From one repair job at Virgin Australia to Endeavour Group, Jayne Hrdlicka’s big job ahead at drinks empire

After flying Virgin Australia out of administration and readying it for landing back on the share market, experts say Jayne Hrdlicka has the proven track record to engineer a turnaround at embattled hospitality giant Endeavour.

Ms Hrdlicka has been consulting the company — behind Dan Murphy’s, BWS and hundreds of local pubs nationally — two days a week since her appointment in April but is set to formally take over as managing director on Thursday.

Among Endeavour’s pain points that need solving are — according to retail expert Trent Rigby — sluggish sales as value-conscious consumers suffer through a prolonged cost-of-living crisis, the changing behaviours of drinkers and a falling share price.

The $6.6 billion company is also facing a costly exercise to separate its technology systems from Woolworths. It’s been nearly five years since Endeavour was spun out of the grocer’s liquor division to list on the Australian Securities Exchange in mid-2021, and it is still reliant on it former parent’s systems, including inventory management.

“Jayne’s track record is turning things around, simplifying complexity and getting commercial discipline back into the system,” Mr Rigby, director at Retail Customer Advisory, said.

“She steered Virgin from administration to profitability. Virgin under her became lean, focused, execution-tight — and that’s exactly the kind of operating reset Endeavour could use.”

By the time of her departure in March this year, Ms Hrdlicka had led Virgin from a COVID-19 collapse in November 2020 to a profitable business under white knight owner US private equity Bain Capital.

Wilson Asset Management senior investment analyst Hailey Kim said liquor as a category was in decline amid intense competition in the industry that also counts Coles, which operates the Liquorland banner, and Metcash, supplier to Cellarbrations, The Bottle-O and IGA Liquor, among its players.

Ms Kim said while Endeavour’s hotels division was performing relatively well, it awaited clarity on the new strategy under Ms Hrdlicka.

“Despite these headwinds, Endeavour has strong household brands and a national store network that could be better leveraged to unlock full top-line and earnings potentials,” she said.

“With a clear strategy focused on simplification, customer-led repositioning, and more disciplined cost and capital allocation, we expect Jayne to reinvigorate earnings growth by leveraging the group’s scale more effectively.”

Endeavour declined The West Australian’s request to interview Ms Hrdlicka ahead of her full-time appointment.

Sales at the group’s 1728 Dan Murphy’s and BWS stores fell one per cent in the first quarter, with the boost from key sporting events, like the AFL Grand Final, not enough to offset subdued consumer spending.

Similarly, Coles said liquor store sales fell 1.1 per cent over the same period.

Endeavour and Coles Liquor are grappling with declining alcohol consumption as consumers, particularly younger Australians, cut back on discretionary spending and drink less for health reasons.

In a highly competitive market, Mr Rigby said there needed to be a “sharper differentiation” between BWS and Dan Murphy’s if Endeavour wanted to “pull away from the pack”.

He reckons BWS should lean into convenience and value, while Dan Murphy’s focus on becoming more “discovery-led, more premium and more of an occasion drink destination”.

The “other big unlock” for him is improving the in-store experience for customers, like free tastings and events.

“We talk a lot about ‘experiential’ retail in a lot of categories across retail, but not necessarily liquor,” Mr Rigby said.

“Buying a bottle of alcohol should feel more like an experience, not just a transaction.”

Endeavour listed at $6.50 a share but the stock has since fallen to $3.68 on Monday, partly due to management turmoil that at one stage left the business without a permanent chief executive or chair

The company earlier this year was slammed as “rudderless” after executive chair Ari Mervis called it quits, citing disagreements with the board.

Mr Mervis took the reins at Endeavour after the exit of managing director Steve Donohue in March this year and is expected to hand over day-to-day management to Ms Hrdlicka.

Meanwhile, lead independent director Duncan Makeig has assumed the role of interim chair while the board searches for a permanent replacement for Mr Mervis.

Endeavour chief financial officer Kate Beattie has been running the group as interim chief executive until Ms Hrdlicka takes over.

“The immediate job (for Ms Hrdlicka) would be restoring investor confidence — tighten the narrative, give the market milestones, show early proof points and let that rebuild belief,” Mr Rigby said.