The Warehouse Group has announced a net loss of $54.2 million, down from the $29.8 million net profit reported last year.
The group largely attributed the decline to the sale of its Torpedo7 brand, which it sold for just $1 to Tahua Partners in March 2024. However, it was also indicated that, even when excluding the losses from the Torpedo7 sale, profits still dwindled compared to the previous year.
“The poor financial performance we’ve reported this year is not acceptable,” The Warehouse Group chairwoman Dame Joan Withers said.
“The board and executive leadership team are acutely aware of the disappointment shareholders will be experiencing and the big job ahead of us to get the company back on track,” she added.
Withers said the year proved to be among the most difficult in the company’s 42-year history.
Group sales declined by slightly more than 6% as a result of decreasing consumer demand; margins remained stable at 33.6%.
“The economic climate in Aotearoa New Zealand has been difficult for most retailers, with inflation, high interest rates, and a weak economy significantly reducing consumer demand,” Withers emphasised.
“However, our trading performance and operational execution have fallen short and exacerbated these challenges.”
Interim chief executive John Journee considered the company’s performance “disappointing.” He also said the company “scored too many own goals.”.
“Our ecosystem strategy was too ambitious, and we took our eye off the ball on product. We held onto Torpedo7 and TheMarket.com too long, reacted too slowly to changing customer spending, and fell out of step with what Kiwi families want,” Journee stated.
“We’ve made mistakes, and we own that. But we know where we went wrong, and we’re already working hard to fix it.”
Journee indicated that the company’s strategy has been redefined moving forward.
“We’ve begun resetting our categories to bring in more trend and newness and better merchandising. This will strengthen our market position and improve profitability.”
He also said that the retail landscape continues to be challenging, and the company is cautious regarding the timing of a potential recovery in retail spending.
“We’re under no illusions of the challenges ahead of us. While we’ve been able to regain market share in our core retail segment in the first six weeks of FY25, our sales have been soft and our gross profit remains under pressure as we clear the last of our winter stock and continue to reset our product offer.”
“With our strategic focus firmly back on trading our brands and on renewing and energising our product ranges, the team and I look forward to being able to demonstrate progress in the year ahead.”
