John and Jamie Murdoch - Retail 101

“The Fremantle Market is one of the key elements to the growth of Fremantle and an integral part of the local community providing various social and economic benefits.”

The above quote is just another example of the delusional statements made by the Murdoch management. Their ‘key elements to the growth of Fremantle’ should be compared to the growth of a melanoma. Regular visitors and long term stall holders have complained bitterly all year about the decline of the markets; the loss of soul, loss of customers, loss of livelihood, loss of businesses and traders and loss of goodwill.

Fremantle council meetings were filled beyond capacity as angry stall holders’ and their supporters pleaded with the mayor to undo or redo the lease with the Murdoch’s. A public rally was also held outside town hall to encourage council to ‘evict the Murdoch’s’

Is that what they meant by ‘an integral part of the community’?

Many speakers told stories of intimidation, desperation, loss of livelihood, insecure tenure and the sadness and shock of seeing their much loved and respected Richard Murphy being evicted. Richard had been their spokesperson, articulating professionally and calmly THEIR voices.

Most spoke of being crippled by high rents and as many as thirty businesses had to walk away as it was no longer financially viable to continue. Many of these people had paid many thousands of dollars for specific stall spaces, but were unable to sell out due to their inability to secure a long-term secure lease.

Would that be the social and economic benefits referred to in the above quote? No, economic benefit is a one way street and that street runs a truck load of money to the doors of the Murdoch kingdom.

Many of the stall holders have had their stalls downsized or relocated to inferior or inappropriate positions. New traders have been bought in and are in direct competition with others. Apart from massive rent hikes, many new administrative charges and costs have been introduced as well as some stalls having to re-equip or re-fit their shops.

Their grand vision and media hype about the ‘New Wednesday Growers Market’ contradicted their previous promises about trading hours. They grossly exaggerated its viability and it badly impacted on the rest of the markets. They talked it up with statements like ‘food from heaven’.

It ended up being a complete embarrassment and a total flop. It was a small, dark, dingy collection of trestle tables, selling nothing more than common grocery items. AS PREDICTED. The gourmet cheese and wine tastings were pathetic and the celebrity chef cooking school was akin to watching a bloke cooking a barby in any local picnic area.

Sadly, the twenty or so vendors who believed in the Murdoch propaganda have lost whatever costs they incurred and have become the new collateral damage at the Fremantle Markets. True to form, the Murdoch’s statement about the closure of the Wednesday market completely dismisses the abysmal failure and they were recently quoted as saying that it was “A successful trial”.

“Mr Murdoch, did you ever tell the press, the community or the vendors that the Wednesday growers market was a TRIAL?

Would you please define successful?

Your trial lasted about 6 weeks. Each week saw less customers and less stalls and finally it simply snuffed out. The traders have done their dough and you are in denial. I am not the first to say “I told you so,” nor will I be alone in saying Ha ha!

And now for your further edification, let me address your preposterous claims about local artists and craftspeople:

So far, you have lost most of the great crafts-people you already had. As they have pointed out, they can’t afford those rents. Also, most of the work they do is done from home in workshops. They might retail on the weekend but they work and create throughout the week. Your vision of having potters, ironworkers and artist working on site is simply another example of ignorance. Why not do the unthinkable and actually ASK those people what they require?

Let me give you just one example:

A potter works with wet clay. The wet clay takes days to dry and can not be moved or relocated – it is very fragile. The pieces then need to be baked in a big oven called a kiln. Do you expect a casual potter to bring down their wheel, tools and kiln each week or will they need to pay for a massive space and set up a permanent stall? My estimate is that such a potter would need to turn over a couple of thousand dollars a week just to cover the costs. How do they sell the pottery with their arms up to the elbow in mud?

Why not speak with a welder before you encourage ironwork on site. Ask a glassblower about trestle tables and Fremantle winds. Ask a dressmaker how she will fit, draft and sew a frock while serving her customers. I notice on one of the newsletters a suggestion to demonstrate sheep shearing. Now that’s probably worth serious consideration…

I know you will take offense at what I am saying. You will probably run this by the legal team. You seem to interpret constructive criticism as possible defamation, but wait and think…

You have forked out a bomb on market research, legal advice, advertising, additional office staff, security, evaluations, PR and loss of time in disputes and conflict. Your reputation is sullied and your working environment is toxic, hostile and stressful. Do the unthinkable – just listen and put the ego back in its cage for a minute.

I am not trying to attack you, I am simply pushing you to step up and be a leader. The Stall Holders are not employees; they are savvy, experienced business men and woman. Many have been trading successfully there for more than ten years. This in itself is evidence that they know their demographic and are catering to it.

Richard Murphy and Colin Wright have not been your enemies and have never tried to be adversarial or counter-productive. Both were elected to speak on behalf of the Stall Holders in view of fair treatment, market improvement and ongoing success. Both these men have been supported and endorsed by the collective. You have victimized and persecuted them!

Richard Murphy had one of the nicest and most patronised stalls in the market. Colin and Marilyn Wright's shop is arguably the best stall there; bringing regular repeat custom and they have over twenty years experience.

Mark Scott, Richard Murphy and Colin Wright have mentored so many and have acted freely and generously in holding a large section together; acting as spokes-people, settling disputes, supporting new traders and bringing competitors together to compliment each other.

These three men have sat and consoled crying and distressed stallholders, arbitrated and resolved conflicts, advised, supported, mentored, encouraged and advocated of their own accord; for no reasons other than decency and caring. Not one of them has been paid to do these things, but God only knows how much time, money and grief they have saved you in taking on this position. Most of this went unmentioned and certainly unrewarded.

These guys are worth a thousand Annie Meyers’ who seems to live in her ‘happy place’ and quotes facts and figures like little tom-thumb crackers. Is she there to feed you or is she just an apron to hide behind? We’ve all heard what she says, but what has she actually done?

I mention these three men specifically, but I also call your attention to the many that believed in you, supported you and championed your bid on the new lease. Without naming names, I remind you that you wiped the floor with them and continue to ruin them. Why?

There is a wealth of knowledge there from the front line and the common interest is to maintain and improve what works. The hay days of the market were the result of minimal interference from management. Every stall has a vested interest in doing well and to be successful; they need to know their business, their product and their customers. Why do you disregard knowledge and experience in favour of external market research or Annie’s magic wand and fairy bread or Tagliaferri’s self-interests?

Your need for control and structure is interfering with the natural ecology of the market. It has always been the eclectic mix that worked. Departmentalising the markets takes away the free flow and the leisurely browsing which encourages impulse buying. The markets are an exhibition or an entertainment - not a snatch and grab venue. Vendors used to compliment each other and feed off each other, but now you are creating competition and aggravation.

You need to encourage people to wander the full circuit, not direct them in and out in the shortest possible time. This is not a hardware store. This is also why the markets work as a week-end business and why other retail functions mid-week. You can’t have it both ways – stick with what works.

One of the best things about the way things were is that the blend of aromas and sounds created atmosphere. The smell of coffee beans led gently through to fresh bread and then incense or mangoes. Now with all the food being compressed you have garlic, sausage, fruit, ice-cream etc and everything fusing into an obnoxious stench.

The spaced music of the cd shop, the bar, buskers, meditation and other genres worked very well, but now there is an irritating din creating a stressful noise. Most of the excellent buskers are now outside the market and in the mall – no longer at Freo Markets.

You are pushing to exclude merchandise made in China or other such countries but your understanding on this is quite ignorant. China, India, Taiwan and other such countries are the manufacturing Mecca’s of the world. Most of your so called designer label products are imported from these countries. In recent years, most western manufacturing has gone offshore and it will continue to do so. Get real, be discerning and get yourself educated. Again, talk with the guys on the ground – you must.

Obviously the markets can do without tacky junk but you fail to understand that there is a huge demand for bargains; cheap T-shirts, sunglasses and $2 bits and pieces are as valid as anything else. No one goes the market to buy Vuitton or Prada. Do you have any idea about your demographic?

Closing down half the market on Friday evening is ludicrous. It’s one of the busiest trading times of the week. You don’t seem to fathom how embarrassing and insane that was. Chasing customers out of an establishment has never been written into the retail act, simply because, no retailer other than you, would have ever considered such a thing.

Retail 101 – Don’t yell at customers to F…Off.

Seriously, you have been pathetic, cruel and vindictive. Unless you get back into the drivers seat and work with the people who matter you will destroy the markets and be shamed out of town. No one wants you to fail and perhaps you don’t like the teacher, but at least be smart enough to learn the lesson.


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Look before you lease. What didn't they get?

Fremantle Markets Pty Ltd presentation to council Feb 26th 2008.
(Some of the questions raised by councillors prior to the lease being granted)

Summary of question asked by Cr Bill Massie: So the current stallholders are guaranteed security?

Summary of response from Jamie Murdoch They are guaranteed security under the working group and under the lease. The lawyer that the stallholders have engaged, there was a meeting that a couple of the Councillors went to prior to Christmas and the lawyer said that the stallholders will have more security under the new lease then the old lease. The new lease allows us to offer our stallholders a 5 year lease, with the opportunity for a 5 year option. We want our stallholders to continue, we have a database, as I said, of 200 stallholders who are all fantastic people. There are initiatives that we want to implement, so the 3 day a week markets stays but there are various sections of the market that can come alive on the Tuesday or a Wednesday or whenever to suit the various need that Lee and Anne have identified.

Summary of question asked by Cr Bill Massie: So the weekend market would not be forced into working 7 days?

Summary of response from Jamie Murdoch

No. We have gone through that process with the Thursday trial. These initiatives are just initiatives, to sit down and discuss and consider. )

Summary of question asked by Cr Les Lauder: In your presentation you showed a food court, is that towards the centre.

Summary of response from Jamie Murdoch

It is between the fruit and vegetable section and the main building. We think there is an ideal opportunity to explore having that as a food court, it's a good link between the Henderson street mall foot court, down the lane way and into a nice area under the tarpaulin before you get into the main heritage building. We think that could be created into some sort of food court and entertainment area, which is one idea that we have.

Summary of question asked by Cr Les Lauder: What would happen to the stallholders that are currently there?

Summary of response from Jamie Murdoch

They would be relocated to other places. These are purely ideas and we are going to
have to discuss them further. They have not been discussed with anybody outside of this room. We don't want to loose any stallholders, we want all the stallholders we have to come along.

Summary of question asked by Cr Les Lauder: But you said that the ones that will be displaced by the food court will be put elsewhere. I don't understand what would happen to the ones who are elsewhere now.

Summary of response from John Murdoch A lot of those stalls that are in that section, are casual stalls anyway, so they would be easily relocated to other casual spots and if it got turned into a food court, we would look after the stallholders that are there.

Summary of question asked by Cr Bill Massie: If you open 6 or 7 days a week, the current stallholders, are they going to be mobile or will they still have their positions?

Summary of response from Jamie Murdoch They will still have their position. The whole Market will still come alive on Friday, Saturday and Sunday. All stallholders are welcome to come along for the future of the Fremantle Markets for the next 20 years that the Council and the Working Group will govern, we are not precluding anyone. We have a database of 200 fantastic stallholders and we want to give them the opportunity to come along for the next 10-20 years.

Listed below are some of the concerns raised by stallholders at the time:
(on record - verbatim of some of the responses from those aware of the business plan)
- Have heard that the rents will be going up 10% market rent...if rents go up crafts people will not be able to afford the rent and I feel that $2 type shops would move in and change the markets.
-Only that rents remain at a fair and reasonable rate given that it is a market, markets are a low rent situation
-I'm concerned that not enough attention has been put into the size of rent increases that we can expect the new business plan. Rent increases need to be strictly controlled.
- Fee increases have occurred.
-They are putting up rents unnecessarily to squeeze people out and put more tenants in.
- Stop putting up rents.

Uncertainty about tenure:
- They are stripping the stallholders of all rights, they can ask you to leave or move your stall.
- No protection to stallholders
-Make sure that leaseholders rights are protected when it comes to resale of stalls
-Regarding relocation of our site or moving us out all together - I would like some clarification on this.
-Will they start anew and will we lose our current location.

Lack of involvement and representation of the stallholders association:
-Why is the stallholders association not recognised in this lease?
-We don't have a voice anymore, the association of the stallholders will be eradicated and not given a voice
-Meeting should be more open and not behind closed doors, it seems too buddy-buddy; you scratch my back. They are unprofessional and unapproachable. They should include a stallholders representative in all meetings.
-The stallholders association has not been mentioned in the new business plan.

And then the amazing quotes and promises from the Murdoch's;

At Fremantle Markets, we will create WA's gourmet heaven. A food retailing, entertainment and educational centre that will rival...

More efficient and effective use of the community asset,but retaining existing traditional 3 day trading market.

Commitment to continue to provide a low cost trading environment despite capital expenditure and trading initiatives

We support internal changes but only if space is used effectively, maximize stallholder/customer interaction. Number of stalls must not decrease.

To provide goods and services that exceed the shoppers expectations.
To provide quality, range,uniqueness and value for money
Develop range of local produce - uniquely West Australian
Goods handmade on site to encourage interactivity - glassblowers/metalworkers/pottery makers

In Summary:
We subsidise rents to make a low cost trading environment
We have the support of a large majority of stallholders
We have NEVER "sacked" a stallholder
In conclusion:
It's time to end the uncertainty
Time to allay stallholders' fears about the future
Time to give ratepayers a better return on their asset
Time to stop the bickering and let us get on with the job

Fremantle market breaches and council promises

Stallholders addess to Fremantle council 24th June 2009.

Council’s April Report identified a number of breaches to the Fremantle Markets head lease by the Murdoch’s. At last months Council meeting I emphasized the need to address the breaches as quickly as possible because the longer they drag on the more difficult it gets for many stallholders. We are therefore understandably concerned to find out that only one of the breaches is currently being addressed… the determination of “fair market rent” through an independent review.

Also as a result of the report and the upcoming review, you wrote to the Murdoch’s asking them to cease any further rent increases until the matter is resolved. They have defied you…. At the start of June the rents were increased. These increases were in the vicinity of 25%. Did you merely make this recommendation as an option or do you have the clout to follow through?

In respect to the enforcement of your authority, the council appears to be constrained by the head lease, vulnerable to the litigious nature of the Murdoch’s and lacking in power or recourse.

Another of the breaches which has also been flaunted since the April report is the Murdoch’s failure to hold the May quarterly Working Group meeting with stallholders. In the first year of this new lease only two of four, of these important meetings, have taken place and only one of these meeting was attended by a council officer. These meetings were devised as a way to expedite information between the Working Group and stallholders and also to substitute for not including a stallholder representative on the Working Group. They are also a farce.

So, we made a submission to council 3 months ago on how they could be improved, to produce tangible outcomes. We based this submission on discussions we had with the Adelaide Central and Queen Victoria Market management. To date we have heard nothing regarding our suggestions.

If these meetings had been taken seriously and conducted in accordance with the spirit and conditions of the Operating Strategy they may have helped to identify and overcome some of the issues we are currently facing. Glen…why has the Working Group ignored these meetings?

A fortnight ago the Stallholders Association initiated a meeting with the Murdoch’s in an attempt to recommence dialogue after a long period of silence between us. They said it wasn’t their responsibility to call a meeting with us. We have attempted to do this in the past and have also invited them to some of our Association meetings but they have declined. I’m telling you this so you know we are not uncooperative or opposed to constructive dialogue.

We were told then by Jamie another 20-30 stalls have now been identified as incompatible with the new direction for the Markets. What will happen to these stallholders? This is nothing short of culling; long term tenants are being sacrificed and families left financially devastated. This is not looking good and I can see more bad publicity coming from this.

It also became clear in that meeting that there is a major difference in perception between the Murdoch’s and the City. Prior to the lease being signed both Glen and the Mayor told stallholders “our businesses would be safe and we would all have security of tenure”. The problem with this undertaking was that it was either never clearly conveyed to the Murdoch’s, or if it was, they know, because they hold the “head lease”, they have ultimate control of the markets ... irrespective of the Working Group, the Operating Strategy or the City’s commitment to stallholders.

I want to make it clear to all the council that many of our members feel as if they were conned into supporting the Murdoch bid based on what council had said and what the Murdoch’s had told them. Addressing the “fair market rent” issue is one thing but council must take seriously the number of times that the Murdoch’s made apparent misrepresentations during the business plan and also the City’s role in creating this perception that our businesses would be safe. . …these are serious concerns for everyone.

At least half the councilors here tonight heard Glen make those commitments not once but twice at our Business Plan Meeting in December 07 at the South Fremantle Football Club. The safety and tenure of our businesses were always a major concern for stallholders during the lease negotiations and is the reason why on that evening Mark Scott asked Glen the same question twice. We wanted reassurance. …and you gave it to us…or so we thought.

Glen, you would be well aware of the emphasis we placed on this and also the “transition period” between the leases. In our public submission we said “Stallholders impacted by the turnover plan should be given a “transitional period” to allow them time to either reinvent their business or sell up and realize their “good will”. We also suggested these stallholders should have a right of appeal.”

Stallholders now question if the City has the will or commitment to address our plight. Most believe you will just batten down the hatches, ride it out and consider the stallholders who have had their lives turned upside down as “collateral damage”. Remember many of these small business owners have invested in the Markets and can see their savings and hard work evaporating… that’s not to mention the Richard Murphy’s and others who have lost everything.

Yesterday we met with the valuer undertaking the “independent rent review”. His terms of reference for that review have been prepared by Hotchkin Hanly, the Murdoch lawyer’s … Jackson Macdonald, the City’s lawyers did have input but it is unbelievable, with the rent issue being so contentious, the City would have followed this path. The stallholders and ratepayers want transparency and this seems to be a conflict of interest. The questions therefore are;
Did the City engage Hotchkin Hanly? Who determined the terms of reference? Why didn’t the City prepare this brief?

Most of you who want to wear the mayoral chains supported the Murdoch’s bid for the new lease. If there is a real Mayor in the room please step up now with a plan of action. It is up to all the councilors who backed the lease to make sure that what was in the business plan is followed through on. Don’t leave it up to the other councilors and please don’t insult us by suggesting the softly, softly approach will work. Unless you address the issues responsible for this debacle and put them right then you are only band aiding the sores…. It will be a never ending headache for the City.

Fremantle council has made a terrible blunder

Michael Willicombe wrote an interesting article in the Fremantle Herald this week. Michael, a former heritage planner with the council, says he fears Fremantle council has made a terrible blunder chasing the highest dollars at Fremantle Markets.

In part, he wrote: Either the council received bad legal advice when setting the lease up, had no clue what it was doing or it simply didn’t care.

What council seems to have failed to consider in its deliberations is the value of the character of the stalls existing in the markets.

I suspect that others, like me, don’t really care about getting ‘best ratepayer dollar value for the lease’ if it kills off local product and interesting stalls in the process. And for business in Fremantle generally, if the markets become as dull as other Perth markets that will hurt Fremantle across the board.

Better to care about enabling the long-running and existing diversity of stalls to survive rather than cast aside for cheap and cheerful, yet more profitable stalls. ‘Made in China’ will be an increasing sight in the markets I fear, maybe a stall in its own right!

It’s a crying shame and a black mark on the council. Let’s hope it serves to give the council pause for thought when reviewing other iconic property holdings such as Moore’s building and Gino’s, Dome and Kulcha.

Council’s job is to retain and enhance the character appeal of Fremantle as a whole and it is through its own property holding that it has the biggest responsibility to do this.

Reinstate Richard Murphy

In two weeks time a new operator will move into Richard Murphy’s Soap shop. That gives you just 14 days to right this wrong and have Richard reinstated. For 22 years he has been a wonderful asset to the Markets. This is no way to see his livelihood end.

Stallholders are devastated that this could happen. It seems as though you Mr. Tagliaferri and your Council have no control over what the Murdoch’s can do. You have tried to intervene on three occasions now to save Richard, but each time the Murdoch brothers refuse your requests.

A simple act of good faith in reconciliation would have been the appropriate course of action, but they are determined to remove Richard because, he has been a thorn in their side as Chairman of our Association. Tenants are allowed to join associations under the Retail
Shops Act and their principle role are to protect the interests of their members.

The content of tonight’s report and the Porter Matthews valuation strongly validates Richards stance and reinforces that he has acted professionally in alerting the council to the probable breaches of the head lease. Without Richard, this would not have happened.
Evicting him is ludicrous…

My two questions are to the Mayor.
1. Will you now move to have Richard reinstated immediately before his shop is occupied by another owner?
2. Will you now move to stop the signing of any agreements already issued and stop the issuing of any new agreements until the breaches are dealt with?

Letter to Mayor Tagliaferri re Freo Markets

FREMANTLE MARKETS
STALLHOLDERS ASSOCIATION (Inc)

Peter Tagliaferri
Mayor
The City of Fremantle
PO Box 807
Fremantle 6959
1st February 200

Dear Peter,
As you know the tenants at the Markets are gradually getting served with ridiculously high rent increases which are leaving most of them feeling sickened and sleep deprived. The recipients also feel bullied and intimidated by the demanding and threatening nature of the documents. It is obvious to us that morale of the stallholders is at an all time low and the jovial nature of the Markets stallholders is being sorely tested.

Fremantle Markets Pty Ltd (FMPL) recently presented a Marketing Plan to stallholders which contained the following information as a justification in support of their rental increases.

MARKETING
increase the average number of customers per weekend fromaround 40,000 to around 60,000 increase the average expenditure per customer as follows
fruit and vegetables – from $33 to $40 per visit
general merchandise – from $45 to $50 per visit

At a glance these figures may seem plausible but upon closer examination they are clearly erroneous.
According to the markets management, 40,000 people currently go through the markets each weekend.
If each person spent $40 then $1.6 million dollars would change hands - i.e. a weekend average turnover of $10,600 for each of the 150 stallholders or $550,000 pa. With the proposed increases in traffic and average spend to $45 this would in theory rise to $936,000 for each stallholder. The figures for both current average turnover and that projected are clearly ludicrous and bear no relationship to reality. Stallholders would be ecstatic if it were true and while undoubtedly some businesses are high turnover most are small owner operated family stalls with modest profits. The City must now be questioning their own head lease rental valuation of $550,000 when FMPL estimate this year’s annual stallholder’s turnover at $83 million.

It would be extremely interesting to discover on what survey information FMPL have established that current average expenditure is $33 for fruit and vegetables and $45 for general merchandise. To gain this information would require FMPL knowing the turnover of all the stallholders or have done extraordinarily detailed and costly customer surveys over a significant period of time.

We believe that David Paris from the Coffee Connection has contacted you with some relevant comparative information in relation to rental costs and traffic flow from some eastern states markets.
His research supports our belief that the rent increases will see Fremantle as the highest cost markets in Australia. This research and the ambitious marketing projections highlight the questionable quality of the information which has been used to justify the rent increases.

The Stallholders Association continues to question the validity and independence of the valuation used to establish “fair market rent” but accept that Fremantle Council has examined the valuation and endorsed it. Although the City increased the head rent by $60,000 or 12% (i.e. $400 per stall per annum), FMPL have passed on substantially greater increases. Some have already been over $7000, 18 times the increase in the head rent. . If FMPL continue to pursue their program and introduce unsustainable rental increases then the viability of many stalls will be brought into question. Many permanent stallholders who have signed an “Expression of Interest” are now reluctant to enter into new licence agreements and are evaluating their profitability. The number of stallholders genuinely contemplating leaving is alarming. A large number would like to sell but the current value and price of stalls has been eroded by the rent rises.

Through our lawyers we have offered to meet and negotiate the rent increases and the amendments to our Rules with FMPL but to no avail.

We would also like to raise the issue of the allocation of agreements to permanent stallholders. Throughout the head lease negotiations both yourself and Glen Dougall addressed stallholders at meetings and reassured them that “all stallholders” would be offered an agreement. It has come to our attention that one of our members has not been offered a new agreement and has been given a termination notice instead. Jamie Murdoch told the December “Working Group” meeting with stallholders, which Glen attended, that up to 10% of stallholders would not be offered agreements.
At this stage approximately only 40% of permanent stallholder agreements have been issued. This deviation from council’s position has our members concerned and we seek clarity as to where we stand.


The Stallholder’s Association is seriously concerned for the future of the current stallholders and the erosion of confidence in the trading environment at the markets especially in light of the present world economic situation. FMPL’s actions would appear ill conceived when leaders in industry and government across the country are calling for restraint and at the same time stallholders are subjected to rent increases far in excess of reasonable.

To date we have sought to redress this draconian treatment of stallholders and the imposition of unjustifiable rental increases by discussion and negotiation, however if this continues to be unsuccessful we are concerned that some stallholders will initiate more damaging media coverage on television and in the press.

We would like to meet with you and Graeme Mackenzie at your earliest convenience to discuss these and other issues pertinent to the future of the markets.


Yours sincerely,

Colin Wright
Secretary
Fremantle Markets Stallholders Association.



Cc: Graeme Mackenzie
Glen Dougall


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