CVT also bounced. I think this will do something similar.
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https://www.facebook.com/TheWarehous...5055057866474/
Check out this video.
What does everyone think of this new advertising theme? It's using a dark blue theme instead of the normal red. Looks alot more premium.
I think this is the "new warehouse".
Didn't I read somewhere that the Norman family-- Pascoes/Farmers/Stevens /plus other retail brands some in Aust/NZ own a decent % of WHS, approaching 19.5% now I think.
The problem I have with the warehouse is where is growth going to come from in the next five years? Yes fair value for this might be a little higher if they can keep sales and profits flat (I think $2.50), but why place a risk on a company that's going to make you 10% to 20% at most given the potential downsides? They have so many headwinds and the SP performance over the last 10 years is woeful. Why will this be any different?
EDIT: This is in response to Ogg posts btw, sorry Roger I agree with you!
Their revenue and gross profit is good. They just have to find a way to cut costs in their business.
They need to close or sell alot of their stores, like the one in New Market. Then invest in large online distribution centers in the major cities. The focus should be growing online sales.
Spending $700m on leases is a joke, they should move further out of town and buy the land outright and build more super stores. People will drive 30mins to get a bargain, like a large fridge from Noel Leeming, then when they are in the store you sell them smaller but higher margin products. But again, the focus should be online, and the fridge should get delivered "for free", and customers will be happy to add extra items to their shopping cart.
They need to get rid of more people in their head office and streamline more. Invest in technology that drives efficiency, just like what all the big banks are doing.
Then their needs to be a branding change. Something major, like getting rid of the "red theme", changing the buy line "everyone gets a bargain", or just make up an entire new one. It can be done, for example when Telecom changed to Spark.
The finance business needs to go. As well as the smaller businesses like Torpedo7, Shotgun Supplement, etc. Even warehouse stationary could go as it's just a hassle to run and they aren't going to be very profitable online. Just sell them all off and pay down debt before interest rates go up. Noel Leeming and the Red sheds should merge, after a major brand change.
At the end of the day, this is the go to place for the average kiwi. It is a well known and trusted company. There just need to be a bit of house cleaning and a huge make over.
I would go as far as saying they should stop dividends next year and do all of the above. The share price has already been hammered. There's going to be alot more volatility anyway. It's basically not A grade investment anymore.
Anyway, I see potential here if they can execute well and position themselves for the future.
I too see huge potential of an unrivaled magnitude - would be a great company but for the product range, cheap rubbish image, unimaginative and outdated management etc etc.
There will always be a market for cheap rubbish - unfortunately, more and more of the cheap rubbish can be obtained via the internet, and more often, at cheaper prices than the WHS!