Latest / Best of Business / Mark Stirton: Warehouse Group CEO on the Warehouse Group posting a $11.2 million net profit

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Mark Stirton: Warehouse Group CEO on the Warehouse Group posting a $11.2 million net profit · Best of Business

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  Speaker 1: You're listening to a podcast from Newstalk ZB. Follow this
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• 0:16
  Speaker 2: More good news from the retail sector for you. Things
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  Speaker 2: may be turning around for the warehouse. The warehouse group
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  Speaker 2: has posted a net profit after tax of $ 11. 2 million
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  Speaker 2: for the year to August. That's up from a nearly
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  Speaker 2: $ 3 million loss the year before. Mark Sturton is the
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  Speaker 2: warehouse group CEO who is with us now.
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  Speaker 1: Hi, Mark. Hi, Heather.
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  Speaker 3: How are you?
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  Speaker 2: I'm well, thank you very much. Can we basically thank
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  Speaker 2: Noel Leemings for this?
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  Speaker 3: I know, I heard you went and bought an SD card, apparently.
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  Speaker 2: I bought two SD cards. I bought them yesterday at lunchtime,
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  Speaker 2: and they're already basically at my house. How good.
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  Speaker 3: And have you been to our new Queen Street store?
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  Speaker 2: No, Mark, I do it all online. Why do I
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  Speaker 2: need to go?
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  Speaker 3: Oh, this is the one people were lining up for. Yeah,
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  Speaker 3: 500 metres queue, so it was pretty good.
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  Speaker 2: Okay, now can we thank Noel Leeming for the numbers turnaround?
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  Speaker 3: Did a fantastic job, Noel Leeming, and Warehouse Stationery both
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  Speaker 3: doubled profit this year, which was good, and also just
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  Speaker 3: gave us really good time to do the work that
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  Speaker 3: we needed to do on the warehouse, which has also
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  Speaker 3: had a good fourth quarter, which is really just the
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  Speaker 3: hard work we've been putting in over the year. So,
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  Speaker 3: but the consumers, it's tough out there and the consumers really, um,
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  Speaker 3: doing it tough. And so we just trying to do
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  Speaker 3: our best in the, in, in the economy. That's quite flat.
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  Speaker 3: So yeah, that's a good results overall.
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  Speaker 2: Mate, why is it the warehouse is still struggling? I mean,
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  Speaker 2: I see sales are still down 2.3%.
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  Speaker 3: Yeah. I mean, it's, um the warehouse's sales on a
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  Speaker 3: comparable basis is actually fine because remember we've got this
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  Speaker 3: 53rd week which is a retail thing which is an
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  Speaker 3: extra week in the base which is which throws things
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  Speaker 3: off a bit but the warehouse is obviously we we
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  Speaker 3: at the end of last year was going through a
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  Speaker 3: bit of a tough time and so we've had to
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  Speaker 3: fix a lot of internal disciplines and functions internally and
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  Speaker 3: i think that's all starting to come right now in
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  Speaker 3: this fourth quarter and that's also I think we're looking
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  Speaker 3: forward to a good year this year but it's a
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  Speaker 3: lot of it's just controlling our own controllables because you
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  Speaker 3: know retail needs a good economy to help it and
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  Speaker 3: you know it really has been tough particularly post the
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  Speaker 3: The fuel crisis, the consumer really lost confidence and became
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  Speaker 3: quite negative post-January. We thought January and December was going
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  Speaker 3: to be good and people were positive. But definitely post
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  Speaker 3: the Iran crisis, things definitely tapered out.
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  Speaker 2: I see toy sales have hit a record. How do
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  Speaker 2: we explain that?
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  Speaker 3: Toys, you know, we're the biggest toy company in New Zealand.
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  Speaker 3: So I think that also helps in our story. And
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  Speaker 3: we do very well there. And, you know, particularly we've
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  Speaker 3: got our private label brand that's done really well. But
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  Speaker 3: we've also got great partners with Lego and Zuru and
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  Speaker 3: various others that have done really well for us. It
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  Speaker 3: is a strange thing. Some of these categories that are discretionary,
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  Speaker 3: you think that they would be down. But we've actually,
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  Speaker 3: I think in that particular department, which has been strong
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  Speaker 3: for quite a while, we did quite well.
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  Speaker 1: Yeah.
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  Speaker 2: And I see one of the things that's really interesting
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  Speaker 2: out of Noel Leeming is that you guys are seeing
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  Speaker 2: fewer people actually come into store, but when they buy,
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  Speaker 2: they buy more. And what's the explanation for that?
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  Speaker 3: Well, I think we're a service model, which does help.
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  Speaker 3: You know, Noel Leeming is a higher service model, which,
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  Speaker 3: you know, we're finding that when customers are coming in,
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  Speaker 3: they're coming in with a lot more purpose. And, you know,
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  Speaker 3: we pride ourselves on service at Noel Leeming, and we
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  Speaker 3: believe that obviously that helped conversion and people buying what
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  Speaker 3: they came in for. Yeah.
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  Speaker 2: Now, you must be feeling pretty pleased with yourself, Mark,
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  Speaker 2: because you realize all of us watching this put this
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  Speaker 2: down to you, right? This is your personal experience.
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  Speaker 1: Oh, no.
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  Speaker 3: No, there's a lot of hard work across a lot
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  Speaker 3: of different places in this business. It's definitely not me
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  Speaker 3: alone at all. But yeah, I believe in the business.
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  Speaker 3: I think our new brand campaign is also really touching
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  Speaker 3: hearts and minds, which is great, which is exactly what
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  Speaker 3: we wanted to reintroduce or help New Zealand remember us again,
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  Speaker 3: particularly in the redsheds. And I think it's resonated really well.
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  Speaker 3: And we're hoping that that re-engagement people come back into stores.
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  Speaker 3: We've got amazing product coming into summer. And yeah, we're
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  Speaker 3: really excited. We still got some work to do on
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  Speaker 3: our stores to make them more exciting to shop. And
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  Speaker 3: that's the job to do over the next 12 months.
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  Speaker 3: So hopefully next time I chat to you, we've got
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  Speaker 3: some good news stories there as well.
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  Speaker 2: Good on you, mate.
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  Speaker 3: Look forward to it.
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  Speaker 2: Mark Sturton, Warehouse Group CEO.
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