Godfreys Group (ASX: GFY) is one of the largest speciality retailers of domestic and commercial floorcare and associated cleaning products in Australia & New Zealand, offering an extensive range of company-owned brands, an exclusively licenced brand (Hoover) and a number of third party brands.
The Company is regarded by Australians as the ‘experts’ in vacuum cleaners and cleaning products, accommodating consumers at all price points. Historically Godfreys’ customers have remained loyal to the business in both good and bad economic times. Godfreys is an integrated business that designs and develops vacuum cleaners, floorcare and other cleaning products, co-ordinates manufacture, develops brands, advertises and sells to both wholesale and retail markets. The Company employs 456 permanent employees, with head offices and a company-operated warehouse located in Victoria, Australia.
Godfreys’ multichannel offering is distributed via 212 branded retail stores (129 company-owned; 83 franchised) located in standalone ‘superstores’ and shopping centres and retail shopping strips in Australia & New Zealand. Godfreys’ products are also distributed through wholesale channels via a range of retail outlets and an online platform.
Godfreys successfully completed an IPO in 2014 to underpin the next phase of the company’s expansion drive, listing on the Australian Securities Exchange in December 2014.
Godfreys is an iconic Australian retailer with a trading history spanning more than 80 years. The Company was founded from humble beginnings by Godfrey Cohen in 1931 during the Great Depression. At the time vacuum cleaners were sold door-to-door and could not be purchased in stores in Australia, so Godfrey began selling reconditioned vacuum cleaners through his father’s furniture store in Bourke St, Melbourne.
In 1936 Godfrey Cohen met his business partner and 19 year old sales clerk John Johnston through a financing company. Together with Johnston, Cohen opened his first store in Prahran, Melbourne, and continued to revolutionise the vacuum cleaner business in Australia. Over the years, the business has grown from strength to strength and the Godfreys brand is synonymous with vacuum cleaners.
In 2004, Godfrey Cohen passed away after an amazing business career. Today John Johnston, now 98 years old, remains a part-owner of Godfreys. Johnston is the longest-serving contributor to Australia’s vacuum cleaning industry and is still actively involved in the business, ensuring his extensive retail experienced is leveraged within Godfreys’ Management team.
Godfreys is the only organisation in Australia & New Zealand servicing all segments of the vacuum and floorcare cleaning products market with a full product offering via multiple brand channels. The Company has achieved significant scale through a comprehensive network of stores across Australia & New Zealand, making us the largest vacuum cleaner retailer in the Trans-Tasman.
Godfreys has sold millions of vacuum cleaners and continues to lead the market through continuous product innovation, a clear strategy for product development, a strong sales culture focused on continuous training, and good old-fashioned hard work. Innovation is in the Company’s DNA and is a key plank of its strategy. Godfreys has an established track record of developing interesting new products and bringing them to market far quicker than Dyson and other competitors can.
The Company sees itself as a ‘disruptor’ in the Floorcare & Associated Cleaning Products space, able to accommodate and thrive at a range of different price points.
Godfreys is seeing a seismic shift in the market towards consumers’ desire for overall personal health and wellness. Australians have become more health-conscious, not only about their eating and exercise habits, but also the desire to have a healthy sanitised home environment.
This trend is being amplified by the increasingly busy nature of the modern household, in which long working long hours, caring for kids, pets or parents, managing to exercise and having an active social life means people do not have the luxury of time to spend most of their week or weekend cleaning the house.
There is a clear progression towards consumers favouring greener, chemical-free home cleaning methods, which is driving strong demand for Godfreys’ steam mops and dry-steam mop vacuums and sticks.
The other key driver in Godfreys’ product development is the increase of chronic allergies such as asthma and respiratory irritation caused by dust mites, pet hair, carpet dust and toxic cleaning chemicals. This has presented significant opportunity for the business in the air purification and filtration space, where Godfreys vacuums ensure that the air coming out of the vacuum is cleaner than when it enters. The everyday pressures of modern living have also turned working people into a time-poor generation, where consumers want household chores to be done in half the time. This trend has given rise to Godfreys providing answers to the time-poor through a Robotic segment, where Robot vacuums are used as a second device to do a basic job in the background, when customers don’t have time to do a deep-clean of the carpet.
Australia’s ageing population is also driving a trend towards downsizing to smaller living in apartments and townhouses. This has increased the need lighter, easily manoeuverable vacuums like the stick, which is easily portable up and down stairs, with handles that can be folded to save on storage space.
Godfreys estimates the Floorcare & Associated Cleaning Products market in Australia & New Zealand, in which Godfreys operates, generates AU$1.3 billion of sales per annum, of which the domestic customer segment accounts for AU$0.8 billion and the commercial customer segment accounts for AU$0.5 billion.
The Australian/NZ retail vacuum sector is highly competitive, with retailers offering considerable choice in products and brands across a range of price points, which are sold to the domestic and commercial sectors via retail, wholesale and online channels. Key product categories include: vacuum cleaners, carpet shampoo machines, steam cleaners, general merchandise, accessories and repairs and services.
Godfreys sees ongoing growth in its industry sector, as consumer focus on healthy home environments and time-saving cleaning solutions increases and drives product innovation and new product category growth. This has resulted in the emergence of high end premium-priced floorcare products, which have been supported by consumers.
Continued growth in the number of households is expected to underpin the growth in demand for floorcare and associated cleaning products, with the number of Australian households expected to increase by 38% from 2010 to 2031.