The new Hi-Fi CEO discusses the rebrand and why the old business model didn’t work
Yesterday, the new owner of the three Hi-Fi bars in Sydney, Melbourne and Brisbane announced its new name and booking agent.
Max Watt’s Operating Pty Ltd will rebrand each Hi-Fi to Max Watt’s over the next few weeks as part of a new business model, which will shoulder the enmity that formed prior to the venues’ going into administration.
Speaking to TMN, Max Watt’s CEO, Greg Bourke and the venues’ past and present major creditor – who requested to be referred to using her first name only, Kate – said previous owner The Hi-Fi Group (owned by former Carlton Blues player Luke O'Sullivan) had been financially unstable for years.
“[The renovations are] to be expected for a business that’s been under clear financial stress over the last three or four years,” said Bourke.
“I suppose one of the problems is that there’s a lot of bad blood with that brand in the industry. Some promoters have not dealt with the company in the past,so we wanted to deliberately show that it was a new beginning and a new start and a new funding arrangement.”
The new operators also undertook consumer research prior to the takeover announce: “We hear people talk about the great music but [say] it’s not the sort of place you want to hang around after a gig,” Bourke said.
Max Watt'shascommitted to renovation work that ranges from furnishings and fittings to ventilation, sound and lighting.
The Hi-Fi bars entered administration in February when a dispute between operator The Hi-Fi Group and the major creditor could not be resolved. Bourke revealed to TMN what that dispute was: “There was a disagreement,” he said. “The creditor wasn’t being paid their money back.”
The business struggled because of high overheads in its head office in the CBD of Melbourne. The payroll has now been paired down to just key staff in administration but Bourke said staff at an operational level may increase.
Kate, the major creditor who invested in 2011, funded the Hi-Fi’s plans to set up shop in Sydney in 2012. Prior to the venues' entering administration she was concerned that the business was not profitable and that there was no pathway to profitability because the fixed costs were too high.
“It was in a position of imminent liquidation and shut down,” Kate told TMN. “It was put in administration to actually save it, not to damage it.”
“Unfortunately costs were going in at the wrong area,” added Bourke, “and that’s why we had to reduce our fixed costs and change the model.”
When it went into administration, Kate joined the bidding arrangement along with others and was successful.
Kate’s has reinvested into the business with the hopes to create a better experience for the patrons. She said people will notice a significant different especially in Melbourne,which she saidis “really dilapidated.”
“It’s not going to be plush like a five-star hotel or anything like that,” said Kate. “It’s still going to be a music venue. The key this is what it sounds like and the bands are going to love it.”
Announced yesterday, Melbourne-based booker The Venue Collective (TVC) has been brought on board, taking over from James Power. TVC was formed last year by ex-Corner Presents and ex-Corner Hotel staff who now look after, along with Max Watt's, the Corner Hotel, Northcote SC, Newtown SC, Shebeen, 170 Russell and Woolly Mammoth.
Rich Moffatt, who has been booking bands for concerts and festivals for 25 years, helped create TVC and is now an advisor.
Ben Thompson, Director of TVC, told TMN the company was in discussions with a few venues prior to joining Max Watt’s.
“The Venue Collective have been talking to a number of venues over the past 12 months in the East Coast capital cities as well as WA and SA. For us it’s all about a commitment from venue owners to offering a high quality of service and hospitality to both patrons and acts. The new Max Watt's owners share the same vision and we're going to give these venues a red hot go.”
Upcoming shows posted on new Hi-Fi websitewww.maxwatts.com.auinclude Blackstreet, Architects, Peaches, You Me At Six and A$AP Ferg. Max Watt’s will honour all existing bookings and tickets.