The market is doing to the WHS what the WHS did to the Moms and Pops stores all around N Z all those years ago, now Mr T you know how it feels !!!
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Certainly greener pastures now, but I look back very fondly on my time there (well most of it - the last few months before I left/T7 group was restructured with the sub-brands being rolled into the T7 stores was fairly miserable as most of us sensed what was coming; I was just fortunate to get out before the boat really started capsizing).
If I think about the issues that were present during my time, many of them did seem to go back to the fundamental issue that upper-level Warehouse Group management was "detached" from the reality of what the customers of younger, fresher brands like T7, 1-Day, No1 Fitness and Shotgun Supplements (all under the T7 group) wanted, as well as having merchandisers who just didn't "get it".
Take 1-Day, for example. In its heyday 1-Day was very popular because it offered a tiny number of genuinely good deals each day. Once the stock was gone it was gone. The 'OG" 1-Day team understood this. However, over time it became a dumping ground for group crap that the other brands couldn't sell, with barely any good deals (the only ones worth buying were the 'diamond deals'). This is because upper management just thought they could sell any old garbage and people would buy it because of the time-limited novelty.
No1 Fitness, which was once again a good little business in its heyday, tried to branch out into selling branded apparel from Nike, Adidas etc because the merchandisers were able to source some cheap product. Management thought this was a great idea. The only issue? It was last season's stuff (in fact older than that). Because NZ doesn't have a huge population of East European 'Adidasky' tracksuit wearers, hundreds of thousands of dollars of stock wound up languishing in the warehouses until we wound up giving it away for free with the purchase of fitness equipment - even then I recall customers literally saying they didn't want it.
Shotgun Supplements, there was an obsession with trying to get into selling home branded supplements (which did carry hugely superior margin) but that's not what customers wanted - they wanted the 'name brand' supplements, and where the opportunities were was to then upsell/cross-sell the order e.g. customer buys a protein powder with about 5% margin on it but then you sell them the pre-workout with a very healthy margin and it all balances out.
I learned a lot, which was a good thing.
Wonder how half year to January
No update
Must have been a good un’
Solid sales, good margins and expenses under control = good result (normalised / adjusted that is)
Obviously has to be a buy since we now have twr sky and atm as market darlings. While hgh pgw all the rv stocks are ready to be euthanized. Its like a worm hole to an alternative reality opened up.
Is this a bargain yet ? :)
Has St Stephen introduced the Singer & Piano player for the Bargain Basement Showstopper ? :)
Worldliness sales data suggests WHS could have had bad start to new year F25
But spending was down in electronics/computer stores (-16.4%), department stores (-26.1%), clothing shops (-1.5%), furniture outlets (-6.0%), appliance stores (-9.3%) and wholesale/retail hardware merchants (-0.6%), Worldline said..
https://businessdesk.co.nz/article/r...m_medium=email
pretty grim half yr report but the shocker is the start to second half
wow feb sales down double digits :scared:
yet still paying a divie. crazy. at least KMD had more sense.
https://www.nzx.com/announcements/428233
The Warehouse Group simplifies further to focus on core brands
• Total Group continuing sales1 $1.633 billion in FY24 H1, down 4.9% compared to FY23 H1
o The Warehouse sales were $965.6 million, down 4.7%
o Warehouse Stationery sales were $117.9 million, down 5%
o Noel Leeming sales were $544.4 million, down 2.2%• Gross Profit $559.7 million, down 0.4%
• Gross Profit Margin increased 160 basis points to 34.3%
• The Warehouse Gross Profit increased 1.6% to $374.3 million, with Gross Profit Margin up 250basis points to 38.8%
• Continuing Adjusted Net Profit After Tax (NPAT) for the period from continuing operationsincreased 18.9% to $30.7 million
• Total Group Reported Net Loss after Tax, including the impairment of Torpedo7 assets andrestructuring costs, of $23.7 million
• Net Debt of $18.7 million, significantly down from $83.4 million at FY23 H1, with availableliquidity of $471.3 million
• FY24 Interim Dividend declared 5.0 cents per share.
Tony coming on board also.....would have thought had enough going on with MFB.....
https://www.nzx.com/announcements/428234
Pretty amazing effort ……even better than Briscoes
Continuing Adjusted Net Profit After Tax (NPAT) for the period from continuing operations increased 18.9% to $30.7 million
18.9% increase in profit in these tough times …wow
Love it when you cut the rot out and discard it and forget about it eh
TheMarket.com being sold or closed down as well
We need these NZ retail companies to stay profitable. If they don't then NZ will suffer as stores are closed.
From a macro point of view it's very concerning where we are heading.
It does look like management are making better decisions. But who really wants to stay invested in the WHS at the moment as the turn around will take a few financial years.
Now fire the CEO and this could be a buy. Absolute plonker.
I bought $180 worth of winter kids clothes from temu the other day. Hasnt been delivered yet. Looking forward to seeing the quality and if sizing is correct. Everything was $5 to $10 a piece.
Usually we buy our kids clothes from Farmers. Their price to quality is pretty good. But when you are buying 3 long sleeve t-shirts for $16.77 its hard to pass up. Farmers current special is buy 2 for $30!!!
Temu is a major major issue for the WHS and others. Not sure how the big brick and mortar stores will be able to beat it?
Tui ad right there.....
From what I understand, it is 5% net to the bottom line for a Foodstuffs owner.
While I would think the perception of the Red Sheds is reasonably negative compared to Kmart etc, their efforts of food will be appreciated by many. Not sure how much 'cross-sales' takes place, but must increase food traffic.
Actually he has taken a big pivot here - shedding his kingdom building by closing down themarket.com and selling off T7. Gross margins increasing, staffing costs down. Net debt almost down to zero, winding down tech capex.
I’m not holding, but looks like a fairly responsible turn around all of a sudden.
on a related note, its crazy there Wellington store has been closed for what seems like about a year now following what was a minor fire.
SP up 5% so market happy with getting back to basics approach.
As long as they don't buy MFB ehh:)
Educate me. Why are people buying this stock again?
Make a 6 Month Loss, close more doors, close or hock off more of the Ops within, pay a small dividend to please mum & dad holders (can't leave them barehanded - that would never do) - beats me why this has sent buying signals out on those sort of fundamentals & on the back of recent earlier period results .. clearly all is not well :)
Maybe the thoughts of the newly roped in baconiser bashing & banging away on new WHS fares in the kitchen might have inspired some ;)
Poor old Nick - crocodiles all round & didn't see any of them arrive in the surrounding pools ? ;)
must have been baby ones when they landed ..
As for NZM - WHS shares soar .. only by a vast jaw dropping 10c though ;)
might dive by the same amount by end of week after all digest the sombre report
The day must have been slow in the NZM Business newsroom or everyone was in a dream :)
Went to check out the newly reopened Tory street central Wellington store - where management had issued PR recently proclaiming it as the latest store to be added to its grocery roll out.
Lies.
The food department was completely unchanged from before it closed a year back.
the store still looked the same as well, they did absolutely nothing to improve it (it was closed due to a small fire).
What, no fresh produce they were touting last week https://wellington.scoop.co.nz/?p=159525
Maybe arriving next week lol
Maybe we’ll hear how the disposal of TheMarket.com is going one day soon
Where is the Motu again?
Up by Whakatane?
JB Hi Fi just reported that NZ sales for Jan/Mar were up 18.3% on last year …….comparable were +2.9% with other growth from new stores
Hard to imagine Noel Leeming doing these sort of numbers
WHS apparently quarter sales tomorrow …probably going to be a bit dismal but Nick will spin a good story
Update even more dismal than I envisaged
Things seem to be getting worse quarter to quarter
Fancy blaming floods and Gabrielle …desperation
http://nzx-prod-s7fsd7f98s.s3-websit...882/418245.pdf
Rod must be laughing his head off seeing WHS sales report
Yup - not a mention of floods and Gabrielle contributing to the 10.5% increase in WHS sales last year (taking credit).
But now, those events are to be blamed!
https://www.nzx.com/announcements/411305
Wow. This company will make a great case study one day.
COPY KMART. It's not hard.
I was at Eastgate Mall a couple of days ago.Went into a recent new shop,a discount groceries.
Store size would be under a tenth of the size of The Warehouse's Eastgate store.
Two checkouts open and busy,while Warehouse store had one check out open and two people in their self service check outs.
First thing I note when comparing retail stores is the number of check outs open and how busy they are.
WHS issues continue.
ps.The discount grocer's stock would be under $200,000 while WHS's Eastgate store would be many millions.
I would think WHS's store would be lucky to achieve one to one and a half stock turns a year,while the discount grocer would be between eight and ten stock turns a year.
Oof.
Also not that surprising, almost all mortgage holders have rolled over to ~7% interest rates now. Throw in everyone in the public service pulling back personal spending for fear they will soon lose their jobs - massive double whammy for retailers selling big ticket items.
Write down of carry value/investment in The Market presumably won't materialise until end of the financial year reporting, but will weigh further on the outcome then?
Despite the drop in revenue, the likely full year net profit from operations still seems rather healthy for a $440m market cap?
Thoughts?
(Not holding, but on watch list)
The circle of (business) life continues unabated, right?
The Warehouse killed off many small retailers, who couldn't keep up. Now the tired old lion of NZ retail has many hungry young challengers nipping at its heels - from the likes of Kmart with its vastly superior homebrand Anko range, to the likes of Aliexpress and Temu providing cheap plasticky garbage for even less.
The only thing I really do like about The Warehouse now is their homebrand coffee beans (apparently the reject Havana ones) which represent excellent value for money and taste good when freshly ground. But that's hardly the stuff that's going to resurrect the business.
Noel Leeming is a miserable place to shop owing to a very insipid range and typically poor deals (at least JB Hi Fi and PB Tech offer some more interesting products/choice when it comes to computers, headphones and other electrionics) and you can't so much as set foot in the stores where I live without being pounced on by multiple salespeople who I assume are desperate to make a sale to earn commission.
The big issue with a struggling retailer is their leases.
Wonder how badly Costco is eating The Warehouse's lunch ? ;)
Be fairly large bites I imagine ..
Well, at least those people that didn't get their full allocation at the IPO have a chance to buy more shares at a similar price.
If any are still alive.
CEO has gone effective immediately.
The Warehouse Group (TWG) today announced that Nick Grayston will step down from his role as Group Chief Executive Officer, effective immediately.
TWG Chair Joan Withers said "Since 2016, Nick has led TWG through a period of significant change in the retail industry and I want to thank him for his commitment and contribution. His focus on sustainability, adopting Agile ways of working, navigating the challenges of Covid and initiating the significant and successful programme of critical infrastructure upgrades have been hallmarks of transformation of The Warehouse Group in the last five years."
"However, as we look to the future, we have agreed a change in direction is necessary for the Company and that it needs fresh energy to execute."
John Journee will take up the role of Interim CEO on 20 May 2024, while the Board undertakes a search for a new CEO. The Board has determined that, upon taking up his new role, John will cease to be an independent director but will continue as an executive director of TWG.
"John spent 15 years at TWG across a range of roles, including as CEO of Noel Leeming, and has been on the TWG Board since 2013. His experience and familiarity with TWG will be invaluable as we navigate this transition and begin our search for a new permanent CEO," says Mrs Withers.
Nick Grayston said it has been a privilege to lead The Warehouse Group and work alongside such a dedicated team.
"Leading The Warehouse Group has been one of the most rewarding experiences of my career. While it is the right time for me to step aside, I have every confidence in the talented team at The Warehouse Group to drive the business forward and I wish them the very best."
Mrs Withers said the Board and Executive team were committed to supporting the 10,000-strong team at The Warehouse Group in delivering value to shareholders and customers and getting the Group's strategic and financial performance back on track.
"Our team members, customers, shareholders and all Kiwi families are our inspiration and motivation as we focus on improving the performance of the core business. This transition marks a new chapter for TWG as we address our current challenges and seize the opportunities that lie ahead."
Xxxx…deleted same message as above
Three years too late but some welcomed news.
Some time ago I worked for "the group" in a management-level role for one of the sub-businesses. I remember when Grayston came along, saying to my boss that he wouldn't be up to much, and I remember being told to watch what I say. Might have to dig old boss' number out of my phone and send him a last laugh message.
"Leading The Warehouse Group has been one of the most rewarding experiences of my career."
I'm glad someone has had some rewards....
"Our team members, customers, shareholders and all Kiwi families are our inspiration and motivation."
It didn't/doesn't really show....
I was in a Warehouse this morning. As depressing as usual. And the $5 eggs have gone up to $6.
Yesterday I was looking at a new heater. $179 at Noel Leeming. Mitre 10 (who aren't exactly known for being the cheapest) $139 for the same model, with a club special of $115. NL do a price match, but it's just not worth the effort.
Looking at some other stuff and they have priced themselves out of the market. It's as though they don't want customers-in which case, they're succeeding.
I hope the new guy/gal can get them back to where they were 10 years ago-when there was some energy and vibe (sorry, dislike that term) to the business. It just seems to have been grinding to a near standstill over the past 5 years or so.
This about says it:
Quote:
Mrs Withers said the Board and Executive team were committed to supporting the 10,000-strong team at The Warehouse Group in delivering value to shareholders and customers and getting the Group's strategic and financial performance back on track.
but it wont be an easy fix with more large sharks having entered the pool and hard at work carving out their own existences ;)
I wonder if this was not instead a case of being pushed out ? :)
The board has some talent which has a fairly lengthy track records on their scorecards, so wouldn't be blind to the trajectory they have been seeing of recent times, especially since Foodstuffs divested their holding..
A fair few heads onboard across the WHS - all dependent on it for their survival .. would never have thought the headcount would be as high as 10,000
Wonder what the head counts at say Bunnings, Mitre 10 or Costco are like ?
Should have happened long ago. Perhaps now WHS will be investable.
[x] TheMarket - closed
[x] Torperdo7 - sold
[x] CEO - gone
Although you have to wonder about the capabilities of the board letting him hang around so long... and also taking so darn long to close TheMarket!
I was talking to a couple of friends who are gardeners.
Garden centres at WHS are too far away from the car park to be bothered carting compose or bags of potting mix,compared with Mitre10.
However buying shrubs and small trees you really do get a bargain,as their stock is so slow selling ,you can buy a two year old tree/shrub for the same price you would pay at a garden centre for a one year old tree/shrub.
Friday arvo sacking. Crikey!
New strategy - Kmart with a garden centre ?
Deleted. Old news!
$1.09 sp ~$375m market cap. ~$3B of continuing sales. Little to no debt. Might be able to make $50m after tax in near term and pay out most of it? Is all the bad news fully priced in now or do people think is ultimately a doomed business? Seeming like it is priced by market with a moderate chance of failure?
I would love to see a new CEO appointed on a back to retailing basics agenda, could start with improving the lighting in stores get away from horrible cold/blue lights, and with cleaning up the shoddy entrances - currently generally untidy with rubbish around and air of neglect. Then focus on mechandising, stock turn and sharpening up the loyalty scheme offer.
Disc - no holding
Let’s hope it can be made to work.
It is usually very costly for a retailer to downsize or exit a market as usually entails:
- Fire sale for existing stock
- Staff redundancy costs
- Funding lease commitments
- Funding any other liabilities
Smith’s City (SCY) was a good example with shareholders left with nothing.
Couldn't agree more about the lighting and entrances. Just isn't inviting and then under those lights it seems like you're in a cave and the light is receding fast......Not an environment that you want to be in.
It's as though they (a) Don't want customers coming in the door, and (b) They certainly don't want them to stay long.
A few simple changes could make a huge difference to the feel (and therefore foot traffic) of the stores.
theres 17 cps of potentially continuing operations earnings less the declining market we're in of course.
but at 1.10 thats a low PE.
WHS’s biggest issue is the hundreds of millions of dollars of leases it has committed to rent, many from the sale and leaseback of properties owned and developed by WHS. The proceeds from the property sales had been used to bolster profits and pay dividends in the short term while committing the group to longer term rental costs.
Meanwhile, underlying earnings are going downwards year by year.
Not a pretty picture and sad to see just how lost the group is now from a strategic point of view.
Cannot see any compelling reason to invest in the stock.
19.9% held by the James Pascoe inv Ltd now.
Is this not the signal for a possible takeover?
Normans must be more than $100m under water with WHS ‘investment’
still might be useful for backing say the Whitcoulls, Farmers & other bits into.
As good operators as Pascoes are with a long track record, they could probably with higher holding in WHS instill a degree of better discipline WHS appears to be begging for.. or who knows if a bargain basement price to mop up the majority of WHS came along, the lot could do well merged privatised away from prying eyes doing post mortems on the listed animals & fading shadows still alive & kicking on NZX ;)
A lousy buck & 7 pennies or even less must be headed toward half attractive & respectable territory for future games around picking up what remains of the bucket of bargain nuts & bolts ;)
Stephen Tindall will never sell his stake as long as he is around.
Probably going to zero isn't it...?
Surely just a question of whether its a 3, 5, or 10 year time frame before it does.
AI will soon tell you what to buy, and why, with a link to a (preferred)_ source_ online supplier, your personal AI bot will place the order, pay for it, and track the delivery process to your bunker / door.
No needs for a store.
GLTA.
No sh-ite.....
The Warehouse to be 'reshaped': 'We're not where we need to be'
https://www.odt.co.nz/business/wareh...ere-we-need-be
That's been obvious for so long. Where have the directors been during that time?
Surprised, not surprised.....
https://www.nzx.com/announcements/433265
The Warehouse Group – FY24 EBIT guidance
The Warehouse Group (“the Group”) today provides guidance for Operating Profit from continuing operations* (Earnings Before Interest and Taxation pre-IFRS-16, “EBIT”) for the FY24 financial year, based on retail trading conditions being experienced in the fourth quarter.
The Group said retail trading across New Zealand continued to be challenging with increasingly subdued consumer demand further compounded by mild winter weather, resulting in lower than anticipated fourth quarter sales.
The Group expects FY24 sales from continuing operations to be between 6-7% lower than the prior year, and FY24 EBIT, excluding the loss from discontinued operations and any potential restructuring costs, to be in the range of $22 million to $30 million, compared to $83.4 million in the prior year.
Interim CEO John Journee said, “Retail across New Zealand is under pressure, and we are no exception. Market conditions and cost of living pressures have continued to be challenging into our fourth quarter and we expect these conditions to continue through to our year end."
“We are taking decisive action internally to address areas we can improve. We are exercising tighter cost control and we have a laser focus on trading our core brands, The Warehouse, Warehouse Stationery and Noel Leeming.”
The Group will report its FY24 Annual Results on 26 September 2024.
* Continuing operations excludes Torpedo7 but includes results from TheMarket.com.
ENDS
Go woke, go broke - the warehouse is an excellent example.
Hard to believe that the company once had a market cap of over $3 billion.
This is a stark reminder of what's going on economically in NZ. Sure we can critique the business plan, but the bottom line is that money is tight. And nothing is going to change anytime soon. It's going to get even tougher.
It's a long shot blaming the weather for the sales performance.
Só ~$25m EBIT for full year ….not much NPAT after that no matter what ‘adjustments’ they come upmwith
Half year EBIT was $44m so second half a LOSS and a pretty big one at that
Here's part of the reason for their downfall....last weekend we were looking to replace a couple of aging smartphones - Noel Leemings staff had absolutely no knowledge of the product they were selling and would say anything to try and make a sale, and that's assuming you can actually find someone who is prepared to serve you to start with
Mild weather :ohmy:
It has been freezing in chch. May was one of the coldest ever.
The cold winds are blowing in from TEMUka
The Warehouse staff have been so indoctrinated with woke that they cannot absorb anything (especially good customer service) any more.
I can actually see the warehouse reverting into a few provincial stores only in NZ as the ones in the main centres close down one after another in the future. All the property sale & leaseback deals done to keep the group solvent5 (and paying dividends) have very long tail lease & rental liabilities - hundreds of millions of dollars.
Good luck to the warehouse getting a good CEO - who would want a crap job like that!
"All the property sale & leaseback deals done to keep the group solvent5 (and paying dividends) have very long tail lease & rental liabilities - hundreds of millions of dollars."
Balance, Im not sure that you understand that leases are renewed every several years, at that point the tenant can vacate and end the lease. Or maybe you do