The Warehouse Group

"The Warehouse" redirects here. For other uses, see Warehouse (disambiguation).
The Warehouse Group[1]
Public
Traded as NZX: WHS
Industry Retail (department & discount)
Founded North Shore, New Zealand, 1982 (Store); 34 years ago
1991 (Group); 25 years ago
Headquarters North Shore, New Zealand
Key people
  • Founder: stephrn tondall
  • CEO: Simon Turner
Revenue Decrease NZ$1,735,030,000 (2007–08)[2]
Decrease NZ$134,687,000 (2007–08)[2]
Profit Decrease NZ$90,769,000 (2007–08)[2]
Total assets NZ$654,937,000 (2007–08)[2]
Total equity NZ$334,656,000 (2007–08)[2]
Owner
Number of employees
 12,000 [3]
Divisions
  • Group Sourcing Support
  • Insight Traders
  • Schooltex
  • International Brands
  • CES
  • Big Bucket Deals
  • Third Party Sourcing
  • SRO & HK Sourcing
  • Bargin Sourcing

[4][5]

Slogan "Where Everyone Gets A Bargain"
Website www.thewarehouse.co.nz

The Warehouse Group Limited officially stylized as TW Group,[1] founded by Stephen Tindall in 1982, is the largest retail group operating in New Zealand. The Warehouse Group (TW Group) is a group that consists of The Warehouse, Warehouse Stationery, Noel Leeming, Warehouse Group Financial Services and Torpedo7 Group.

History

"The Warehouse" logo used up to 2006. No stores in New Zealand use this version anymore. All stores in Australia used this logo until they were renamed in 2008.

Business

The Warehouse operates discount retail department stores selling a broad range of non-grocery and grocery products. As of January 2015, The Warehouse employed over 12,000 people in New Zealand.[3] The Warehouse's corporate headquarters are located in North Shore, New Zealand.

Apart from its 242 retail locations, it operates 2 distribution centres located in Wiri, New Zealand and in Rolleston, New Zealand as well as 12 online stores.[3]

In addition to its own operations, it also owns various brand names that are located within the stores. It has gardening facilities located in Auckland, Hamilton and in Christchurch. Along with its gardening brand Just, it also operates nearly 30 "in-company" brands.

The Warehouse is publicly traded on the New Zealand Stock Exchange with the security code WHS (TWH was used previously).[15]

Competition

The Warehouse's chief competitors in the national retail scene include Farmers (lowscale department stores), Kmart (discount department stores) the Briscoes Group (discounted sports and homeware store chains) and Super Cheap Auto (automotive products).

Criticism

The Warehouse has been criticised for poor products and has had product recalls of items they exclusively sell. A recent example is a brand of cycle helmets sold at The Warehouse that had the insulation detach from the shell of the helmet. As a result, all helmets were recalled and customers who purchased these helmets asked to return for a refund.[16][17]

More recently The Warehouse was blamed for the closure of Sounds Music stores as well as illegal downloading of music.[18] The management of The Warehouse dispute these claims.

In May 2007 to mark the 25th Birthday of The Warehouse the company released 13,000 balloons from Dairy Flat. This sparked concerns from the Department of Conservation and other environmentalists as the balloons have been known to endanger wildlife.[7][8]

In December 2007 a Whangarei woman lost her job at The Warehouse after leaving the comment on her Bebo page saying "work sux" and that having to work to midnight was "gay like the management."[19]

In December 2009 it was announced that The Warehouse staff would be taking industrial action due to issues with staff having their hours extended to 50 hour weeks in the lead up to Christmas and staff having to work late at night.[20]

Return Policy

The company operates a comprehensive returns policy. A "money back guarantee" policy (returns accepted for any reason) is available on most products, excluding underwear, pre-recorded media and perishable products. Some industry observers believe this is why The Warehouse has been so popular in New Zealand. This concept has not worked in Australia, particularly due to the fact that there are many other more well-established department store chains (K-Mart, Target, Big W). Australian stores no longer advertise a "money back guarantee." In late 2005, The Warehouse Group announced its decision to close its Australian arm.[21]

Australian operation

In 2000, the company entered the Australian retail market. It acquired the Clint's Crazy Bargains and Silly Solly's retail chains. At the time of purchase, those chains had around 117 stores.[22]

In 2003 the company built a $33 million (AUD) distribution centre in Queensland, to service the country. Later that year, the company introduced its Tui and Tolas inventory management systems from New Zealand.

As of 2005, the Australian arm was still under-performing. Sales for 2005 were at $518.8 million (AUD), compared with $567.3 million (AUD) in 2004. The Warehouse Group Limited announced in November, 2005 that it had entered into a conditional agreement to sell The Warehouse Australia business to Catalyst Investment Managers and its parent PPM Capital Limited (together, Catalyst) and Castle Harlan Australian Mezzanine Partners, acting on behalf of the CHAMP I and CHAMP II funds (CHAMP) for A$92 million (NZ$99m). The new entity was known as Australian Discount Retail (ADR). As part of the transaction, The Warehouse Australia's Sydney Head Office would be sold to Investec Wentworth Specialised Property Trust. While the effective date for the transaction was to be 27 November 2005, completion of the sale was expected in early 2006 and was subject to normal regulatory approvals.

At its formation ADR also purchased the discount store operations of Miller's Retail, including the Go-Lo, Crazy Clark's and Chickenfeed (Tasmania) chains. There were 335 such stores at the time of sale.

After the sale of the Australian operation, Warehouse stores were renamed Sam's Warehouse.[23]

Hypermarkets

In June 2006, "The Warehouse Extra" opened at Sylvia Park, Auckland. It was the first of a planned chain of hypermarkets, at 135,000 sq ft (12,500 sq m). In a similar fashion to the Wal-Mart Supercenters of the United States, the foodmarket department aisles are placed at a perpendicular angle to the general merchandise. It is the first store to feature an in-store bakery, pharmacy and cafe, and instead of the usual tall industrial shelving, a more conventional store shelving system has been used. The store also features a lot less red than in traditional stores, but the familiar concrete floor still exists. The next branches of "The Warehouse Extra" were in Whangarei and Te Rapa in Hamilton. In October 2008 The Warehouse announced that they will be canning "The Warehouse Extra" format with stores reverting to the more traditional style of store coming months.[9] There were four of The Warehouse Extra in Auckland (Albany, Manukau, Sylvia Park and Westgate). Today "The Warehouse Extra" brand is used on larger traditional stores nationwide, with many existing large stores have taken on "The Warehouse Extra" branding such as those in Lyall Bay (Wellington), Riccarton (Christchurch), South Dunedin and Palmerston North. Stores carrying "The Warehouse Extra" brand are typically larger, open later and carry a greater range than regular stores.

Street view of Mosgiel's Warehouse Local store.

The Warehouse Local

On Thursday 23 July 2009, The Warehouse Group opened the first of its smaller-concept stores, The Warehouse Local, in Mosgiel. These stores are approximately 2000 square metres in size, compared with the usual 5000 square meters seen in larger locations. These stores also have single checkout counters, doing without dedicated Service, Jewellery and Entertainment counters which are present in most other stores. Another 3 stores are intended to be launched per year, following this concept, over the next five years.[10] This will give The Warehouse a chance to have market domination in smaller towns as well as the larger towns and cities in New Zealand. While the "Local" naming is no longer used, smaller stores in Rolleston and St Lukes have opened using the smaller format.

Subsidiaries

The Warehouse Group currently owns five flagship subsidiaries.[5]

"The Warehouse" logo

The Warehouse

The flagship store for the Group; founded in 1982 by Sir Stephen Tindall. The Warehouse sells items of essential use. For example, clothing, sport equipment, gardening equipment, furniture, and so on. As a result of their branding and the distinctive colour of their buildings, The Warehouse's stores are colloquially known both within the organisation and within New Zealand in general as "Red sheds".

The current "Warehouse Stationery" logo

Warehouse Stationery

Warehouse Stationery is a retail store that sells stationery, computers, printers, computer/office products and some mobile products.

Torpedo7 Group

Torpedo7 is a Multi-Channel subsidiary that own and run online stores Torpedo7, 1-day, Number One Fitness, Shotgun.co.nz, and R&R Sport. Based in Hamilton, New Zealand, Torpedo7 was founded in 2004 by mountain bike enthusiast Luke Howard-Willis. In October 2014, Torpedo7 joined forces with R&R Sport – New Zealand’s leading outdoor retailer in the bricks and mortar space. R&R Sport was founded in 1981 in Dunedin as Recycled Recreation, a store specialising in second hand sports gear.[24] According to the 2014 Annual Report, TW Group has a shareholding of 80% in Torpedo7 Group as of March 2014. TW Group previously held a 51% stake in Torpedo7 Group.

The Warehouse Group Financial Services Limited

The Warehouse Group Financial Services Limited is a joint venture that was formed in 2001 following the joint acquisition of Diners Club New Zealand by The Warehouse Group and Westpac Banking Corporation.

The Warehouse Group Financial Services Limited provides consumer credit cards and insurance through The Warehouse brand and distribution channels.[5][25] In the 2014 Annual Report, it is stated that The Group holds a 49% minority share in this financial arm of TW Group with Westpac holding a 51% majority share.[26]

On the 1st of October 2015 TW Group announced the acquisition of the remaining 51% of TW Group Financial Services from Westpac. The acquisition cost $7.3 million (NZD). Later in the release TW Group also announce their plans to expand the unit not by acquisition but by internal expansion. [27]

"Noel Leeming" logo since 2014

Noel Leeming Group Limited

Noel Leeming is a retail electronics store. The Warehouse Group has acquired Noel Leeming Group from Gresham Private Equity effective from the 10th December 2012. Noel Leeming Group acquired Maclean Technology in December 2013, an experienced team that deliver specialist professional IT services to New Zealand companies.[28]

Waikato Valley Chocolates

According to the 2014 Annual Report, TW Group owns 50% of Waikato based confectionery company, Waikato Valley Chocolates.[29]

Store counts

According to the 2014 Annual Report, TW Group has,

Financial results

The Warehouse went public in 1995. Since then the stock has climbed from $1.29 to $5.54 in 2005 then to $2.605 as of the 8th of January 2015. During 2005, the stock dropped dramatically due to worse than expected results from the Australian operation.[30]

However, the company has not been without success. It is New Zealand's largest retailer and one of the largest companies in New Zealand in terms of annual revenue. It is well ahead of its nearest compeititors Briscoes and Farmers in terms of sales. Various different explanations have been offered for this:

Statistics

Retail operations

The Warehouse operates 3 major formats under 3 different divisions:

Board of Directors

Name Position Appointed
Stephen Tindall Founder of The Warhouse 10 June 1994
Mark Powell Group Chief Executive Officer May 2011
Eduard Van Arkel Chairman 1 July 2011
Kieth Raymond Smith Deputy Chairman 10 June 1994
Anthony Balfour Independent Non-Executive Director 15 October 2012
James Harold Ogden Independent Non-Executive Director 4 August 2009
John Journee Independent Non-Executive Director 17 October 2013
Vanessa Stoddart Independent Non-Executive Director 17 October 2013

References

  1. 1 2 http://www.interest.co.nz/business/68841/warehouse-buying-diners-club-business-nz-part-ambitious-plans-run-financing-arm
  2. 1 2 3 4 5 "The Warehouse 2008 Annual Report" (PDF). 27 July 2008. Retrieved 2009-04-15.
  3. 1 2 3 4 http://www.twg.co.nz/history/
  4. ↑ http://www.twg.co.nz/userfiles/image/8d57c3f3-e2e0-4f3d-8b10-8b1f5a636f91-original.png
  5. 1 2 3 4 http://www.twg.co.nz/our-brands/
  6. ↑ Chan, Karen (2005-12-11). "Yellow Sheds sale could fetch $90 million". The New Zealand Herald. Retrieved 2007-04-27.
  7. 1 2 Gregory, Angela (2007-05-10). "Warehouse balloons raise wrath of wildlife supporters". The New Zealand Herald. Retrieved 2007-06-02.
  8. 1 2 Gregory, Angela (2007-05-24). "Warehouse balloons tint Great Barrier Island red". The New Zealand Herald. Retrieved 2007-06-02.
  9. 1 2 "The Warehouse to can Extra stores". TVNZ. 2008-10-09. Retrieved 2008-10-09.
  10. 1 2 "Mosgiel Warehouse gets shopper approval". Otago Daily Times. 2009-07-24. Retrieved 2009-07-24.
  11. ↑ "Gisborne's latest News, Sport, Family Notices, Photos and Events". The Gisborne Herald. Retrieved 2012-11-07.
  12. ↑ "Warehouse buys Noel Leeming chain for $65m". NZ Herald. December 7, 2012.
  13. ↑ "Warehouse hopes Noel Leeming a bargain". 3 News NZ. December 11, 2012.
  14. ↑ Diners Club NZ sold to TW Group
  15. ↑ "Warehouse founder wants to buy all Red Sheds". The New Zealand Herald. 2006-09-14. Retrieved 2007-04-27.
  16. ↑ "Dangerous Helmets". Campbell Live (TV3). 2007-06-07.
  17. ↑ "Consumer Calls For Cycle Helmet Recall". newswire.co.nz. 2007-06-07. External link in |publisher= (help)
  18. ↑
  19. ↑ "Work comment "sux"". Newstalk ZB. 2007-12-19.
  20. ↑ "Warehouse staff to strike". NZ Herald. 2009-12-02.
  21. ↑ "Warehouse keeps options open on Millers". The New Zealand Herald. 2005-09-15. Retrieved 2007-04-27.
  22. ↑ "Australian Business & World Finance News - Yahoo!7 Finance". Au.biz.yahoo.com. Retrieved 2012-11-07.
  23. ↑ "Coming Soon: Sam's Warehouse".
  24. ↑ http://www.torpedo7.co.nz/content/aboutus.html
  25. ↑ https://www.dinersclub.co.nz/about
  26. ↑ http://www.twg.co.nz/company-reports/2014-Annual-Report/
  27. ↑ http://www.nzherald.co.nz/the-warehouse-group/news/article.cfm?o_id=216&objectid=11521648
  28. ↑ https://www.noelleeminggroup.co.nz/aboutus.html
  29. ↑ www.twg.co.nz/company-reports/2014-Annual-Report/
  30. ↑ Chan, Karen (10 September 2005). "Aussie Write-off hits Warehouse". New Zealand Herald. Retrieved 2007-04-27.

External links

Share price

Warehouse corporate sites

Sources/articles

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