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26 March 2007

Coles breakup signals strategy failure.



Putting paid to his much vaunted big-box brand strategy, Coles Group Chairman Rick Allert announced today the troubled retail giant will be split and expressions of interest sought.

Despite a number 30 ranking in the global retailing stakes, Allert and CEO John Fletcher seems to have cast aside the dubious brand work of both McCann Erickson and Futurebrand and has told investors and the market that it was inviting expressions of interest for 100% ownership of the group including what they call the Everyday Needs Business (Coles Supermarkets and Kmart), Target and/or Officeworks. He also said the Group would also consider the sale of a considerable stake in the Everyday Needs Business as well as a demerger of both of Target and OfficeWorks.

Here at DIFFUSION we've been a long time critic of the group's less than comprehensible brand strategy, with Allert and Fletcher being consistently wrong footed by Woolworths. Just over three years ago Fletcher had the opportunity to set things right but even then he was saying his organisation didn't need one. It's about time other similar companies (we have a list!) woke up to the need for CEO-led wholistic brand strategy not run by their marketing departments or their advertising agencies.

Coles failure is a patent example of such strategy absence.