Finance Finance News Andrew Forrest cashes in on consumer ‘patriotism’ with RM Williams takeover

Andrew Forrest cashes in on consumer ‘patriotism’ with RM Williams takeover

Andrew Forrest's takeover of RM Williams is the latest in a string of Australiana-focused investments. Photo: TND
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Andrew Forrest’s portfolio of Australian brands has swelled following a reported $190 million purchase of shoemaker RM Williams.

And retail experts believe the mining magnate will soon add more iconic brands to his stable, as patriotic sentiment drives shoppers towards locally-made products.

Dr Forrest and wife Nicola on Monday announced their investment fund Tattarang had bought the Adelaide-based label, founded in 1932 by bushman Reginald Murray ‘R.M.’ Williams, from Louis Vuitton-aligned private equity firm L Catterton.

It marks the first time RM Williams has been into Australian ownership since 2014, after L Catterton bought it for $110 million.

Dr Forrest said he was “proud and humbled” that “a quintessential Aussie brand” with “a rich tradition of high-quality Australian craftsmanship” would be brought back under Australian ownership.

“I’ve never forgotten the first time I pulled on a pair of RMs. To wear RMs is to wear the boots of the countless hard-working Australians that have come before us,” Dr Forrest said in a statement.

The Forrests’ Tattarang – which also counts Indiana Tea House and the Western Force rugby team among its brands – bought the 88-year-old label outright, meaning minor shareholders received a hefty payout.

Among them was Hollywood star Hugh Jackman, who earned about $10 million from his 5 per cent share, while retaining his global ambassadorial role.

Retail Doctor CEO Brian Walker told The New Daily that although the purchase was “partly motivated by ego”, it also made good sense.

That’s because the brand had a heavily-discounted price and experienced a remarkable turnaround over the past five years, which saw it generate a $23 million profit in 2019, while also revealing plans to open 12 new Australian stores and expand into the United States.

Prior to the pandemic, the company’s profits were estimated to reach $83 million by 2024, after the brand won over younger customers and established new online and wholesale channels.

“This transaction is a purchase of the heart, and there’s something quite nice about returning the brand to its Australian roots,” Mr Walker said.

“The attraction is the brand’s pedigree and [Dr Forrest] has an attraction to buying Australiana-type brands, and he’s displayed that in many ways in his philanthropic and commercial work.

“Owning a brand that represents what it is to be Australian has appeal, and if you look at the financials, it’s a hard-performing business with good cashflow, revenue growth and the makings of an international brand.”

Mr Walker said disruptions to overseas supply chains during the pandemic had increased the value of locally-made goods and induced a “certain patriotism” among shoppers.

And research by Roy Morgan seems to back that sentiment, with nine out of ten Australians believing more products should be manufactured locally to counter an “over-reliance on imported products”.

Mr Walker said it’s likely the Forrests will flex their takeover muscles on other Australian-made labels, including Bonds (owned by Hanesbrands), KingGee and Hard Yakka (both owned by Wesfarmers).

Curtin University marketing lecturer Dr Billy Sung said RM Williams had built up strong “brand equity” after repositioning itself as a premium shoe and apparel brand during a five-year transitional period.

He told The New Daily buying an iconic retail brand that’s performed well in the pandemic – while other established names struggled – also made sense from a marketing perspective.

“It’s quite a smart move, because market research has shown globally that there is a tendency to support the locals and there’s been a move back towards Australian goods in recent years,” Mr Sung said.

“RM Williams is one of the more iconic brands that’s doing well, and as the boots are known to be worn by Australia, it’s iconic, it’s the outback feeling and it’s quality handcrafted, it’s an investment that would remain viable or break even over the long term.”

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