If you asked a New Zealand 20 years ago when was the last time he went to The Warehouse, he would probably answer: I just went last weekend.
If it were now, ask a New Zealand person the same question, and his answer would have been last month, last month, or even forgotten......
This is the topic that has been discussed on Radio New Zealand in the past two days: The Warehouse is finally going to sell, why?
01
New Zealand's largest local retailer is selling to Australian private placement
The Warehouse, which has been in New Zealand for 42 years, was formerly affectionately known as the "Red House".
The company is New Zealand's largest homegrown retailer and has taken on the role of selling a lot of cheap goods to New Zealand people over the past few decades to improve their lives (mostly Made In China).
So much so that when the news of the sale came, everyone felt a little like a world away.
This week, the New Zealand Stock Exchange NZX announced that Australia private equity fund Adamantem Capital proposed to acquire The Warehouse Group for between $1.50 and $1.70 per share, which is valued at a purchase price of between $520 million and $590 million.
The acquisition has been backed by The Warehouse founder Sir Stephen Tindall, who and his Tindall Foundation will retain a portion of the company through a reinvestment program.
This means that the founding shareholders will receive the right to reinvest, while the other shareholders will not. Eventually, Tindall and its affiliates will own up to 50% of the acquired company, while the other shareholders will be bought out in full.
Now, only other existing shareholders need to vote to approve the proposal.
If approved (75% of shareholders voted in favour), The Warehouse Group will be delisted from the New Zealand Stock Exchange (NZX) and re-established as a private company.
02
How to do it in the past few years and how to lose it
During a discussion on radio in New Zealand, a guest said that 20 years ago, the only way to buy cheaper goods was to go to The Warehouse, "but now, I can go to K Mart and buy cheap goods online." ”
Another guest said that she felt that times had changed, but The Warehouse remained the same, and the feel of the store was still the same as it was 20 years ago.
Indeed, The Warehouse has had nightmares over the years, let's count them together:
The e-commerce platform worked for 5 years, and in the end, there was no harvest
In 2019, The Warehouse Group launched a flagship project, and the heavily built e-commerce platform TheMarket.com launched.
At that time, The Warehouse set a flag to make TheMarket the "Amazon of New Zealand":
"In the United States, there are 110 million households with Amazon Prime members, which will be their first choice for buying anything."
Of the 5 million New Zealand people, "we have sold to 3.9 million people and have good personalised data (big data)", it stands to reason that this business path looks good.
In May 2024, it couldn't hold it anymore and announced the closure of the e-commerce platform TheMarket.com that had been operating for 5 years.
Originally, I hoped to sell this platform to other capital, but after negotiating with several companies to no avail, I could only silently close the platform by myself, which is called a blood loss.
Chinese people have said that this year, there is a lot more fragrance, who will shop online in New Zealand all day.
More than 50 million outdoor brands were acquired, and 1 New Zealand dollar was sold
Another bloody project is the acquisition of Torpedo7.
Torpedo7 is an outdoor brand in New Zealand. When The Warehouse acquired Torpedo7 about a decade ago, it paid a total of NZ$52 million.
Then in February of this year, The Warehouse announced the sale of the Torpedo7 brand for $1.
You heard it right! But don't think that you can go to the top of your life with 1 knife.
When selling a brand for 1 New Zealand dollar, the buyer is not picking up a bargain, but indicating that he is in debt.
Torpedo7 is also a New Zealand brand, first founded in Hamilton in 2004.
The Warehouse sells a brand for $1 in order to optimize resources, and the purchaser needs to agree to take on Torpedo7's debts or other financial liabilities.
If the business is not sold, but simply closes the business, The Warehouse Group will face high employee severance pay and other closing costs.
The core business is losing money, and the high-paid CEO can only resign
The Warehouse的核心品牌包括三个：The Warehouse门店， Warehouse Stationary以及Noel Leeming。
Neither is the core business performance. The Warehouse Group posted a net loss of $23.7 million in the six months to the end of January. Among them, Noel Leeming, an electronic and electrical brand, fell the most.
另外，Warehouse Stationery也因办公家具需求下降而下降了7.5%。
Nick Grayston
In May 2024, CEO Nick Grayston, who had been in the job for eight years, announced his resignation, and during his tenure, major measures seemed to have failed.
In the past 8 years, the annual salary of this top wage earner in New Zealand has risen from NZ$1.77 million to NZ$2.8 million.
But after 8 years, The Warehouse Group is running out of money.
After cutting e-commerce and small brands, The Warehouse said it had no choice but to refocus on the business of the three core brands.
At this time, the founder, who had always owned the shares, finally couldn't sit still, and then there was a story of looking for an Australian private equity offer.
02
Australian media disclosed: I want to transform into a supermarket
If the ideal situation in the future happens, it should be a major shareholder who finds a big financier, takes over in a lower position, and then transforms and reshapes the brilliant story.
According to last year's annual report, as of July 30 last year, founder Tindall directly held 27.01% of the company's shares, and the Tindall Foundation held 21.31%.
Stephen Tindall, Group Founder
Prior to the announcement, The Warehouse shares were last trading at $1.43, down 21% over the past 12 months.
After the news, the stock price began to rebound:
Yesterday, the latest disclosure of Australia media that Stephen Tindall went out this time to find an Australian private placement buyout in order to make The Warehouse completely transform.
Following the acquisition, Stephen Tindall will return to the helm and his favourite direction is to build New Zealand's third-largest supermarket brand.
As we all know, New Zealand's lucrative supermarket industry is monopolized by two Australian giants, Woolworths and Foodstuffs, which occupy more than 80% of the market.
The Warehouse has made some attempts in this regard before.
Since last year, The Warehouse has decided to sell some fresh fruits and vegetables and has started a trial operation in 6 stores.
"In the future, this program will be expanded to more stores." Nick Grayston, CEO at the time, said.
"Bread, milk, eggs, cereal, toothpaste, toilet paper, pet food, and laundry and cleaning supplies are among the more popular shelves at The Warehouse, and fresh ingredients are not available before, so we are excited to test this batch of fruit and vegetables with our customers." He said.
The Warehouse has partnered with local vendors, and carrots, onions, potatoes, avocados, apples, sweet corn and tomatoes are also present in the pilot store.
This is a meaningful attempt. According to Australian media reports, The Warehouse's idea of entering the supermarket industry is serious.
This is a pilot store at The Warehouse in Wellington, New Zealand
Let's see, is there already a supermarket smell:
According to The Australia, Tindall wants to position itself as New Zealand's third-largest supermarket.
The Warehouse plans to break the duopoly of New Zealand supermarkets with better discounts.
New Zealand retail industry insiders say that private equity capital's extensive experience in streamlining businesses could be an ideal combination when combined with Tindall's deep understanding of the New Zealand market.
The retail market is losing money,
Anyway, New Zealand people also use Chinese e-commerce platforms......
Now the founder is out of the mountain and ready to change the track,
If successful,
It's a good thing for people who are New Zealand in crisis......