Liam Dann: NZ Herald business editor at large on The Warehouse Group reporting a $54.2m net loss

Leading Kiwi retailer The Warehouse Group has posted a significant net loss off the back of a tough trading environment.

The company today posted it announced a net loss of $54.2 million - a contract to last year's $29.8 million net profit.

NZ Herald business editor at large Liam Dann says it's unclear if the Warehouse can recover from this.

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Episode Transcript

Speaker 1 (00:00):
Jamie McKay with us shortly right now seventeen passis now
the warehouse is licking its wounds after delivering a very
bad result today they recorded a fifty four million dollar
loss for the year. I spoke to the interim chief
executive John Journey earlier.

Speaker 2 (00:13):
Were certainly not where we need to be and the
result was a poor performance. We had a strategy set
about five years ago that was in hindsight to ambitious
and also distracted us from looking after our core brands
at the level of detail that we need.

Speaker 1 (00:27):
Liam dan as The Herald's business entitor at larger with
us now, Hey Liam, get it, Heather, you reckon they
can turn this around.

Speaker 3 (00:34):
I'm skeptical. I mean, you know, good luck to them
to some extent, although I was a big supporter of
Sir Stephen Tyndall and his private equity partners the bid
there and that you know, the speculation was that they
were looking to basically turn it into the third supermarket chain,
which had a lot of you know, appeal to me,
partly because I'm a business journalist and was excited about

(00:57):
a big takeover and a lot of change. But you know,
you could see the value in New Zealand and you
just you look at the Warehouse Group and you know, yeah,
five years ago, but gee, a lot has changed in
the last five years. I think the amount of stuff
that we're importing direct from China now, the cheap, cheap
goods that used to be the sort of staple for
the warehouse is sowed. I mean it's I think I

(01:19):
saw something in the GDP numbers that they skyrocketed, you know,
fifty percent in the last year. The amount of imports
we're doing directly as in, you know, from the likes
of Team Who basically, so they're up against it there,
and then they're up against it with the likes of
your Costco and Kmart, which is now decided it is
going to expand see some opportunity. So it's tough as

(01:42):
a value proposition, and they didn't do very well through
a period where people were looking for value. So you know,
maybe they can turn it around. I think they're looking
at some looking at it from some very different parameters,
I guess to Tyndall.

Speaker 1 (01:56):
But yeah, if they're going to turn it around, and
they need to focus on the core business today abandoned
the supermarket idea.

Speaker 3 (02:03):
Well they're saying, you know, it's not very lucrative as
it is, and of course you know that means there's
not much incentive to incrementally add to it at the moment,
so they're trying to get back to core business. I
think what Stephen Tindall was looking at was something quite radical,
which you can only do if you know you reinvent
the company. And he's someone who probably well, he definitely

(02:23):
has a deep love of the brand and a lot
invested in the brand and wants to see it have
a long legacy and not dwindle away, so he's prepared
to try something quite quite radical. I can understand why
the board and the current management, you know, within the
parameters they're working, can't take on that strategy because it's
too big. The shareholders didn't go for it, and in
particular we know the Normans who own own the family

(02:46):
who owns the Farmers Group. They owned twenty percent of
the warehouse and Stephen Tindall and these private equity guys
were unable to convince them. But I would not be
surprised to see him have another go. You know, it's
a lot to do with price and money. Obviously, it's
Almo's almost all to do with that, you know, And
so if it doesn't turn around in the next year

(03:07):
or so, Stephent Tindall may well be back because you know,
if the shears don't don't come up, then his offer
is going to start looking pretty good.

Speaker 1 (03:16):
Yeah, yeah, fair point, Hallam is always really appreciated. Thank you.
That's Liam Dan, the Herald's Business editor at large.

Speaker 2 (03:22):
By the way, for more from Heather Duplessy Allen Drive,
listen live to news talks he'd be from four pm weekdays,
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