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30 YEARS OLD – AND BOOMING! While Jaycar is now the dominant electronic parts retailer in Australia it had very small beginnings, 30 years ago. Since then it has grown from a single run-down store in a virtual dungeon in a Sydney lane to an operation with 72 stores (and climbing) and employing over 1100 people in Australia, New Zealand and elsewhere. Leo Simpson recently sat down with the owner, Gary Johnston, to chew the fat and review some of the high points. J ust over 30 years ago, Dick Smith Electronics was blazing the way and showing how kits and electronic parts should be retailed. Gary Johnston, one of the key men in Dick Smith’s management team was doing very nicely. Then in around 1980 it all changed, with Dick deciding to sell to Woolworths for a very good price. At that stage though, Dick Smith Electronics had only 18 stores and about 34 country dealers. It has grown enormously since then, of course, to the giant we know today. But that sale left Gary Johnston feeling that he should move on. In early 1981 Dick Smith put a newspaper clipping from the “Businesses for Sale” section of the Sydney Morning Herald on Gary Johnston’s desk, concerning a tinpot electronics shop in Sydney’s Sussex Street – John Carr & Co – with a view to possibly acquiring its stock and maybe the whole business. Subsequently, it was thoroughly assessed by Gary Johnston and DSE’s General Manager, Ike Bain. Both concluded that the business was positively Dickensian – and not a proposition for Dick Smith Electronics because it would require too much hassle and work to make it worthwhile. There was an enormous Not the first Jaycar store (they didn’t even have a camera!) but the second, in York St, Sydney in 1982 – together with the entire Jaycar company “fleet”. 42  Silicon Chip Gary Johnston in his office at Rydalmere. His desk isn’t always this cluttered – he claims he cleaned it up especially for our visit . . . inventory of quite obscure stock which hadn’t moved in years and was unlikely to ever do so. (What do you do with several thousand radio tuner dial drums?) So Gary Johnston decided to make the jump from his very safe and well-paid position at DSE and go out on his own. And what a huge jump it turned out to be. He bought John Carr & Co (including all that stock) and changed the name to a much more “marketable” Jaycar. As Gary himself admits, he had no idea or expectation that the business would grow to the size that it is today. He was just going to give it a go! Gary’s initial strategy was to do as much as he could to not directly compete with Dick Smith Electronics – he did not want to be crushed by them! To do so, he concentrated on some of the bigger and more complex kits and he was helped in that regard because he inherited some projects from John Carr & Co, such as the ETI 4600 synthesiser (which was such a poor seller due to the amount of parts needed, that he liquidated the stock). siliconchip.com.au Compare the catalogs! Jaycar’s first effort from 1981 (great for the time!) with this year’s 508-page behemoth. You should find a free copy with this issue of SILICON CHIP – if not, someone’s beaten you to it! But about the same time, ETI produced the very popular ETI 5000 amplifier by David Tillbrook. Jaycar promoted it heavily with a “blue-printed” version. They were pretty adept at marketing – and they still are. Gary freely admits he learned a lot from a certain “guru” at DSE! The mention of the Jaycar name should also be explained. John Carr & Co had already registered the name Jaycar many years previously but it did not begin trading under that name until March 2nd, 1981, under Gary’s stewardship. Jaycar then was launched to the world, with plenty of advertising in Electronics Australia magazine. Jaycar also got involved with ambitious projects of its own, such as the electronic piano featured in the same magazine. Gary brought enormous energy to the business and only a year later he moved to York Street, Sydney, and in the process acquired Electronics Agencies, who also had premises at Concord, in Sydney. This gave Jaycar the agency for the popular Microbee computer (produced by Owen Hill’s Applied Technology), a few key staff such as Bruce Routley, and the ability to produce an annual catalog. By 1984 Jaycar had five stores and about 20 employees. In 1987, Jaycar opened their first Melbourne store, in A’Beckett Street. Needless to say, it went like a rocket. Shortly after, they opened in Springvale. So they kept opening stores – and growing like wildfire. By the mid-1990s, they had 12 stores and a large warehouse at Leeds Street, in Rhodes (Sydney). By that time Jaycar was also becoming a recognised brandname for electronic componentry and all the stuff used by technicians and enthusiasts. More regional and country stores were buying from the wholesale division, Jaycar Wholesale. Gary wanted a new name for the wholesale operation and something that would not be seen to have a particular meaning. It used to irk him that some people thought that Jaycar was a car parts business! This was during a federal election and his gardener came up with the name “ElectMe”. Gary thought that was good but then he changed it to “Elect Us” and that’s how the name Electus Distribution came into being. And you thought it had something to do with electronics or electrical – didn’t siliconchip.com.au you? At the same time, a general manager was appointed to oversee the whole business and the target was to grow it into a $100 million company (sales per annum) within the next few years. Suffice to say, that target was exceeded quite some time ago. To go back to the car analogy, Jaycar has been accelerating ever since! Painfully aware of the fact that they had massively outgrown their Rhodes warehouse, Gary searched for suitable premises. Dick Smith even suggested that Gary might consider the nowempty former DSE headquarters at North Ryde. But Gary had to say “sorry, Dick, it doesn’t work. It’s much too small!”. The Jaycar/Electus operation moved to a very much larger complex in Silverwater . . . where it lasted only a few years before once again, they were out of space. They then bought the current head office and warehouse complex at Rydalmere. Again dramatically larger than Silverwater, they’ve only been there a couple of years – but already, Gary is eyeing off nearby properties to cope with yet more expansion. Along the way, they acquired Soanar Electronics, a large supplier of semiconductors and other OEM components from the Dutch multinational, Hagemeyer NV. Since then, that business has also grown considerably and also has offices in several countries in Asia. Together with all the growth, Jaycar and Electus Distribution have become very professional in their entire operation, with every aspect of the business having defined procedures. McDonalds is known for their professional operation – Jaycar is run along similar lines. Gary Johnston and Jaycar have also developed strong ties with the University of New South Wales and in particular with their solar panel research. In 2006, he donated $1 million to create Australia’s first chair of Water Management, headed by Professor Ian Acworth. This is in line with Gary’s desire to see a much greater understanding of Australia’s entire water resources, including its river and aquifers. And the future? The Jaycar group will continue to grow and new management appointments have recently been made, including the promotion of long-time marketing manager Toni Martin (a qualified engineer) to the position of CEO. At present, Jaycar have some 72 stores and over 1100 employees spread throughout Australia and New Zealand and offices in Asia. A big challenge is to grow all aspects of the business, including online operations in Europe, USA and in fact, the world. Who knows how big it might be in another 30 years’ time! SC About those “rumours” . . . Every so often, we hear (or see) claims to the effect that Jaycar Electronics owns SILICON CHIP, or vice versa (we wish!) – or that one has a financial interest in the other. It’s often repeated on internet newsgroups or other Pope-like sources of infallible information. “A friend of my cousin’s aunty works for Jaycar and he told me that . . .” or “I know for a fact that Gary Johnston helped Leo Simpson start SILICON CHIP and that’s why they always have the centre of the magazine for their advertising . . .” Or somesuch other claim (we’ve heard them all!). Let’s state here and categorically: SILICON CHIP and Jaycar Electronics have NO financial interest of any description in each other. And never have had! Sure, the companies ocasionally work together to develop projects and Jaycar is our largest advertiser. But that is it! May 2011  43