What possible motive could Foodstuffs have to assist their arch competitor steal a march on them? The whole purpose of their shareholding in WHS was to prevent just that.
Trying to think outside the square - but failing dismally!
:confused:
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The Warehouse Group has detailed ambitious goals to drive its newly expanded portfolio of companies to rival the profits of its core red shed stores.
The NZX-listed retailer has made numerous acquisitions in recent years, including Noel Leeming, R&R Sports and Torpedo7.
Chief executive Mark Powell said the goal to equal The Warehouse stores operating profit was "aspirational".
"I haven't got a crystal ball that'll tell you exactly when it's going to happen," he said. "It wont be achieved in one or two years."
Powell said another facet of The Warehouse Group's strategy was to dominate sales online as well as in stores.
A newly introduced "click and collect" option for picking up online purchases in stores already accounted for 22 per cent of online sales last week, he said.
The biggest change, announced yesterday, is the rebranding of R&R Sports to become physical outlets for online sports store Torpedo7.
Powell confirmed Torpedo7 would remain based in Hamilton, where it had strong roots.
Torpedo7 chief operating officer Aaron Green said one of the main changes to former R&R stores would be the addition of a private label range alongside premium brands.
The price-positioning would be lower than competitor Kathmandu as an entry point, which Green described as more "realistic" on a daily basis than the rival retailer's heavily discounted sales.
Quality of the in-house range would be crucial, he said.
"We're putting Torpedo7 all over it- it's got to be good," said Green. "Ultimately we want customers to leave the store stoked with what they've purchased."
Pricing would also be heavily discounted for loyalty scheme customers, receiving a minimum of 10 per cent off.
Two new Torpedo7 stores opened in Auckland yesterday, and another is planned for Taupo before Christmas.
Green said he was happy with the geographic spread, with the focus now on investing in the former R&R stores.
Wellington was a possible future location, with a strong mountain biking scene.
Torpedo7 also has a strong online presence in Australia, which Powell said could account for as much as 40 per cent of internet sales in any given week.
However, he said replicating a similar multi-channel approach with physical stores was not within the three to five year strategic horizon.
"We want to do New Zealand first. We want to get it working well."
Powell said that decision had nothing to do with The Warehouse's own ill-fated foray across the Tasman.
He also said there were no further acquisitions currently being looked at, and it was time for the business to settle down.
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"There's a lot to do with what we've got now, and that's the focus of the next 12 to 18 months."
The Group's non-core businesses have a long way to catch up to the red sheds' $70-$80 million of annual operating profit, with Noel Leeming and Warehouse Stationery earning roughly $12m each, and Torpedo7 just $1m.
Powell said he "wouldn't pick one out" as having the best growth prospects, but Noel Leeming and a financial services arm had the potential to do well in percentage terms.
The Warehouse Group was criticised by analysts when it bought the electronics chain from private equity in 2012.
While Noel Leeming is now rebranding and updating its store network, it still faces tight margins and strong competition.
"The obsession with margin I think can miss the point," said Powell.
"When you look at overall return on capital, its got as good a return as Warehouse Stationery."
Powell said the point of difference was being run locally rather than out of Australia, with a nationwide footprint and a focus on good service from knowledgeable staff.
The Group's career retail wage policy had already helped improve staff retention "dramatically", he said.
In financial services, the group is winding up its joint venture with Westpac and launching its own range of scheme cards by the middle of next year.
Powell said instalment payment products would also ultimately be brought in-house, with the recent hiring of several former GE executives helping build consumer finance expertise.
- Stuff
proof will be in the results come next year a
Running out of ideas - that's what acquiring other retailers or businesses mean.
The Noel Leeming is a case in point - a highly competitive deflationary retailing industry with low barriers to entry. What does Noel Leeming add to WHS or more to the point, what can WHS bring to Noel Leeming?
I've said it b4 and Powell touched on it in the stuff article the impact of financial services. WHS building a critical mass in sales (at current subdued margins) which will provide a boost to bottom line. The beauty of FS is that it is practically all paper transactions, no inventories, no cash flow issues, no stock control, no additional warehousing required-just click the ticket. Powell says FY2016 to see impact on NP.
SSH notice today, James Pascoe adding to position-yesterday's closing buy for additional 730k shares. It seems the Normans have a plan of some sorts.