McLernon
Group of Companies
MSD
Limited (to be formed) is currently a Group of
companies made up of a retail company with three
retail outlets (Topstone Holdings Pty Ltd ATF
McLernon Unit Trust t/a McLernons Supply + Demand
[O'Connor, Welshpool, Joondalup]), an import wholesale
company ( MSD Wholesale Pty Ltd), a cabinet making
factory (MSD Cabinets Pty Ltd), an auctioneering
business (Portacorp Pty Ltd) and a share holding
( Via MSD National Pty Ltd) in a Hong Kong registered
exporting agent (Kingfeng Export Corporation Limited)
that owns an office furniture manufacturing company
in China. Please see structure tree above.
Peter
McLernon is the sole director of each of the Group's
companies and through his family trust sole or
major shareholder of each company. Peter McLernon's
background has been as a principal in small business
in Western Australia for over thirty years. He
founded and owned WA Scrap Metals in Gnangarra,
Commercial Sales and Salvage in Northbridge and
Direct Office Furniture in West Perth. Throughout
most of this time he has been a licensed Second
Hand Dealer and/or Auctioneer. During this period
he also served as Managing Director of Countrywide
Credit Limited and The Life Insurance Policy Exchange
Pty Ltd based in both Perth and Sydney offices.
The
McLernon Group of Companies was founded by Peter
McLernon in the year 2000. The Group started as
a sole trader family business selling mainly used
office furniture, shelving and shop fittings from
premises in Welshpool, Perth, Western Australia.
Stock was purchased locally from auctions and
directly from businesses upgrading, moving or
closing down. The intention was to become the
largest dealer in second hand commercial goods
in Western Australia and this aim was quickly
achieved.
As
clientele grew, demand for new products to compliment
the available second hand stock expanded. Lines
of new stock, purchased from local wholesalers
were progressively added to the large stocks of
second hand goods carried by the business. We
quickly began to take a profitable share of the
new market away from our retail competitors.
The
original store in Welshpool was doubled in size
to cope with the increase in stocks and sales
and in July 2004 additional premises were leased
in O'Connor. Also in 2004 we began to import new
stock lines directly from China, Taiwan and the
UAE. Our strategy in China was to use a local
agent to increase quality controls and liaise
with local manufacturers. We set up a strategic
alliance with a PRC national partner based in
Shenzhen in Southern China who had a Hong Kong
registered export agency, Kingfeng Export Corporation
Limited.
The
premises in O'Connor were used as a combined import
warehouse and retail outlet. In October 2006 MSD
Wholesale Pty Ltd was established to sell imported
products to the retail stores and to begin making
wholesale sales to outside retail businesses.
Also in 2006 MSD Cabinets Pty Ltd was establish
to provide custom built furniture for our customers.
This meant that we could provide a more complete
service to our office furniture customers and
begin to do on site and fit out work. We also
were now supplying up to 90% of our own product
brands for our retail stores.
In
2005 McLernon's Supply + Demand Auction Division
(Portacorp Pty Ltd) was established to give added
benefit to our clients wishing to dispose of assets.
The Auction division is a fully licensed auction
house capable of conducting all classes of auctions
anywhere in Western Australia. The auction business
also holds a contract to dispose of the West Australian
Governments surplus IT equipment.
Also
in 2005 Megajet Pty Ltd was formed to buy, refurbish
and on sell second hand IT equipment. This business
was closed in 2006 and the IT business folded
into the retail business so that new and refurbished
IT and business equipment is now sold through
our retail stores. The combination of new and
used office furniture, shelving and storage systems,
shop fittings and IT and business equipment allows
us to provide a one stop shop for most commercial
business requirements.
Growth in Western Australia
In
Jan 2006 a small office furniture business was
purchased in Joondalup giving us three stores
in strategic central, southern and northern suburban
locations, increasing the viability of our marketing
campaign and increasing volumes sold by our wholesale
division. It is our intention to open at least
two more metropolitan branches in the second half
of 2008 to continue the expansion of our market
share in each of the four product categories.
We
will also continue to grow our share of the office
furniture and shelving wholesale market in WA.
In December 2008 the wholesale business was moved
into a dedicated 7000 sq meter warehouse in O'Connor
to allow for increased container traffic and future
expansion. This also increased the amount of retail
floor space at the O'Connor store which will be
taken up by our expanded new range together with
more second hand stock.
International
Growth
In
March 2007 we established MSD National Pty Ltd
and it then purchased a 50% share in the agency
business (Kingfeng Export Corporation Limited)
and together with our Chinese partner began to
export office furniture to Australia, the UK and
USA.
In
November 2007 a one third share of Kingfeng Export
Corporation Limited was sold to Office Interiors
Limited, a United Kingdom based retailer of new
and used office furniture with four retail branches.
Kingfeng Export Corporation Limited is currently
incorporating a wholly owned PRC company to begin
the manufacture of office furniture in Southern
China in its own right. Office furniture from
this company will be exported through Kingfeng
to Australia, the UK and other countries. Our
Chinese partner will also begin to sell to the
huge local Chinese market.
Growth
in Australia
During
the first half of 2008 the potential for franchising
branches as a way of growing further in WA and
expansion into other states was canvassed. Franchising
may form part of the future of the Group in some
instances, however it has been concluded that
most of the growth for the business will come
from purchase and acquisition of existing businesses
both in Western Australia and in all other states.
An
overview of the new and used office furniture
and shelving industry and used IT industry across
Australia shows a fragmented retail industry with
most businesses confined to one to three stores
within each state. Very few are based in more
than one state and many are family owned businesses
struggling to compete with other medium sized
importers who have the capacity to import stock.
The way is open for a truly national office furniture
commercial retail chain.
It
is the intention of the company to establish through
purchase, acquisition and amalgamation at least
twenty five stores across Australia in the next
three to five years. These will be followed by
wholesale and cabinet works in each state as required
to service branches.
It
was decided in 2008 to establish MSD Limited and
list the company on the Australian Small Scale
Offerings Board as a means of bridging the gap
between being a small family owned business and
becoming a public company listed on the ASX. Funding
provided by this initial listing in July 2008
will finance the planned Australia wide growth
of the business and also allow for acquisition
by offer of shares in the company to owners of
existing office furniture businesses.
Website
McLernon
Group of Companies
Profiles
Peter
McLernon
School
Volunteer Program
Contact
36-48
Welshpool Rd, Welshpool WA 6106
Tel: (08) 9470 9997 Fax: (08) 9470 9119
Email: mail@mclernons.com.au
Branch Opening Times: Mon/Fri 8.30am - 5pm
Saturday 9am to 1pm
Perth
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and Community Entrepreneurs
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