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Passing the baton

July 22, 2010: Two of Victoria’s most long-established and respected retailers (and just damn good people), Norbert and Diane Herrmann (All Colour Photographics, Ferntree Gully) and Jim Kent-Hughes (Laser Image, Geelong) are ‘taking down the shingle’ after decades in the photo industry.

While the Herrmanns are still seeking a buyer for their much-loved minilab/giftshop, Laser Image has found a new owner in ‘Mr Perpetual Motion’, Tony Borg (pictured right with Jim Kent-Hughes)

A single father with an active role in Rotary, Tony is now also the proud owner/manager of three (count them!) retail outlets in and around Melbourne.

And that’s when he is not repping for IPS!

Tony, a qualified civil engineer, more or less stumbled into photographic retailing via a part-time job working at a Kmart photo counter. One thing led to another and 13 years ago he put aside engineering to become the co-owner of Moonee Ponds Photographics.

In 2008 he reached a crossroads:

‘I was on the verge of leaving the industry in 2008, but while I was attending PMA in the US I was getting calls from the management of the new Point Cook Town Centre.’ (A new shopping centre development in Point Cook – an outlying town closer to Geelong than Melbourne.)

‘They liked what we did with Moonee Ponds and wanted a photo lab in the new centre.

‘I told them they were crazy to be looking at a photo store with what was happening in the industry – it was just too risky.

‘In the end they made me an offer I couldn’t refuse. I didn’t have to borrow much money and the timing was good. There was a lot of second hand equipment around from Big W and others and large format came into play about that time too. So all the pieces of the jigsaw came together.’

Tony and his team did a ‘bright and colourful’ fit-out, based on the successful Moonee Ponds store model, leveraging his civil engineering background. The store opened in in January 2009.

‘It hasn’t been a fairy tale – there’s been a lot of hard work – but it’s coming together. We are about two years away from where we want it to be.’

He said his retail operations were ‘only as good as the weakest employee’ and with a lot on his agenda, he relied heavily on support from his 16 staff. As a consequence, there was also a strong emphasis on ongoing training in the business.

The large format side of the business has been instrumental in keeping things afloat over the last couple of years, according to Borg. He focusses on the business-to-business side of large format, working with local businesses including other shops in the centre. (Business-to-business wide format printing, by the way, also plays a significant part of Phil Gresham’s successful FotoFast outlet in Brisbane.)

‘It’s discounted work admittedly, but it takes the seasonality out of it,’ he explained.

With no price-slashing competitors in the centre (although there are Harvey Norman and Big W outlets in nearby towns), Borg is able to place a fair price on his bread-and-butter printing business.

‘We start 4×6 prints at $1 and move down to 29 cents for 1000 or more.

‘The last thing you want to do is be selling two or three prints and then putting them in a wallet all for under a buck. That’s crazy.’

He said the largest portion of the basic consumer print business is people coming in to get five of 10 prints done, for which they happily pay multiples of the discount store price.

Borg offers two versions of photo book – a single-sided version produced in store on silver halide paper and the other created in store and produced in Hong Kong on digital offset equipment, with a 4 – 21 day turnaround. They produce on average 150 books each month with price points ranging from $80 – 350.

A recently acquired Nortisu D1005 duplex inkjet minilab will provide new capabilities to produce double-sided photo books in-house.

The acquisition of the Laser Image business in Market Square, Geelong was perhaps even more unplanned than Point Cook, with Borg calling on Jim Kent-Hughes in his capacity as an IPS rep on the day Kent-Hughes was to notify centre management of his intention to close the business, having been unsuccessful in finding a buyer.

‘I just thought, “what a shame, after 20 years’ hard work”. The business has such autonomy in the Bellarine Peninsular. Everyone knows Laser Image and everyone knows Jim.’

A scramble to retrieve the notice- to-quit documents from the internal mail ensued after an offer was made!

Borg assumed ownership on May 1, with Jim Kent-Hughes staying on in a consultancy basis.

‘At 76 I don’t think Jim is ready to retire. I love having him there,’ he said.

The rest of the story is yet to unfold. But the goodwill between the two men and their combined experience and business acumen augurs well for another 20 successful years for Laser Image.

The Big Picture

Actions always count more than what people say, and with his recent business decisions, Borg has clearly taken a considered punt on the continued viability of the specialist retail channel.

‘The independents who constantly re-invent themselves will survive and succeed,’ he said.

‘The minilab as we know it will disappear – but I’m better than 10 years ago,’ he said. ‘I’ve got a wide-format printing business. I’m a canvas printer, I have a business-to-business quick printing business, I have an association with a $20 million digital offset business. There’s the photo studio,…

‘Photo labs that have gone through this process of change will come out much stronger.’

He feels the discount store 10-cent print model will eventually implode, and doesn’t see Big W and Harvey Norman as his competitors, but as suppliers of free promotional investment.

‘They are pushing $30 photo books and giving consumers a bad experience,’ he said.

‘Any form of exposure and consumer awareness is fantastic – but in the end they are pushing boxes. Photo is a loss leader or a drawcard for other products. They are not there to sell.’

– Which provides the perfect ‘in’ for customer-focussed retailers to ask a fair price for a superior product supported product knowledge and real service.

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