The Warehouse Group
 | |
| Company type | Public (NZX: WHS) |
|---|---|
| Industry | Retail (department & discount) |
| Founded | North Shore, New Zealand, 1982 |
| Headquarters | North Shore, New Zealand |
Key people | Stephen Tindall, Founder Mark Powell, CEO |
| Products | The Warehouse Warehouse Stationery |
| Revenue |  NZ$1,735,030,000 (2007–08)[1] |
| NZ$134,687,000 (2007–08)[1] | |
| NZ$90,769,000 (2007–08)[1] | |
| Total assets | NZ$654,937,000 (2007–08)[1] |
| Total equity | NZ$334,656,000 (2007–08)[1] |
Number of employees | 14,800 |
| Website | www.thewarehouse.co.nz |
The Warehouse Group Limited, (NZX: WHS) founded by Stephen Tindall in 1982, is the largest department store retailer operating in New Zealand. The Warehouse is largely a discount store similar to Walmart in the United States, however The Warehouse sells far more generic brand merchandise than other discount or department stores. The company also formerly had operations in Australia, which were sold to Australian Discount Retail. For the fiscal year ending October, 2005, The Warehouse reported net income of NZ$71.9 million on NZ $2.224 billion of sales revenue (3.6% profit margin).
As of 2005, the company had 253 stores throughout New Zealand and Australia along with more than 6 distribution centres in total. On 24 November 2005, The Warehouse announced that was selling its Australian operation for AU$98 million (NZ$99 million).
Colloquial names for the company's stores include "The Big Red Shed", "WareWhare" (pronounced wah-re fah-reh,(rolling the r) whare is Maori word for house), Warehu and "The Wuds".
Milestones
- 1982: First store opens in Wairau Park, 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 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 it's intention to enter the liquor market.
- 2005: The Warehouse announces it will pull out of its Australian operation by Christmas.[2]
- 2005: The Warehouse Australia sold for AU$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 licencing 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.[3][4]
- 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.[5]
- 2009: The first smaller-concept store, The Warehouse Local, opens in Mosgiel.[6]
- 2010: The Warehouse opens a brand new store (now one of the country's largest) in Gisborne. It's the first large format store since the opening of The Warehouse Sylvia Park in 2006.[7]
Business
The Warehouse operates discount retail department stores selling a broad range of non-grocery and grocery products. As of January 2005, The Warehouse employed 7,531 people in New Zealand. The Warehouse's corporate headquarters are located in North Shore, New Zealand.
Apart from retail locations, it operates 2 distribution centres located in Wiri, New Zealand and in Rolleston, New Zealand.
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).
"Warehouse founder wants to buy all Red Sheds". The New Zealand Herald. 14 September 2006. Retrieved 27 April 2007.</ref>
Competition
The Warehouse's chief competitors in the national retail scene include Super Cheap Auto (automotive products), Farmers (lowscale department stores), Kmart (discount department stores) and the Briscoes Group (discounted sports and homeware store chains).
With the launch of 'The Warehouse Extra' at Sylvia Park, The Warehouse expanded into the grocery business (see 'Hypermarkets' section below), though it is unclear whether this enterprise will eventually be extended to a substantial number of other stores.
Criticism
The Warehouse has been criticised for poor products despite offering these products at exceptionally low prices. The Warehouse 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.[8][9]
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.[10]
More recently The Warehouse was blamed for the closure of Sounds Music stores as well as illegal downloading of music.[11] 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.[4][3]
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."[12]
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.[13]
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.[14]
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[disambiguation needed] 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.[15]
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.[5] There was four of The Warehouse Extra in Auckland (Albany, Manukau, Sylvia Park and Westgate). Today "The Warehouse Extra" brand is used on larger traditional stores, many existing stores have taken on "The Warehouse Extra" branding. Stores carrying "The Warehouse Extra" brand are much larger and stock a greater range of products.
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 metres seen in larger locations. Another 3 stores are intended to be launched per year, following this concept, over the next five years.[6] 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.
Financial results
The Warehouse went public in 1995. Since then the stock has climbed from $1.29 to $5.54 in 2005. During 2005, the stock dropped dramatically due to worse than expected results from the Australian operation.[16]
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".
- 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.
- 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.
Statistics
Retail operations
The Warehouse operates 2 major formats under 3 different divisions:
- The Warehouse New Zealand (Red Sheds)
- Average 80,000 square feet (7,400 square metres) 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, entertainment and in-store photo processing.
- The Warehouse Australia (Yellow Sheds)
- Average 80,000 square feet (7,400 square metres) and include a selection of general merchandise, including apparel, electronics, health and beauty aids, toys, sporting goods and household products to a bare minimal
- Warehouse Stationery (Blue Sheds)
- Average 30–40,000 square feet (2800–3700 square metres) and include a large selection of stationery, computers, printers and computer/office products.
Store counts & revenue
- Company Total: 253(NZ$2.225 billion)
- The Warehouse NZ stores: 87
- The Warehouse Australian stores: 126 (No longer owned by TWH Group)
- Warehouse Stationery stores: 47
Key employees
| Executive Board | |
| Mark Powell | Group Chief Executive Officer |
| Stephen Tindall | Founder |
| Directors | |
| John Avery | Director |
| Robert Challinor | Director |
| John Dahlsen | Director |
| Graham Evans | Director |
References
- ^ a b c d e "The Warehouse 2008 Annual Report" (PDF). 27 July 2008. Retrieved 15 April 2009.
- ^ Chan, Karen (11 December 2005). "Yellow Sheds sale could fetch $90 million". The New Zealand Herald. Retrieved 27 April 2007.
- ^ a b Gregory, Angela (10 May 2007). "Warehouse balloons raise wrath of wildlife supporters". The New Zealand Herald. Retrieved 2 June 2007.
- ^ a b Gregory, Angela (24 May 2007). "Warehouse balloons tint Great Barrier Island red". The New Zealand Herald. Retrieved 2 June 2007.
- ^ a b "The Warehouse to can Extra stores". TVNZ. 9 October 2008. Retrieved 9 October 2008.
- ^ a b "Mosgiel Warehouse gets shopper approval". Otago Daily Times. 24 July 2009. Retrieved 24 July 2009.
- ^ http://www.gisborneherald.co.nz/article/?type=article&id=20253
- ^ "Dangerous Helmets". Campbell Live. TV3. 7 June 2007.
- ^
"Consumer Calls For Cycle Helmet Recall". newswire.co.nz. 7 June 2007.
{{cite news}}: External link in|publisher= - ^ "Warehouse keeps options open on Millers". The New Zealand Herald. 15 September 2005. Retrieved 27 April 2007.
- ^ http://www.youtube.com/watch?v=ZdYzE6e_OUg
- ^ "Work comment "sux"". Newstalk ZB. 19 December 2007.
- ^ "Warehouse staff to strike". NZ Herald. 2 December 2009.
- ^ http://au.biz.yahoo.com/051125/30/dwo4.html
- ^ "Coming Soon: Sam's Warehouse".
- ^ Chan, Karen (10 September 2005). "Aussie Write-off hits Warehouse". New Zealand Herald. Retrieved 27 April 2007.
- Australian Associated Press. "Warehouse founder 'to blame' for failure", Yahoo!7 Finance News, 2005-11-25. Retrieved on 2007-08-26.
External links
Share price
Warehouse corporate sites
Financial results
Sources/articles
- Australian stores drag down sales at The Warehouse (NZ Herald)
- Commentators: The Warehouse logo looks un-exciting (NZ Herald)
- The Warehouse to sell Australian biz (Supply Chain Review)
