Wednesday, 18 April 2018 11:01

MGM seals deal with Telstra franchises to sell kids Spacetalk smartphone watch

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Technology company MGM Wireless has launched a new family wearables division with the signing of two Telstra Shops franchises to retail its Spacetalk children’s all-in-one smartphone, watch and GPS wearable device.

MGM says the bricks and mortar rollout follows strong and growing online sales from its allmytribe IoT website, with sales for the month of March reaching 82% of the pre-Christmas sales levels achieved in December 2017.

The deal coincides with MGM’s announcement that it will meet demand for the Spacetalk kids’ smartphone watch device through a capital raising of up to $1.5 million via a placement to  institutional investors and existing shareholders via a Share Purchase Plan.

The capital raise includes institutional placement of 750,000 fully paid ordinary shares at $1.00 per share to raise $750,000, which closed oversubscribed.

MGM says the capital raise will be used to fund orders placed with key manufacturers to support new bricks and mortar sales channels, fund new executive hires and an expansion of marketing programmes.

According to MGM, the Telstra Shops franchise deal will see Spacetalk become the first all-in-one kids’ smartphone watch to be sold by a leading retailer in Australia.

MGM Wireless chief executive and executive chairman Mark Fortunatow said that the company had expanded its wearables executive management team with the hire of Mandy Lee, a highly experienced and well-known consumer electronics and mobile phone retail expert, to support the first Telstra Shop rollout, and to manage the “strong interest from other leading Australian electronics retailers and mobile network operators”.

Lee has been appointed as national sales manager for Spacetalk. Her previous experience includes senior sales roles for Vita Group (Telstra Shop Franchisee with 100 stores), JB HiFi, Microsoft, Blackberry and Motorola.

“Our Spacetalk kids smartphone, watch and GPS tracker is a new type of device that encompasses several product categories, namely mobile phone, wearables, accessories and mobile accessories,” Fortunatow said.

“Because it’s such a new and novel device, there’s a lot to learn about how to best retail the product. We’ve decided to start our bricks and mortar sales channel with 2 Telstra Franchisee Groups. Working with these retailers, we’ll learn how to best achieve pull through sales, what type of point-of-sale collateral to develop, design the right in-store staff training programs and roll out the right marketing support programmes.

“With that knowledge under our belts, we’ll then roll out more bricks and mortar locations and retailers.”

Fortunatow says the locations of the Telstra Shops were selected based on the strong on-line sales achieved by the company in surrounding areas.

“The agreements with the Telstra Shop Franchisee Groups are on industry-standard wholesale commercial terms and margins, except that after the first six weeks, if the Franchisee chooses not to continue selling the watches, the company will refund the cost of any unsold inventory. At this stage, it would be premature to forecast the likely sales volumes.”

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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