Blundstone could be next in bush brand battle between Andrew ‘Twiggy’ Forrest and Gina Rinehart

Is this famous boot brand the next purchase for Gina or Twiggy? An insider has predicted what rural outfitter may be next for the famous cattle barons.

Australia’s most famous billionaires have snapped up three iconic rural outfitters in the past month, and they’re not done shopping yet.

That’s the inside word from company sources and a well-connected investment banker.

Gina Rinehart’s December takeovers of Rossi Boots and oilskin coat brand Driza-Bone, bought for undisclosed sums, left many wondering what’s next for the cattle baron.

S. Kidman and Co CEO Adam Giles with Gina Rinehart, who has bought Driza-bone and Rossi Boots.

Two weeks before Rinehart’s spending spree, Andrew and Nicola Forrest added NSW hat maker Akubra to their Tattarang portfolio, to complement Outback clothing brand RM Williams, which they bought in 2020.

When asked if S. Kidman and Co was going to bid for other iconic outfitters, CEO Adam Giles would only say: “watch this space”.

Leading agribusiness adviser and corporate deal-maker David Williams says the Akubra-RM Williams and Driza-bone-Rossi deals are savvy investments, and both billionaires are likely planning more.

“If I’m making a prediction for next year, it’s that somebody will take over Blundstone; Gina will expand retail; and both groups will supercharge cross-selling,” Mr Williams said.

He said he expected the business moguls to leverage their stables of famous Australian brands, but “RM lost a golden opportunity to have Pip Courtney in RM stores signing Akubras in the run-up to Christmas”.

David Williams at his office with his Akubra. Picture: Yuri Kouzmin

On Blundstone, Williams said: “It’s a Tasmanian company that has been around forever. But what they do that RM Williams does not do is get their boots made offshore.”

He said rural Australian outfitters had huge profit potential, even in this age of rationalised consumer spending.

“The biggest trophies to have in consumer products are iconic brands,” Mr Williams said. “The acquisitions are a bit like what Bega did with Vegemite.”

Mr Williams advised Bega in its deal to acquire Vegemite and other brands for $450 million from global food company Mondelez in 2017.

“One of the beautiful things about iconic brands is that they tend to have more stable prices and less resistance to price increases than other products” Mr Williams said. “In other words, you get more stable earnings than with other products. This is true of Vegemite, Penfolds Grange and RM Williams.

“Owners get a gold medal from consumers and investors for owning the brands and developing them. But you get less volatility and more upside in terms of your revenue and your profits.”

He said the Forrests’ and Rinehart’s “undeniably deep pockets” would underpin the brands’ success and what needed to be done to grow them.

“I don’t look at them as great managers or starters of businesses,” Mr Williams said. “But what they are good at is taking existing businesses with existing profits and putting serious capital behind expanding the brands.”

RM Williams posted strong profits of $36.8 million in 2022, after the Forrests’ takeover. Mr Williams said the business had continued to be enormously successful, and adding Akubra offered incremental sales and true cross-selling synergies.

“Australia does not do super premium brands well,” he said. “All we have is Grange on the world stage. RM, Akubra, and Driza-bone should be, and will be our Fendi, L’Oreal and Latour.”

An RM Williams store at Smith Street. Picture: Pema Tamang Pakhrin

He sees international expansion as a next lucrative step.

“On the back of the diaphora, with the boots and the clothes, we have a fantastic beach head to take the brands into international markets,” he said. “Put a pair of RM boots on Taylor Swift, and you’ll sell a million pairs of boots. And ditto the apparel. There is a lesson here in what Treasury Wine Estates just did with Snoop Dogg and 19 Crimes wines.”

He said the billionaires should be looking to capitalise on female consumers, product extensions and brand partnerships.

“ (Tattarang) has a lot to be done in bringing Akubra and RM Williams together,” he said. “One plus one really does equal three in this combination.”

In the current climate of spiralling onshore manufacturing costs, it remains to be seen if RM Williams, Akubra and Rossi’s homemade credentials will continue to tempt buyers to pay a premium.

“When you ask the question, ‘Would people buy an RM if they knew it was made in China?’, the answer is probably yes, but the super-premium tag will suffer,” Mr Williams said.

“Consumers will pay more if they know RMs are made here and the brand and pricing will be stronger.”

He said Tattarang’s retail expansion was a winning formula that S. Kidman and Co should examine closely.

“If I was Gina, I would put a Driza-bone shop right next to every RM Williams store in Australia. And I would sell Rossis through it and add Blundstone to the offering.

“The shops would be complimentary as I don’t see the three boot brands as being competitive.

“No self-respecting Australian should be without a pair of Rossi or Blundstones, and several pairs of RMs.”