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

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

• 0:09
  Speaker 1: You're listening to a podcast from News Talks. The'd be
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• 0:16
  Speaker 2: Jamie McKay with us shortly right now, seventeen passis now.
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  Speaker 2: The Warehouse is licking its wounds after delivering a very
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  Speaker 2: bad result today. They recorded a fifty four million dollar
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  Speaker 2: loss for the year. I spoke to the interim chief
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  Speaker 2: executive John Journey earlier.
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  Speaker 3: We're certainly not where we need to be, and the
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  Speaker 3: result is a poor performance. We had a strategy set
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  Speaker 3: about five years ago that was in hindsight to ambitious
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  Speaker 3: and also distracted us from looking after our core brands
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  Speaker 3: at the level of detail that we need.
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  Speaker 2: Liam dan As The Herald's Business editor at larger with
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  Speaker 2: us now, Hey Liam, get it, Heather, you reckon they
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  Speaker 2: can turn this around.
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  Speaker 4: I'm skeptical. I mean, you know, good luck to them
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  Speaker 4: to some extent, although I was a big supporter of
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  Speaker 4: Sir Stephen Tyndall and his private equity partners the bid there,
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  Speaker 4: and you know, the speculation was that they were looking
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  Speaker 4: to basically turn it into the third supermarket chain, which
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  Speaker 4: had a lot of of you know, appeal to me,
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  Speaker 4: partly because I'm you know, a business journalist and was
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  Speaker 4: excited about a big takeover and a lot of change.
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  Speaker 4: But you know, you could see the value of New
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  Speaker 4: Zealand and you just you look at the Warehouse Group
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  Speaker 4: and you know, year five years ago. But gee, a
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  Speaker 4: lot has changed in the last five years. I think
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  Speaker 4: the amount of stuff that we're importing direct from China now,
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  Speaker 4: the cheap, cheap goods that used to be the sort
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  Speaker 4: of staple for the warehouse is soort I mean, it's
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  Speaker 4: I think I saw something in the GDP numbers that
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  Speaker 4: the skyrocketed, you know, fifty percent in the last year.
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  Speaker 4: The amount of imports we're doing directly as in, you know,
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  Speaker 4: from the likes of Team Who basically, so they're up
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  Speaker 4: against it there, and then they're up against it with
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  Speaker 4: the likes of your Costco and Kmart, which is now
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  Speaker 4: decided it is going to expand see some opportunities. So
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  Speaker 4: it's tough as a value proposition, and they didn't do
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  Speaker 4: very well through a period where people were looking for value,
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  Speaker 4: so you know, maybe they can turn it around. I
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  Speaker 4: think they look it's some looking at it from some
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  Speaker 4: very different parameters, I guess to Tyndall, but yeah.
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  Speaker 2: If they're going to turn it around and they need
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  Speaker 2: to focus on the core business. Today abandoned the supermarket idea.
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  Speaker 4: Well they're saying, you know, it's not very lucrative as
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  Speaker 4: it is, and of course you know that means there's
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  Speaker 4: not much incentive to incrementally add to it at the moment,
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  Speaker 4: so they're trying to get back to core business. I
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  Speaker 4: think what Stephen Tindall was looking at was something quite radical,
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  Speaker 4: which you can only do if you know you reinvent
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  Speaker 4: the company. And he's someone who probably well he definitely
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  Speaker 4: has a deep love of the brand and a lot
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  Speaker 4: invested in the brand and wants to see it have
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  Speaker 4: a long legacy and not dwindle away. So he's prepared
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  Speaker 4: to try something quite quite radical. I can understand why
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  Speaker 4: the board and the current management, you know, within the
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  Speaker 4: parameters they're working, can't take on that strategy because it's
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  Speaker 4: too big. The shareholders didn't go for it, and in
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  Speaker 4: particular we know the Normans who own own the family
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  Speaker 4: who owns the Farmers Group, they own twenty percent of
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  Speaker 4: the warehouse, and Stephen Tindall and the these private equity
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  Speaker 4: guys were unable to convince them. But I would not
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  Speaker 4: be surprised to see him have another go. You know,
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  Speaker 4: it's a lot to do with price and money, obviously,
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  Speaker 4: it's it's almost all to do with that, you know.
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  Speaker 4: And so if it doesn't turn around in the next
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  Speaker 4: year or so, Stepentindall may well be back because you know,
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  Speaker 4: if the sheares don't don't come up, then his offer
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  Speaker 4: is going to start looking pretty good.
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  Speaker 2: Yeah, yeah, fair point, Hallam is always really appreciated. Thank you.
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  Speaker 2: That's Liam Dan, the Herald's Business editor at large.
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