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

Transcript

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

• 0:00
  Speaker 1: Jamie McKay with us shortly right now seventeen passis now
• 0:02
  Speaker 1: the warehouse is locking its wounds after delivering a very
• 0:05
  Speaker 1: bad result today they recorded a fifty four million dollar
• 0:08
  Speaker 1: loss for the year. I spoke to the interim chief
• 0:10
  Speaker 1: executive John Journey earlier.
• 0:13
  Speaker 2: We're certainly not where we need to be and the
• 0:15
  Speaker 2: result was a poor performance. We had a strategy set
• 0:18
  Speaker 2: about five years ago that was in hindsight to ambitious
• 0:22
  Speaker 2: and also distracted us from looking after our core brands
• 0:25
  Speaker 2: at the level of detail that we need.
• 0:27
  Speaker 1: Liam dan as The Herald's business editor at larger with
• 0:29
  Speaker 1: us now, Hey, Liam, get Heather, you reckon they can
• 0:32
  Speaker 1: turn this around.
• 0:34
  Speaker 3: I'm skeptical. I mean, you know, good luck to them
• 0:37
  Speaker 3: to some extent, although I was a big supporter of
• 0:41
  Speaker 3: Sir Stephen Tyndall and his private equity partners the bid
• 0:45
  Speaker 3: there and that you know, the speculation was that they
• 0:47
  Speaker 3: were looking to basically turn it into the third supermarket chain,
• 0:50
  Speaker 3: which had a lot of you know, appeal to me,
• 0:53
  Speaker 3: partly because I'm a business journalist and was excited about
• 0:57
  Speaker 3: a big takeover and a lot of change. But you know,
• 1:01
  Speaker 3: you could see the value of new Zealand and you
• 1:02
  Speaker 3: just you look at the Warehouse Group and you know, yeah,
• 1:05
  Speaker 3: five years ago, but gee, a lot has changed in
• 1:08
  Speaker 3: the last five years. I think the amount of stuff
• 1:11
  Speaker 3: that we're importing direct from China now, the cheap, cheap
• 1:14
  Speaker 3: goods that used to be the sort of staple for
• 1:16
  Speaker 3: the warehouse is soort I mean, it's I think I
• 1:19
  Speaker 3: saw something in the GDP numbers that the skyrocketed, you know,
• 1:25
  Speaker 3: fifty percent in the last year. The amount of imports
• 1:27
  Speaker 3: we're doing directly as in, you know, from the likes
• 1:30
  Speaker 3: of Team Who basically, so they're up against it there,
• 1:33
  Speaker 3: and then they're up against it with the likes of
• 1:35
  Speaker 3: your Costco and Kmart, which is now decided it is
• 1:38
  Speaker 3: going to expand see some opportunity. So it's tough as
• 1:42
  Speaker 3: a value proposition, and they didn't do very well through
• 1:44
  Speaker 3: a period where people were looking for value. So you know,
• 1:48
  Speaker 3: maybe they can turn it around. I think they're looking
• 1:51
  Speaker 3: at some looking at it from some very different parameters,
• 1:54
  Speaker 3: I guess to Tyndall.
• 1:56
  Speaker 1: But yeah, if they're going to turn it around and
• 1:58
  Speaker 1: they need to focus on their core is Essterday abandoned
• 2:01
  Speaker 1: the supermarket idea?
• 2:03
  Speaker 3: Well, they're saying, you know, it's not very lucrative as
• 2:05
  Speaker 3: it is, and of course you know that means there's
• 2:08
  Speaker 3: not much incentive to incrementally add to it at the moment,
• 2:11
  Speaker 3: so they're trying to get back to core business. I
• 2:14
  Speaker 3: think what Stephen Tindall was looking at was something quite radical,
• 2:16
  Speaker 3: which you can only do if you know you reinvent
• 2:20
  Speaker 3: the company. And he's someone who probably well, he definitely
• 2:23
  Speaker 3: has a deep love of the brand and a lot
• 2:25
  Speaker 3: invested in the brand and wants to see it have
• 2:27
  Speaker 3: a long legacy and not dwindle away, so he's prepared
• 2:30
  Speaker 3: to try something quite quite radical. I can understand why
• 2:34
  Speaker 3: the board and the current management, you know, within the
• 2:36
  Speaker 3: parameters they're working, can't take on that strategy because it's
• 2:41
  Speaker 3: too big. The shareholders didn't go for it, and in
• 2:43
  Speaker 3: particular we know the Normans who own own the family
• 2:46
  Speaker 3: who owns the Farmers Group, they own twenty percent of
• 2:49
  Speaker 3: the warehouse, and Stephen Tindall and these private equity guys
• 2:52
  Speaker 3: were unable to convince them. But I would not be
• 2:55
  Speaker 3: surprised to see him have another go. You know, it's
• 2:57
  Speaker 3: a lot to do with price and money. Obviously, it's
• 3:00
  Speaker 3: Amos's almost all to do with that, you know, And
• 3:03
  Speaker 3: so if it doesn't turn around in the next year
• 3:07
  Speaker 3: or so, Stepentindall may well be back because you know,
• 3:10
  Speaker 3: if the shears don't don't come up, then his offer
• 3:14
  Speaker 3: is going to start looking pretty good. Yeah, yeah, fair point.
• 3:17
  Speaker 1: Hallam is always really appreciated.
• 3:18
  Speaker 2: Thank you.
• 3:19
  Speaker 1: That's Liam Dan, the Herald's Business editor at large. By
• 3:22
  Speaker 1: the way,