The Warehouse Group
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- For other uses, see Warehouse (disambiguation).
| The Warehouse | |
 |
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| Type | Public (NZX: WHS) |
|---|---|
| Founded | North Shore, New Zealand, 1982 |
| Headquarters | North Shore, New Zealand |
| Key people | Stephen Tindall, Founder Ian Morrice, CEO |
| Industry | Retail (Department & Discount) |
| Products | The Warehouse Warehouse Stationery |
| Revenue | $2.224 billion NZD ( $500m FY 2005) |
| Employees | 14,800 |
| Slogan | Where Everyone Gets A Bargain |
| Website | www.thewarehouse.co.nz |
The Warehouse, (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. 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 November 24, 2005, The Warehouse announced that was selling its Australian operation for AUS$98 million ($99 million NZD).
Colloquial names for the company's stores include "Big Red Shed" and "WareWhare".
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[edit] History
- 1982: First store opens in Takapuna, Auckland.
- 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.
- 1998: Introduction of apparel as major department.
- 2000: The Warehouse is added to the NZSE 10 index.
- 2000: Sales exceed $1 billion.
- 2001: The Warehouse Financial Services launched.
- 2002: The Warehouse celebrates 20 years in operation.
- 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: The Warehouse signifies it's intention to enter the liquor market.
- 2005: The Warehouse signifies it will exit its Australian operation by Christmas. 3
- 2005: The Warehouse Australia sold for A$92 million (NZ$99m).
- 2006: The Warehouse begins selling alcoholic beverages in selected stores.
- 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.
[edit] 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 Christchurch, 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 under symbol TWH.
Stephen Tindall announced in September 2006 that he planned to buy out other shareholders and take the company private. [1]
[edit] Competition
The Warehouse's chief competitors in the national retail scene include Supercheap Auto (automotive products), Farmers (upscale department stores), Kmart (discount department stores) and the Briscoes Group (sports and homeware store chains) Ironically, The Warehouse is now competing in the non-discount market.
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.
[edit] Criticism
The Warehouse has historically been heavily criticised for unsatisfactory customer service and poor products.[citation needed]
The New Zealand public view staff working at the Warehouse as second-class citizens [citation needed], and are particularly rude and demanding when shopping in one of their stores.[citation needed] Studies have been conducted that indicate that, on average, a shopper is more likely to be rude to a friendly Warehouse staff member, than they are to their equivalent at Briscoes.[citation needed]
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. It is quite common to see long queues at the returns counter immediately after Christmas with customers returning unwanted or faulty Christmas presents. Some industry observers believe this is why The Warehouse has been so popular in New Zealand[citation needed]. 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). In late 2005, The Warehouse Group announced its decision to close its Australian arm. [2]
The Warehouse has always been a popular target for shoplifters; however, since the mid-nineties, security has been stepped up, including the introduction of security guards, surveillance cameras and plain-clothes security professionals.
The Warehouse has also been known to cause the closure of other local businesses in any area in which a new Warehouse store is opened. It was once stated that for every job The Warehouse creates, another nine are taken from other businesses. [3]
[edit] Australian Operation
In 2000, the company entered the Australian retail market. It acquired the Crazy Clint's Bargains and Silly Solly's retail chains. At the time of purchase, those chains had around 126 stores.
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). 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 the 27th November 2005, completion of the sale was expected in early 2006 and was subject to normal regulatory approvals.
The new Australian entity has also taken control of Miller's retail, the group behind Go-Lo, Crazy Clark's and Chickenfeed (Tasmania)
[edit] Hypermarkets
In June 2006, "The Warehouse Extra" opened at Sylvia Park, Auckland. It is 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 branch of "The Warehouse Extra" will be the Whangarei store. It had been suspected that the Te Rapa store in Hamilton City may have been the next store to be converted to "The Warehouse Extra", however current recruitment seems to indicate otherwise.
[edit] 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. 3
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:
- The Warehouse has always had an approach of "cheap prices everyday, all the time". Or its actual slogan "where everyone gets a bargain". The stores are often cluttered with a lot of products, at extremely cheap prices, whereas its competitors' stores are organised and well set-out.
- 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.
[edit] TUI Inventory System
Tui - (Technology Used Intelligently), is an inventory management system developed for The Warehouse Group Limited. It is currently distributed across its entire network of 253 stores, and aids in keeping track of inventory and customer dispatch requests. Amongst Warehouse sales staff members, the current version of TUI is widely regarded as a poorly-designed, poorly-implemented application which causes almost as many problems for staff as it solves.
[edit] Statistics
[edit] Retail operations
The Warehouse operates 2 major formats under 3 different divisions:
- The Warehouse New Zealand (Red Sheds)
- Average 80,000 square feet 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 and include a selection of general merchandise, including apparel, electronics, health and beauty aids, toys, sporting goods and household products.
- Warehouse Stationery (Blue Sheds)
- Average 30-40,000 square feet and include a large selection of stationery, computers, printers and all computer/office products.
[edit] Store counts & revene
- Company Total: 253 (including Australian stores) (NZ$2.225 billion)
- The Warehouse NZ stores: 85
- The Warehouse Australian stores: 126
- Warehouse Stationery stores: 44
[edit] Key employees
[edit] External links
Share Price
Warehouse corporate sites
Financial results
Sources/Articles
- Australian stores drag down sales at The Warehouse (NZ Herald)
- Yellow Sheds sale could fetch $90 million (NZ Herald)
- Commentators: The Warehouse logo looks un-exciting (NZ Herald)
- The Warehouse to sell Australian biz (Supply Chain Review)
- Big box retailers versus botique shops (TV3 Campbell Live)
| Executive Board | |
| Ian Morrice | Group Chief Executive Officer |
| Stephen Tindall | Founder |
| Directors | |
| John Avery | Director |
| Robert Challinor | Director |
| John Dahlsen | Director |
| Graham Evans | Director |
