Warehouse buys majority stake in online retailer Torpedo7 for up to $33m
Warehouse Group n (NZX:WHS) which reports its first-half profit this week, will spend up to $33 million buying online retailer Torpedo7, just months after buying consumer electronics chain Noel Leeming Group.
The country's biggest listed retailer will pay $20 million upon settlement, and up to a further $13 million over the next three years if earn-out targets are met, for a 51 percent stake in Torpedo7, it said in a statement. The online retailer operates the Torpedo7, 1-day and Urban Daddy websites across Australia, and will continue to operate as a standalone business.
"The strategic partnership created by the purchase of a majority shareholding in Torpdeo7 Ltd is another example of our continued focus on the expansion of our multichannel business enabling us to offer customers a retail experience when, how and where they want it across a broader range of products," chairman Graham Evans said.
In December, Warehouse bought the unprofitable Noel Leeming chain for $65 million, saying it will add between $4 million to $6 million to earnings before interest and tax in the six months ended Jan. 27, 2013.
The Torpdeo7 purchase is expected to settle early next month. The remaining shares will stay with existing investors.
Warehouse is set to report first-half earnings on Friday, and Forsyth Barr analyst Andy Bowley expects a 13 percent gain in earnings, before interest, tax, depreciation and amortisation to $99.9 million on sales of $1.11 billion.
(BusinessDesk)
Back to home
Back to top
Print
Latest
NBR SERVICES
SUBSCRIPTIONS
Sign up for NBR subscriber content or email alerts
Comments and questions11
This, together with previous purchases of this ilk, show hallmarks of desperation from the WHS...who clearly don't have any confidence in their big red shed strategy
Or are they just diversifying so they have a piece of all markets? seems logical to me to want to own a piece of every different market.... they are the wal mart of NZ after all
Yep you are dead right they are definately not what they advertise {Where everyone gets a Bargain} that has long gone.
After a series of CEO's where they try to impress their board by lifting the bottom line, they have now simply run out of options, as the bottom line has reached it's peak, and now everyone else undercuts them easily, probably caused by the lack of new manufacturers trying to get a foot hold in the retail market, the Warehouse is simply not what it used to be in our neck of the woods, K-Mart leaves them in their dust, not only in quality but in price and service too, and we are just jo bloggs customers.
That's great if you happen to live near a K-Mart, but their presence in New Zealand is sparse, with my nearest K-Mart (without crossing the strait) being nearly 300km away
On top of that, K-Mart's online presence here offers little more than an online version of their catalogue
ive learned to buy direct from China online, you can often get the same items for 1/2 the price of any retailer in NZ.
good purchase to increase their online presence . This seems to be what most big retailers are doing now bricks and mortar presence as well as online.
TWL is one of the most innovative retailers in the country. I've worked closely with it for sometime and expect solid long-term returns. Mark is doing a good job, but needs some time to turn around such a big ship.
Yes!! but you have to agree!! the "Everyone gets a bargain" slogan now does not apply anymore, the bargain's seem to be elsewhere.
Just today I went into the red shed to get a puncture repair kit for my grandsons little bike, they had none but the price ticket stated $6.99 I went down the road {advised by another customer} to the 2-3-5 dollar shop and picked one up for $2.50 across the board now they are consistanly dearer than elsewhere, another example was a Soda Stream start up kit, Red Shed price $120 at 2 other outfits the exact same was $79.99 the syrups are a $1 less at most other retailers, this sort of comparrison is now quite common, I for one really do hope they get back to where they were, as it used to be great to take little ones in there to buy birthday & Xmas presents but not anymore.
They used to make less and sell more, now they make more and sell a lot less it would seem.
They probably make most of their profit on the obscence amount of money they charge for a plastic bag. I use to spend circa $2000 + annually with them, but refuse to shop there anymore unless I really have to. And when I do, I tell them how I feel. But do they change anything..?? No. Nothing. Duh!
It would be nice to know why TWL are such a good buy. Just because they are online in Aus and suit Stephen T's penchant for investing (spending hard cash) on IT ventures.
Kiwi buyers online, if my teenagers are a reasonable selection, are buying everything they can from Europe and USA so long as the $kiwi is less than $400 landed. So many sites offer almost zero shipping, the goods arrive in 3!!!! days and with the exchange rate as it is "online without GST" is a no brainer. However the IRD and ATO must be considering how they can get their cut, and if they figure it out the Torpedo7 investment my be torpedoed.
they still have good bargains, torpedo 7 need more range, wiggle is an example and in many cases they ship for free