The Warehouse Group

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"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); 33 years ago
1991 (Group); 24 years ago
Headquarters North Shore, New Zealand
Key people
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

File:TW old.png
"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.

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  • 1982: First store opens in Takapuna, Auckland.
  • 1988: Second store opens in Market St, Hastings
  • 1990: First nationally distributed advertising "mailer'.
  • 1991: Sales exceed $100 million.
  • 1991: First Warehouse Stationery store is opened.
  • 1992: Launch of The Warehouse card.
  • 1995: The Warehouse added to the New Zealand Stock Exchange, under the symbol TWH.
  • 1996: Opening of a North Island Distribution centre.
  • 1996: The largest Warehouse store at the time in Invercargill opens and local businesses suffer creating a large amount of empty shops in the city.
  • 1998: Introduction of apparel as major department.
  • 2000: The Warehouse is added to the NZSE 10 index.
  • 2000: Sales exceed $1 billion.
  • 2002: The Warehouse celebrates 20 years in operation.
  • 2002: The Warehouse opens in Te Kuiti.
  • 2003: The Warehouse Australia brand is launched, with a total of 126 stores.
  • 2004: The Warehouse signifies overall brand change and store format change.
  • 2005: Lab store launched in the Hamilton suburb of Te Rapa.
  • 2005: Warehouse brand relaunched with new lower-case logo and TV ads softened.
  • 2005: The Warehouse signifies its intention to enter the liquor market.
  • 2005: The Warehouse announces it will pull out of its Australian operation by Christmas.[6]
  • 2005: The Warehouse Australia sold for A$92 million (NZ$99m).
  • 2006: The Warehouse begins selling alcoholic beverages in selected stores. Invercargill and Gore stores are excluded from selling alcohol due to local licensing laws.
  • 2006: The Warehouse launches the first of its new format stores branded 'The Warehouse Extra' at Sylvia Park, Auckland. The offer includes full grocery as well as a pharmacy, bakery and photo processing.
  • 2007: The Warehouse celebrate their 25th birthday and to mark the occasion release 13,000 balloons, causing concerns from environmentalists.[7][8]
  • 2008: The Warehouse abandons its full-scale grocery arm operating under the name 'The Warehouse Extra', converting or reverting the few stores involved to the standard format.[9]
  • 2009: The first smaller-concept store, The Warehouse Local, opens in Mosgiel.[10]
  • 2010: The Warehouse opens a brand new store (now one of the country's largest) in Gisborne. It is the first large format store since the opening of The Warehouse Sylvia Park in 2006.[11]
  • 2012: The Warehouse ceases its instore pharmacy offer.
  • 2012: The Warehouse in Hastings is rebuilt as one of New Zealand's largest. The old Warehouse on Market St goes up for sale.
  • 2012: The Warehouse announces it is buying electronics retailer The Noel Leeming Group for $65 million.[12][13]
  • 2013: TW Group hold Click Madness, a one-day online only sale across all brands in the group.
  • 2013: TW Group Purchases Torpedo7, No. 1 Fitness, Shotgun Supplements, Shop HQ (pet.co.nz & baby.co.nz), and Insight Traders.
  • 2014: TW Group Buys R&R Sport and SchoolTex.[3]
  • 2014: TW Group launches The Warehouse Group Financial Services after the takeover of Diners Club NZ[5][14]

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[who?] 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.

File:Warehouse local.JPG
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]

File:Thewarehouselogo.png
"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.

File:Warehousestationerynz.png
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]

File:Noel leeming logo-20120608-120221.png
"Noel Leeming" logo

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,

  • The Warehouse NZ stores: 91
  • Noel Leeming stores: 77
  • Warehouse Stationery stores: 63
  • Torpedo7 Group stores:10
    • Total stores: 241

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.[citation needed] Various different explanations have been offered for this:[who?]

  • The Warehouse has always had an approach of "cheap prices everyday, all the time". Or its actual slogan "where everyone gets a bargain".[citation needed]
  • The Warehouse benefits from economies of scale in manufacturing and logistics; the purchase of massive quantities from its suppliers combined with a very efficient stock control system help make The Warehouse's operating costs lower than that of its competitors.[citation needed]
  • One particular aspect of the economy of scale is the aggregation effect, used in other businesses such as Bin Inn and Countdown, whereby The Warehouse sells as many different items as possible. This allows the company to grow revenue over its fixed cost base (more sales out of the same store). This is why The Warehouse began to sell low margin groceries.[citation needed]

Statistics

Retail operations

The Warehouse operates 3 major formats under 3 different divisions:

  • The Warehouse New Zealand (Red Sheds)
    • Average 80,000 square feet (7,400 m2) and include a selection of general merchandise, including apparel, electronics, health and beauty aids, toys, sporting goods and household products. Also includes large gardening departments, along with music and entertainment.
  • Warehouse Stationery (Blue Sheds)
    • Average 30,000 to 40,000 square feet (2,800 to 3,700 m2) and include a large selection of stationery, computers, printers and computer/office products.
  • Noel Leeming
    • Flagship electronics brand
    • Appliance and electronics stores

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. ↑ 1.0 1.1 http://www.interest.co.nz/business/68841/warehouse-buying-diners-club-business-nz-part-ambitious-plans-run-financing-arm
  2. ↑ 2.0 2.1 2.2 2.3 2.4 Lua error in package.lua at line 80: module 'strict' not found.
  3. ↑ 3.0 3.1 3.2 3.3 http://www.twg.co.nz/history/
  4. ↑ http://www.twg.co.nz/userfiles/image/8d57c3f3-e2e0-4f3d-8b10-8b1f5a636f91-original.png
  5. ↑ 5.0 5.1 5.2 5.3 http://www.twg.co.nz/our-brands/
  6. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  7. ↑ 7.0 7.1 Lua error in package.lua at line 80: module 'strict' not found.
  8. ↑ 8.0 8.1 Lua error in package.lua at line 80: module 'strict' not found.
  9. ↑ 9.0 9.1 Lua error in package.lua at line 80: module 'strict' not found.
  10. ↑ 10.0 10.1 Lua error in package.lua at line 80: module 'strict' not found.
  11. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  12. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  13. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  14. ↑ Diners Club NZ sold to TW Group
  15. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  16. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  17. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  18. ↑ [1][dead link]
  19. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  20. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  21. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  22. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  23. ↑ Lua error in package.lua at line 80: module 'strict' not found.
  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. ↑ Lua error in package.lua at line 80: module 'strict' not found.

External links

Share price

Warehouse corporate sites

Sources/articles

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