella was founded – time for a party. On 18 November 1987, the Marlborough Express published a birthday supplement and by this time, the store was seeing the Dishmaster and Classique brands. Even Telecom was on board with “the most time-saving invention since the telephone” – a push button 60-number auto dialler! – and at last Herkt Appliances got started with TV.
JOINING RTS AND APPLIANCE COURT
Soon after this, Gordon Herkt looked into joining a buying group. Retail Trading Society (RTS) had an appliance arm which operated as Appliance Traders and, when the local dealer went into receivership in 1988, Herkt Appliances became fully franchised to RTS just as its retail branding was changing to Appliance Court.
Joining RTS was a major development, says Gordon: “It changed our whole retail mix from basically whiteware and stereo, to include the then prestigious name of AEG and a full range of TVs and VCRs.
“One of our first Appliance Court promotions was ‘Pay no GST’ where for a month we discounted the GST content back to the customer. I remember well also the Expos we had at the Expo Centre in Mangere. These were opportunities to catch up with all of our suppliers over a couple of days and do some special deals leading up to Christmas – wonderful times they were.”
Sandra Wood joined the company in 1988 and is still with Gordon and Trish today, running the back office but also helping out on the floor when required. Gordon describes Sandra as “invaluable,” particularly with inventory control, the computer system and spare parts.
1989 saw Herkt’s become involved in the now legendary Marlborough Wine & Food Festival. Gordon and his team would set up all the cooking equipment at the Festival and a relationship still endures, although the likes of Westinghouse and Fisher & Paykel tend to dominate today.
This was also the year of a major change in the telecommunications industry – deregulation. Suddenly, appliance retailers, via Telecom Equipment Supplies Limited (TES) were selling telephones and fax machines!
Around 1990, Herkt Appliance Court became a sponsor of the local Bride of the Year competition, putting up a top prize of a Tellus GS80 vacuum cleaner valued at $599 (just under $1,000 today).
This support carried on into the store’s Retravision days and Gordon reflects that participation in what was a really popular event, created ongoing repeat business from the winners, some of whom remark to this day that the old Tellus is still working!
BEING A “STATE OF AUSTRALIA” WORKED WELL
After much negotiation, RTS secured a licence in 1993 to trade as Retravision, effectively as a state of Australia, bringing about another name change. First it had been Herkt & Martella, then Herkt Home Appliances, then Herkt Appliance Court and now it was Herkt Retravision, complete with the distinctive livery.
However, as Gordon recalls, the advantages of being aligned to Retravision Australia were massive: “They were the dominant group across the ditch with something like 500 outlets and immediately our buying power increased markedly, but the biggest difference I think, was our attendance at their annual September Trade Fairs. These were extraordinary events, held in huge exhibition halls where all the suppliers, including Kiwi associates would have stands showing off their products.
“A condition of attendance for suppliers was that for the duration of the Fairs, extra special pricing, even better than catalogue specials would apply. In return, we retailers would place committed orders for October, November and December deliveries. The atmosphere was fantastic and there was a flash dinner on the Saturday night. We went to Sydney and Brisbane in the early years but it later became a regular Melbourne trip.”
When Gordon and Trish Herkt bought the old Marlborough Club building, the vision was always to demolish it and rebuild something better on the same site and in 1997 the dream started to become a reality. At the start of September the shop relocated to small, temporary premises and the bulldozers moved in.
The development captured the local imagination and the Marlborough Express covered progress, noting that the new $1m project would feature not only a magnificent new Retravision store with access from High Street and the Seymour Street car park, but a café and bar as well, which would look out onto Seymour Square.
On 23 September, the Express published a photo of Gordon watching the demolition, under the headline of “Confident Blenheim retailer banking $1m on upturn in economy”. The upmarket new complex opened in February 1998 and after a few months settling in time, on 14 May the Express carried a special advertorial feature to mark the official opening.
MORE FAMILY TIES IN THE 90s
The Retravision connection had certainly worked for the Herkt team. From the new store’s opening spread in the newspaper, we see that Pudney & Lee became even stronger, and then there was Whirlpool, Sharp, Philips, Vulcan, Akai, Sony and Nilfisk (previously Tellus). Car audio was added with a range of Alpine, all hooked up for in-store demonstration.
“It was brilliant,” Gordon exclaims! “The new shop was 625m2, giving us more than twice the retail area we had before. We were really busy and the support from our suppliers was outstanding. Several reps attended for special in-store promotions and our son Heinje was in his element showing off the latest in home entertainment technology, movies on DVD.”
Heinje had joined the family business in 1996 and by 1998 he was Young Retailer of the Year runner-up at the Industry Awards, promoted by Wares magazine and Philips, the same year he attained his New Zealand Diploma in Business. Heinje is now a Director of the company and in fact has been running it for the past 10 years, much to the delight of his parents.
Heinje’s sibling, Liza, also teamed up with mum and dad, albeit a little later, in 1998 in sales, a role which she still relishes, with a particular emphasis on small appliances.
But not everything in the naughty 90s was positive. Patriarch Gordon Herkt bemoans the late 1990s which saw not only the first of the “big boxes” but also the proliferation of using credit terms as a sales tool. “With the advent of Australian merchants into our patch, it became retail warfare. Thank goodness we had the strength of Retravision behind us because we could never have competed otherwise.”
“BIG HAPPY FAMILY” LASTED FOR 12 YEARS
During 1997 it was decided that RTS would close up and thanks to a core group of members with Rob Duckworth in the forefront, Retravision (NZ) was launched on 1 April 1998 as a fully operational Kiwi entity.
In his first newsletter dated 19 December 1997, Duckworth gave a comprehensive overview of planning, progress, and the path forward. He announced an interim Board comprising himself as Chairman with Alister Lilley, Warren Huband, Chris Arthur and Bob Scullin as fellow Directors.
Gordon Herkt too was enthusiastic about the future: “We had a bloody good leader in Leighton Cox, we still had the privilege of attending the Australasian Trade Fairs in Melbourne and the whole organisation was like a big, happy family.”
As the first few years of the new millennium ticked by, there was increasing concern around the viability of three separate independent buying groups – Retravision, ACL and Betta – and there were moves behind the scenes exploring ways and means of amalgamating them into one very large, highly competitive entity. But this never eventuated and several independents failed.
By 2008 the appliance industry wasn’t alone in struggling with the tough economic times ahead of the 2009 global recession and, unfortunately, Retravision New Zealand became a casualty. All Retravision shareholders were invited to join Appliance Connexion – the majority as identified 100% outlets – and from 1 April 2009, Herkt Retravision became 100% Herkt Appliances.
“The demise of Retravision was a terrible thing,” recalls Gordon Herkt. “My first emotions were shock and a feeling of disgust that our group family was falling apart through reasons I struggled to comprehend. However, we had to pick ourselves up and grasp the opportunity offered by joining ACL and we all headed to Auckland for a heads up.”
Of course it has been well documented that, following a highly positive and successful day of ACL briefings for these new Members on Thursday 12 February 2009, Wayne Burton, greatly respected CEO of Appliance Connexion, was hit by a passing motorist whilst out walking with his wife Heather and died overnight.
Gordon had known Wayne for many years: “We lost a true industry leader with Wayne’s passing. He was a mentor, he had vision and he was our friend.”
CALL ME LOYAL…
When Herkt Appliances opened in the old Marlborough Club building, there were about 15 full-blown appliance retailers in Blenheim, including a couple of stock & station agents and the power board.
“Now there are only half a dozen,” says Gordon, “but chuck in The Warehouse, hardware stores and even supermarkets with small appliances, then add the incredible number of brands and models available now and look at the margins we have to live with – it’s harder than ever to make a buck.”
“How do you survive then?” I ask. “We have a really broad client base, many of them second generation and, although customer loyalty cannot be taken for granted – far from it – at least we have a lot of returning clients who give us a fair shot at their repeat business.’
Plus, adds Gordon: We have come too far, invested too much in cash, time and effort to back off. So we knuckle down and I’m proud to say that we still have a pretty high profile in Blenheim and surrounds – hard earned, I can tell you.”