WHS - Warehouse Group

[Balance]

I get the impression Nick is not telling us the real story

This from yesterday - our forecast for H1 Adjusted Net Profit from continuing operations for the Group is $32m-$35m, which is 22%-28% down on the comparative continuing operations performance last year.

That implies H1 last year was about $39m odd. Actual reported number was $39.7m but this included a loss by Finance Division

In the AGM presentation Nick was proud of the slide that highlighted continuing businesses were doing quite well (like H2 was better than prior year). That slide showed continuing businesses NPAT (adjusted if course) for H1 to be $45.0m

So shouldn’t the $32m to $35m this year be compared to the touted $45m last year?

But when they reverse his bonus accrual in H2 the H2 result will be a boomer

Got me totally stuffed has Nick

Veritas love this continuing business crap as well

Well spotted, W69.

Can fool some of the people all of the time, and all of the people sopme of the time - BUT not ALL of the people ALL of the time.

[Beagle]

I get the impression Nick is not telling us the real story

This from yesterday - our forecast for H1 Adjusted Net Profit from continuing operations for the Group is $32m-$35m, which is 22%-28% down on the comparative continuing operations performance last year.

That implies H1 last year was about $39m odd. Actual reported number was $39.7m but this included a loss by Finance Division

In the AGM presentation Nick was proud of the slide that highlighted continuing businesses were doing quite well (like H2 was better than prior year). That slide showed continuing businesses NPAT (adjusted if course) for H1 to be $45.0m

So shouldn’t the $32m to $35m this year be compared to the touted $45m last year?

But when they reverse his bonus accrual in H2 the H2 result will be a boomer

Got me totally stuffed has Nick

Veritas love this continuing business crap as well

Top post mate, you're on to it ! Creative accounting at its finest...all for their largess incentive scheme of course. This is pure naked management greed dressed up as something that will transform a business that's effectively a very old sheep into a fresh young hogget. This is beneficial to shareholders, YEAH RIGHT, where's my Tui ?

[horus1]

Mauro I would get out. Dont buy any retail stocks ,to much challenge from online especially with no GST on items under $400. Get another broker /advisor.

[couta1]

Mauro I would get out. Dont buy any retail stocks ,to much challenge from online especially with no GST on items under $400. Get another broker /advisor. Agree with getting out but not with don't buy any retail stocks, switch your WHS proceeds to HLG would be my advice.

[MauroNZ]

I would concede they're playing their cards, (a systemically poor hand ?) as well as they can with this new everyday bargain thing. T.V. advertisements about everyday value are good quality, reasonably catchy and aimed squarely at the target demographic. K Mart with their better pricing and slightly more upmarket shopping experience must be a real thorn in WHS's side though and Briscoes aren't ever going to go away as a competitor either....then there's all the trend towards online buying.

One would suppose that they justify the most recent decline in sales stat's by saying they're repositioning the brand down into everyday value pricing, (quite why they ever abandoned that strategy in the first place I'll never know), and now they're justifying a significant profit decline under the auspices of further investment in brand development, (this seems like a real value creation strategy...for management), but whether shareholders ever see any benefit from it is quite another matter.

Maybe Nick can turn this slow motion train wreck into a super super slow motion train wreck, who knows... but its hard to see how they ever get traction into turning this around and growing profit again.

MauroNZ - Welcome to the forum. As you can see by today's posts I believe the long term prognosis is poor. On the other hand there are a couple of retailers that I believe are doing an outstanding job and their long term future looks sound. HLG, (I hold) would be my pick in this sector. Briscoes is also worth considering.
Briscoes has a less defendable position against the likes of Amazon as its easy to order almost anything Briscoes sells online. On the other hand HLG occupies a nice niche in the middle of the rag trade and I believe the vast majority of people prefer to visit a store before they purchase for my rule of the four F's.
They want to check in person the fit, the feel, the fashion and the fabric. Microwave ovens by way of example like Briscoes sell don't really need that sort of checking do they ? :) I therefore feel HLG has a sound future and a good defensible position in the retail market.

Thanks Beagle, I've been reading the forum for a few years but I couldn't join (e-mail address provider restriction until Vince sorted out for me).

You know the funny thing? at the time of getting the recommendation from the advisor I wanted to buy HLG as I like the business and I've been a customer of them (despite I could see a decrease in quality of the shirts). And I've got recommended WHS, and surely now I regret. I have to say I new very little of the ratios at that time but I guess still lack of experience played against.

Just thinking that I've paid $3.74 and never got any close to is a bit frustrating. But I have to say I didn't want to sell as I thought would be a temporary down as for instance HLG had it lately. In fact just checking a 2014 report when HLG had a price of $3.10 :S which at that time was similar price of WHS and Craigs recommended to hold it.

[Beagle]

You're welcome. Really good idea as a newbie around here to go back to the start of the thread and read the whole thing to get the real flavor of the stock.
I don't want to make disparaging remarks about Craigs because more often than not they make good calls but like the rest of us they don't get every call right that's for sure !
Sometimes it makes more sense to simply cut your losses and look for something that's going to grow for you. All the best.

[Sideshow Bob]

Mauro, years ago when I was overseas and had some funds under management, Craigs put me into WHS at the height of their powers. Similar result and while I've tried to banish the memory, I think it was a circa 40-50% capital loss.

Overall, at the time under-performed the market. Like what the Beagle says, they have good and not-so-good selection, and also not trying to be disparaging.

[macduffy]

Yes, wise words from the hound there, Mauro. In over 50 years of investing I've found that taking a loss is still the hardest part of the business. There's always some rationale that can be found to justify hanging on for the recovery! In my own case I left it too long with WHS and suffered accordingly, selling out about a year ago.

Still trying to "let my profits run and sell my losses".

[percy]

Mauro, years ago when I was overseas and had some funds under management, Craigs put me into WHS at the height of their powers. Similar result and while I've tried to banish the memory, I think it was a circa 40-50% capital loss.

Overall, at the time under-performed the market. Like what the Beagle says, they have good and not-so-good selection, and also not trying to be disparaging.

I use Craigs,but prefer to make my own mistakes...lol.

[MauroNZ]

That's a tough one, banking 80% capital losses or holding for the dividend and possibly more capital losses. How's the net position looking? I'd be asking your Craigs advisor why they kept you in a sustained capital losses share, and whether they ever admit errors of judgement and get their clients out before it's a basket case? Or do they think WHS is a recovery story? Then ask yourself about the rest of their advice.

I keep most of their reports and all of them recommends HOLD. I guess I should have considered Nigel Mccarter rule (from his book 4&20 Rules) when says "if the share price drops by 30% from the 52-week high, sell". My guess is because my position is not big then I will hear something just if I ask. Though I've learned through this forum not to take it blindly their recommendation but I acknowledge I've been slow to react.

[MauroNZ]

I agree with Beagle. WHS is never going to be a growth company - there's so much transformation required and intense competition I just can't see it happening. They have a lot on their plate. Now that's not to say I don't see them paying sound dividends and lasting around, but the chances of the share price going up to anywhere near where it used to be in my opinion is very low.

Briscoes has an excellent track record (better than Hallensteins and definately WHS), however their growth seems to be slowing, especially with the housing market lagging. Personally I don't see Amazon as a big threat to them in the short term and at a PE of 12ish that would be the safest retail bet imo.

Hallensteins is a little more risky at the current SP but has a very strong record of being a brilliant dividend payer. They are performing extremely well at present and seem to have good growth opportunities in Australia. Currently its my largest capital position, but I think it's one I'll watch with a close eye over the next year.

Soooo imo you're better off in either companies than sticking around with WHS

DYOR

Thanks mate, I'm considering that or better get off retail. I also hold MHJ and that one has been more "stable".

[percy]

Thanks mate, I'm considering that or better get off retail. I also hold MHJ and that one has been more "stable".

Don't be in too big a hurry to sell your MHJ.

[MauroNZ]

Mauro I would get out. Dont buy any retail stocks ,to much challenge from online especially with no GST on items under $400. Get another broker /advisor.

You are right, however I also think if for instance need an iron or whatever that is small and not worth the wait and time to look online still some retail would be needed but probably not that big.

[MauroNZ]

Agree with getting out but not with don't buy any retail stocks, switch your WHS proceeds to HLG would be my advice.

Thanks, btw I follow your opinions of SUM as well.

I'm considering HLG but also switching to MEL as I also have MHJ so I guess enough retail with one ;).

[MauroNZ]

You're welcome. Really good idea as a newbie around here to go back to the start of the thread and read the whole thing to get the real flavor of the stock.
I don't want to make disparaging remarks about Craigs because more often than not they make good calls but like the rest of us they don't get every call right that's for sure !
Sometimes it makes more sense to simply cut your losses and look for something that's going to grow for you. All the best.

No worries mate, I prefer the blunt way rather "oh well mistakes happens".
Would you mind sharing your criteria for selling? Not trying to imitate but to think how much still I need to learn.

[MauroNZ]

Mauro, years ago when I was overseas and had some funds under management, Craigs put me into WHS at the height of their powers. Similar result and while I've tried to banish the memory, I think it was a circa 40-50% capital loss.

Overall, at the time under-performed the market. Like what the Beagle says, they have good and not-so-good selection, and also not trying to be disparaging.

I understand and thanks for the advice. Is also good to hear from another stories. I guess should wait for the full report and see from there. But also being the only one that bad is what made me hold it for that long.

[MauroNZ]

Don't be in too big a hurry to sell your MHJ.

Not at all, just saying that is the one I see more stable in the retail :)

BTW, I've read two of the books you recommended here "Aim, fire ready" and "The Zulu Principle".

[percy]

Not at all, just saying that is the one I see more stable in the retail :)

BTW, I've read two of the books you recommended here "Aim, fire ready" and "The Zulu Principle".

Just keep putting into practice what you read in "The Zulu Principle."
It really works.!!

[winner69]

Just as well WHS not an Aussie company or covered by Aussie brokers/analysts

Warehouse problems mirror those of Myer to some extent in trying to become a 'modern day' retailer.

After the latest profit warning saw Credit Suisse analyst Grant Saligari slash his price target for the stock from 56¢ to 20¢, and say things like "With Myer reporting a deteriorating sales trend and a precipitous profit decline, there appears to be little value for existing shareholders,"

OUCH

Is our Nick heading the same way?

[JeremyALD]

Just as well WHS not an Aussie company or covered by Aussie brokers/analysts

Warehouse problems mirror those of Myer to some extent in trying to become a 'modern day' retailer.

After the latest profit warning saw Credit Suisse analyst Grant Saligari slash his price target for the stock from 56¢ to 20¢, and say things like "With Myer reporting a deteriorating sales trend and a precipitous profit decline, there appears to be little value for existing shareholders,"

OUCH

Is our Nick heading the same way?

When it comes to messes, there arent many able to compete with Myer. IPOd at $4.10 is now 55 cents. They have continually destroyed shareholder value and none of their businesses are performing. Have you read their announcement? It's as bleak as they come.

I'd say the WHS is a much better business, but that's not saying a lot

[Rep]

I had the gas struts on my kitchen cupboard doors give up the ghost and wandered down to the hardware store to get replacements. After looking at options I went online and bought four units that will be straight swaps for about a quarter of the price of something that I will have to install as they aren’t straight swaps - landed cost from Amazon USA at NZ$37.25 incl freight.

Don’t get me started on shoes, kids clothes, books and nursery items.

More choice. Better price. And GST wouldn’t have made any difference to who I make purchase.

[Beagle]

No worries mate, I prefer the blunt way rather "oh well mistakes happens".
Would you mind sharing your criteria for selling? Not trying to imitate but to think how much still I need to learn.

Just noticed your post. I have never been a shareholder in WHS. This business has been in systemic decline for years. Prior to that the PE was too high.

[winner69]

When it comes to messes, there arent many able to compete with Myer. IPOd at $4.10 is now 55 cents. They have continually destroyed shareholder value and none of their businesses are performing. Have you read their announcement? It's as bleak as they come.

I'd say the WHS is a much better business, but that's not saying a lot

Myer CEO and our Nick talk the same language and use words like omnichannel, consumer intimacy etc and both are convinced their strategy is working and they are on the path to transformation success or something. It sort of makes me wonder if WHS going doen the same route as Myer ...with much the same result

WHS shareprice hanging in over 2 bucks .....go below that could be interesting ....might set off a sell off and put it where some would say it rightly should be

[winner69]

The 2 bucks held, just. Go under 2 bucks and the share price might go into free fall ...who knows

We may as well follow the Myer train wreck. Same strategy as WHS and the CEO's talk the same lingo. Whoops it's now the ex CEO of Myer as he was sacked today for taking too long to right the ship. Maybe our Nick is for the the high jump as well?

http://www.smh.com.au/business/retail/existential-crisis-even-solly-lew-will-struggle-to-save-myer-20180214-p4z0ad.html


The article mentions a burdensome operating lease commitment of $2.7 billion spread out over 30 years. Warehouse Group has much the same problem with $740m in operating lease commitments

Hope like hell the share price stays over 2 bucks

[winner69]

Big week for Nick as he prepares for his Strategy Update on Thursday. Half year results as well but we already know they are pretty shockingly the focus will be on the all important ‘strategy’

Nick fine honing his slides. Hope he’s come up with some new phrases and buzzwords ... ‘ new rules of retail’, ‘evolve’, ‘platform’, ‘transformational’, ‘counter factual’ have been used too much ...he needs to refresh the lingo.

The strategy bit better be good but I think the market is also looking for a pretty good full year forecast number.

Share price just hanging in there above 2 bucks ....I think Nick knows that if it breaks below that 2 bucks it’s all downhill.

Thursday will be interesting.

[Balance]

Big week for Nick as he prepares for his Strategy Update on Thursday. Half year results as well but we already know they are pretty shockingly the focus will be on the all important ‘strategy’

Nick fine honing his slides. Hope he’s come up with some new phrases and buzzwords ... ‘ new rules of retail’, ‘evolve’, ‘platform’, ‘transformational’, ‘counter factual’ have been used too much ...he needs to refresh the lingo.

The strategy bit better be good but I think the market is also looking for a pretty good full year forecast number.

Share price just hanging in there above 2 bucks ....I think Nick knows that if it breaks below that 2 bucks it’s all downhill.

Thursday will be interesting.

Spent a few dollars at The Warehouse over the weekend - some stuff for the room. Decent quality and design, reasonably priced so happy to buy.

Can't help though but notice the amount of space taken up by the sunset product businesses - books, DVDs, music and toys.

I can't see how Warehouse is going to be able to box itsway out of the horrendous leases they have around the country from the salev and leaseback deals they have done on their properties.

You can only sell properties for so long and the Warehouse is NOT a property company!

[Beagle]

What's the bet Balance that a lot of investors who have bought those Warehouse buildings in due course will have a white / red ? elephant on their hands as the company gradually rationalizes its retail footprint going forward by not renewing many of the leases in due course.

[whatsup]

What's the bet Balance that a lot of investors who have bought those Warehouse buildings in due course will have a white / red ? elephant on their hands as the company gradually rationalizes its retail footprint going forward by not renewing many of the leases in due course.


Yeh, during the 90's 2000's and to date the warehouse destroyed hundreds of Mums & Dads small businesses through out N Z and now its happening to them, Stephen reflect of their history because you and your s hers are next, enjoy !

[Beagle]

Yeh, during the 90's 2000's and to date the warehouse destroyed hundreds of Mums & Dads small businesses through out N Z and now its happening to them, Stephen reflect of their history because you and your s hers are next, enjoy !

All the proof you need that what goes around comes around ? Karma ?

[Balance]

What's the bet Balance that a lot of investors who have bought those Warehouse buildings in due course will have a white / red ? elephant on their hands as the company gradually rationalizes its retail footprint going forward by not renewing many of the leases in due course.

I think that is a given.

The Warehouse knows its heydays are well and truly over and its strategy of having a warehouse within 20 mins of everyone is also over. Matter of deciding which one to close when the lease periods are finished.

An idea of how deep The Warehouse has dug itself in the situation :

Lease commitments :

2017 $739m
2010 $180m

Lease commitment for next year :

2017 $120m
2010 $52.7m

WHS has effectively been paying dividends from selling its future profitability.

Who wants to invest in a company like that!

[Beagle]

No question about it those are staggering numbers for all the wrong reasons ! No question this dinosaur is in long term systemic decline.

[Jaa]

Only viable option I can see for them is to start a supermarket chain to take over those leases. Not the extra half way house rubbish they tried, go all in.

In a country where the owners of a single Pak n Save can be worth $60m, the profit margins are there.

[Balance]

Only viable option I can see for them is to start a supermarket chain to take over those leases. Not the extra half way house rubbish they tried, go all in.

In a country where the owners of a single Pak n Save can be worth $60m, the profit margins are there.

Those Pak n Save supermarkets are rumored to make between $3m to $5m a year!

Warehouse has lost the opportunity to set up as a supermarket chain imo - market is already saturated by the two existing players.

Where I stay, there's 4 Countdowns, 2 Pak n Save and 3 New Worlds all within 10 minutes drive! One Countdown is closing soon however as the other is within 3 minutes drive! Madness.

[Sideshow Bob]

Those Pak n Save supermarkets are rumored to make between $3m to $5m a year!


Quite likely true. Why they get firmly held by the families that own them, and passed down to the kids, or get them into their own supermarket.

In Dunners, when they put a new Countdown in Sth D, they estimated that the impact on the local Pak N Save might be a loss of 27% of turnover, equating to $23m. Means they were turning over more than $85m through a supermarket.

That was 8 years ago!

[winner69]

Nick finished his presentation and pretty pleased with how it looks....and he’s introduced a few new buzzwords

Over theme remains the retail world is changing and we are changing with it and putting platforms in place to ensure our future and excellent progress is being made....but it will take time

Should appease a patient market

[winner69]

WHS a growth company at last .....from the headlines

EARNINGS PER SHARE
9.2 cents per share versus 3.9 cents per share in 2017, an increase of 135.9 %

That’s pretty good growth

[RTM]

WHS a growth company at last .....from the headlines

EARNINGS PER SHARE
9.2 cents per share versus 3.9 cents per share in 2017, an increase of 135.9 %

That’s pretty good growth

https://www.nzx.com/announcements/315243

Please read above link in conjunction with Winners comment......

[winner69]

Reading everything it seems that the Warehouse Group are saying that declining profits are ‘good’ as long as the decline is expected and anticipated

Anyway after a much improved H2 they should make $50m profit this year (on some fandangled definition of profit) and as long as the divie remains intact it’s all honky dory.

[BlackPeter]

They should not have put all the "decreases" into the begin of the announcement. Creates bad vibes. Will we see the today a drop through the magical $2?

[winner69]

They should not have put all the "decreases" into the begin of the announcement. Creates bad vibes. Will we see the today a drop through the magical $2?

And the drops were on things like ‘Continuing Business’ as well

But looking into the future things look bright so the $2 should hold for now ....good divie though

[ratkin]

WHS a growth company at last .....from the headlines

EARNINGS PER SHARE
9.2 cents per share versus 3.9 cents per share in 2017, an increase of 135.9 %

That’s pretty good growth

Surely a mistake, how is that even possible given the decline in all the other numbers

[Beagle]

Looking at the Noel Leeming result and profit growth you'd be forgiven for thinking this is the golden child severly handicapped by an aging and slowly dying parent.

[Ogg]

Looking at the Noel Leeming result and profit growth you'd be forgiven for thinking this is the golden child severly handicapped by an aging and slowly dying parent.

They need to spin off Noel Leeming.

[Balance]

They need to spin off Noel Leeming.

Heavens forbid!

Noel Leeming has gone from Bhatnagar to Eric Watson to Private Equity to Warehouse!

Enough torture for the poor souls working in there!

[Ogg]

Heavens forbid!

Noel Leeming has gone from Bhatnagar to Eric Watson to Private Equity to Warehouse!

Enough torture for the poor souls working in there!

They need to spin off the Warehouse. :D

[winner69]

Looking at the Noel Leeming result and profit growth you'd be forgiven for thinking this is the golden child severly handicapped by an aging and slowly dying parent.

...but surely it’s the world class management at WHS that’s driven that growth


Looking at the Noel Leeming result and profit growth you'd be forgiven for thinking this is the golden child severly handicapped by an aging and slowly dying parent.

What you reckon NL worth if floated anyway?

EBIT maybe $30m this year .....so npat say $20m.

[Beagle]

...but surely it’s the world class management at WHS that’s driven that growth



What you reckon NL worth if floated anyway?

EBIT maybe $30m this year .....so npat say $20m.

:lol: :lol: Thanks for the good laugh mate.

Maybe a PE of 15 with the way Noel Leeming is growing ?, so maybe $300m.

[winner69]

:lol: :lol: Thanks for the good laugh mate.

Maybe a PE of 15 with the way Noel Leeming is growing ?, so maybe $300m.

Growth just didn’t happen ...has to be good leaders / management somewhere in the mix

So $300m for NL .....wHS market cap $700m .......hmmmm

[Beagle]

Growth just didn’t happen ...has to be good leaders / management somewhere in the mix

So $300m for NL .....wHS market cap $700m .......hmmmm

Give it a few years and Noel Leeming will probably account for the vast majority of the value in the group in my opinion.
Three years hence, my prediction, market cap $400 - $500m, Noel Leeming value approx. $400m.

[winner69]

Give it a few years and Noel Leeming will probably account for the vast majority of the value in the group in my opinion.
Three years hence, my prediction, market cap $400 - $500m, Noel Leeming value approx. $400m.


For your sake I hope they float it soon

You’d love another growing retailer in your portfolio eh

[Beagle]

For your sake I hope they float it soon

You’d love another strongly growing retailer in your portfolio eh

Fixed that for you mate. Yeah looks almost as good as HLG :)

[percy]

You have got to be joking.!

[Beagle]

We're talking about the Noel Leeming division that grew profit 66% after growing profit last year as well.
Previously missed the fine print
Operating profit for the half was $15.3M, an increase of $6.1M or 65.7% on HY17. The operating profit result was helped by a $2.7M non-recurring item, being a change in accounting treatment of supplier funded store fixtures.

Pretty creative to change profitability because of that and this represents somewhere near half the profit growth for the period so actually probably not anywhere near as good as HLG but definitely the jewel in the otherwise very tarnished / (crumbling ?) crown of the WHS empire !

[winner69]

Beagle — NL operating profit (ebit) since 2013 has been $$11.0m, $11.3m, $6.4m, $12.1m and $19.3m in F17 and heading to say $28m this year

Again ....profits improved since our man Nick took over ...plus Team Warehouse of world class managers.

[winner69]

Love this bit ...suppose its good for the future and means more than just started ads on TV

 RFP for Media planning and buying in progress. The plan is to unify our media planning and buying behaviours with a single fully-integrated, tech-enabled partner for the entire business.

[percy]

Heavens forbid!

Noel Leeming has gone from Bhatnagar to Eric Watson to Private Equity to Warehouse!

Enough torture for the poor souls working in there!

You missed Noel Leeming himself,then Smiths City,before Sir Roger Bhatnagar/Greg Lancaster floated it.
I seem to remember Bhatnagar/Lancaster were the only ones who made money out of it.
People also forget WHS only brought NL, to access leading brands,who would not supply WHS.
We must also remember HBHiFi/Smiths City,as well as Harvey Norman, either have,or are part of much larger buying groups than WHS/NL.

[winner69]

Very little said about the huge accrual for management bonuses this half year ...keeping a low profile good strategy.

The Chair did say in her intro — If we backed out all remuneration incentives from the first half numbers for this year and last year, the difference in underlying performance is (1.7)%.

So instead of being 17% down as reported they would have only been 1.7% down if the bonuses weren’t considered necessary. And the full year forecast is for less profit as well.

See .. declining profits can be a good thing

Just as well the shareholders didn’t take a pay cut on their divie

[Beagle]

I still think the way they're layering on the incentives for a business model in systemic decline is one of the greatest moral outrages this year.
Extra management incentives for lower profit...yeah that makes "perfect" common sense.

[winner69]

Had to clarify their guidance but still doesn’t seem to make sense

Assuming they are using F17 Adjusted profit of $68.2 m (which ties in with their F18 forecast $50m to $53m being 22% to 27% less) then H2 is going to be a shocker

That forecast implies that H2 Adjusted Profit is going to be 32% to 47% less than same period last year (H1 was only down 16.4% remember ...including bonuses).

Doesn’t seem right does it ...things getting worse v last year as the year goes along

Too many types of profit - reported and adjusted and continuing etc etc might have me confused ..but they may nave confused themselves as well

[BlackPeter]

Had to clarify their guidance but still doesn’t seem to make sense

Assuming they are using F17 Adjusted profit of $68.2 m (which ties in with their F18 forecast $50m to $53m being 22% to 27% less) then H2 is going to be a shocker

That forecast implies that H2 Adjusted Profit is going to be 32% to 47% less than same period last year (H1 was only down 16.4% remember ...including bonuses).

Doesn’t seem right does it ...things getting worse v last year as the year goes along

Too many types of profit - reported and adjusted and continuing etc etc might have me confused ..but they may nave confused themselves as well

Not really following WHS anymore, but heard their CEO talking on National Radio about "investments into the future" and /or restructuring costs which would accrue in the second HY but only pay benefits in FY19 (and beyond - if they get it right). This might explain reduced profits in the short term ...

He mentioned as well something about timing being of the essence, that the competition does not wait and that they are confident in the strategy but that the problems tend to come with the execution. Sounded like he has been there before ;) - good man;

[winner69]

Not really following WHS anymore, but heard their CEO talking on National Radio about "investments into the future" and /or restructuring costs which would accrue in the second HY but only pay benefits in FY19 (and beyond - if they get it right). This might explain reduced profits in the short term ...

He mentioned as well something about timing being of the essence, that the competition does not wait and that they are confident in the strategy but that the problems tend to come with the execution. Sounded like he has been there before ;) - good man;

Yes he’s been there before ....with Sears

They are still around ....aren’t they?.....but you don’t want to look at their share price chart if you are a WHS shareholder

[Balance]

Yes he’s been there before ....with Sears

They are still around ....aren’t they?.....but you don’t want to look at their share price chart if you are a WHS shareholder

CEO probably had no idea of the sale and leaseback cost legacy - I reckon that's the killer now.

[winner69]

Those bonuses (accrued) in H1 were $6,5m after tax or $9.0m gross.

To make sense of their guidance of npat for the full year npat being up to 27% less than pcp (ie H2 47% less) I would hazard a guess that another $6.5m is still to be accrued.

If so annual bonuses would be ~$18m Gross. These are ‘new’ bonuses and never been part of rem packages in the past.

In context this is saying we will make about $66m this year but bonuses will reduce that by $13m (all after tax)....we will be richly rewarded for making about the same as last year.

That’s how I see it anyway ....not always right in my assessment of things and this may be one of those times. Dropped an email to company about this ...don’t expect a reply.

At least shareholders might still get $45m odd

[Beagle]

To the best of my knowledge this is the biggest bonus rort I can ever recall on the NZX for achieving nothing at all.
Where was Stephen Tindall the so called champion of what's morally right and fair in approving this extraordinary scheme ?
How on earth is this in the best interests of shareholders ?
Surely anyone with retail experience could tell them the only way forward was rationalization of the blue sheds and red sheds and everyday low pricing.
The way management are rewarding themselves you'd think they're the ones that discovered how to quadruple company profit overnight, (anything BUT).
Anyone staying a shareholder and condoning this corporate largess is endorsing this extraordinary destruction of their own earnings for goodness sake...

[Balance]

To the best of my knowledge this is the biggest bonus rort I can ever recall on the NZX for achieving nothing at all.
Where was Stephen Tindall the so called champion of what's morally right and fair in approving this extraordinary scheme ?
How on earth is this in the best interests of shareholders ?
Surely anyone with retail experience could tell them the only way forward was rationalization of the blue sheds and red sheds and everyday low pricing.
The way management are rewarding themselves you'd think they're the ones that discovered how to quadruple company profit overnight, (anything BUT).
Anyone staying a shareholder and condoning this corporate largess is endorsing this extraordinary destruction of their own earnings for goodness sake...

To be fair, the only thing keeping staff at the Warehouse now is the bonuses. The staff there do not exxactly have great expectations, do they?

Visiting any Warehouse store is a sobering experience in witnessing the decline and decline of a once highly successful retailer.

[Beagle]

To be fair, the only thing keeping staff at the Warehouse now is the bonuses. The staff there do not exxactly have great expectations, do they?

Visiting any Warehouse store is a sobering experience in witnessing the decline and decline of a once highly successful retailer.

Couldn't agree more but the size of the bonuses and effect on shareholder returns is eye watering.

[winner69]

I’ve been a ‘scholar’ of how The Warehouse has evolved from shortly after Stephen Tindall started it last century (in the 80’s). One day I might get around to publishing my paper.

This is interesting - something they published in 2003. Big picture stuff it’s not surprising nothing seems to have changed much in 15 years .......but one would think that execution of strategic actions haven’t been that good for a while seeing thwy are where they are today.


STRATEGIC AND BUSINESS PRIORITIES


An important aspect of managing The Warehouse is an understanding of the key strategic issues facing the company.

There are several key assumptions that influence our strategic view of the company as we move forward, they are:

1. no single competitive advantage is sustainable in the long term,
2. retailing does not stand still, it is a very dynamic sector,
3. value retailing will become the dominant retail proposition and
4. consolidation and internationalisation in the retail sector is accelerating.

The implications for the Group in its long term planning are significant -


we must continually reinvent ourselves - our retail formats, our merchandise, our marketing and promotion and the way we operate,

we must be relentless in challenging the cost structure of the business to secure our position as a low cost retailer,

we must continue to invest in our people capability and ensure we have people coming through the organisation who can take up leadership roles within the company,

we must maintain strong sales growth and grow market share and

we must continue to position ourselves as the leader in value retailing - choosing to reduce prices by reinvesting operational efficiencies into lower prices.





Our objective is to grow long term sustainable shareholder wealth. We will do this by maximising value in the existing businesses, continually growing the existing business and considering acquisition opportunities where they fit our areas of expertise.

[ratkin]

Difficult to know how much of the decline is due to poor decisions. They have been hit by a perfect storm which would have been difficult to find answers too.
In the 90s they had everything in their favour, cornered the market in providing the great unwashed with cheap tat, and did a good job of it.
Those same people are now the highest adopters of tat buying from online chinese stores. If your not offering the biggest bargain and are a red shed then trouble is going to be the only outcome. Add in the 2 dollar shops and they are being hit from all sides.

The writing been on the wall a long time, but what is the solution? They tried to join in with their own click to buy store, and various other things but they basically pissing into the wind.
The strategic initiatives outlined by Winner shows they knew what was coming, but in reality there was not much that could be done.

[winner69]

Rod Duke has his regular dig at The Warehouse .......Rod reckons all retailers should be doing well in these narket conditions and can’t ubderstand why some big ones seem to be struggling.

[Beagle]

Got an invite to a local Noel Leeming later this week for drinks and nibbles while they demonstrate their latest Kitchen appliances. At least they're trying something new, engaging with customers in live demonstrations. Reasonably impressive I think. Too scared to go LOL for the sake of my bank balance after Mrs Beagle hit me up for two new Lounge suites when we popped into Harvey Norman at the weekend. Ahhhh well...what do they say...happy wife, happy life.

[Jaa]

I was disappointed they didn't make a better go of Warehouse Money. They had a lot of existing advantages, large store footprint, large business and cross marketing opportunities, existing credit sales, NZX listing to raise capital, finance companies had been wiped out etc. Credit card competition in NZ is still very low compared to other markets. Instead they got out after only a year or two.

I guess the brand name "Warehouse Money" was their first and biggest mistake. Should have called it "Pounamu".

Supermarket sales and a thriving financial services arm, combined with their online outlets (which have been relatively successful) would have seen the company do well.

[winner69]

Seems the market loves Nick’s strategy and have renewed confidence in WHS

Balance - we might look back one day and say $2.00:was great buying.

Not for me at the moment though

[MauroNZ]

Seems the market loves Nick’s strategy and have renewed confidence in WHS

Balance - we might look back one day and say $2.00:was great buying.

Not for me at the moment though

Do you think so? volume at the moment is just 15.900.

[MauroNZ]

I've just found this article:

https://simplywall.st/stocks/nz/retail/nzx-whs/warehouse-group-shares/news/with-an-roe-of-14-25-has-the-warehouse-group-limiteds-nzewhs-management-done-a-good-job/

[winner69]

Shareprice up a lot since half year announcement

Surprising seeing that The Warehouse is over-spaced in a structurally challenged industry, with accelerated space rationalisation the key remedy.....something that the group could struggle with

[winner69]

I've just found this article:

https://simplywall.st/stocks/nz/retail/nzx-whs/warehouse-group-shares/news/with-an-roe-of-14-25-has-the-warehouse-group-limiteds-nzewhs-management-done-a-good-job/

Interested me enough to update some work I did to convince me to stay out of WHS

ROE not everything as markets love the easy way and use PE ratios as a valuation tool

But you can see from the table that WHS is a low margin business but doesn’t turn things over fast enough to make a decent ROE

Compare to Briscoes and HLG and you can see why over the years those two have been the most solid of retailers on the NZX

Table shows three components that make up each ROE ...quite interesting.

[percy]

W69.
Add LOV [asx] to the mixture and you will see why I LOVe LOV.

[winner69]

W69.
Add LOV [asx] to the mixture and you will see why I LOVe LOV.

Yes percy, Lovisa amazing

High margin ....good stockturns ....make plenty of money

Took a guess what full year sales and profit will be but even if I am out a bit might make difference to the story

[percy]

Yes percy, Lovisa amazing

High margin ....good stockturns ....make plenty of money

Took a guess what full year sales and profit will be but even if I am out a bit might make difference to the story

Thank you.
Best retail model I have ever seen.
Absolutely amazing.

[winner69]

Thank you.
Best retail model I have ever seen.
Absolutely amazing.

Sure is .....sell stuff the punters want and desire ....generate a good margin ....and do that a few times a year .....and make heaps

[MauroNZ]

Yes percy, Lovisa amazing

High margin ....good stockturns ....make plenty of money

Took a guess what full year sales and profit will be but even if I am out a bit might make difference to the story

Thanks so much both, W69 and Percy, very eyes opening to compare that.

[Balance]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12026384

"Jones said he personally knew the owner of The Warehouse premises in Kaikohe: "I know the guy who owns the property.

"They offered him a two-year lease. He went to his bank. He needed some certainty. The bank said 'you need longer than that'. He went back to the [Warehouse] and said 'I'm not independently wealthy, you're going to screw me and they summarily announced 'we're gone!'"

The beginning of the retreat of the Warehouse.

Fairly clear here that anyone who bought the stores from Warehouse on sale and leaseback basis are going to be screwed when WHS starts closing their stores.

[minimoke]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12026384

"Jones said he personally knew the owner of The Warehouse premises in Kaikohe: "I know the guy who owns the property.

"They offered him a two-year lease. He went to his bank. He needed some certainty. The bank said 'you need longer than that'. He went back to the [Warehouse] and said 'I'm not independently wealthy, you're going to screw me and they summarily announced 'we're gone!'"

The beginning of the retreat of the Warehouse.

Fairly clear here that anyone who bought the stores from Warehouse on sale and leaseback basis are going to be screwed when WHS starts closing their stores.Wasnt that long ago we were rueing the entry of Big Box retailers into rural towns. They had no guilt when the mom and pop SME's went bust on their arrival.

[Balance]

Wasnt that long ago we were rueing the entry of Big Box retailers into rural towns. They had no guilt when the mom and pop SME's went bust on their arrival.

Just as the car industry replaced and decimated the horse and carriage industry, the online retail industry will decimate the big warehouse type operators over time.

Sign of the changing times out there - Toyota's new distribution and pricing policy has caused considerable anguish (and futute pain) for previously highly highly rewarded and well paid salesmen who were making over $5k a car by offering only 5% discount when they were authorised to discount up to 10%!

[bull....]

closure in kiakohe just the start i reckon as the smaller stores in regional nz become ever more unprofitable

[Sideshow Bob]

Maybe Shane Jones splashed some cash - hey presto the closure in Kaikohe has been reversed!

[Jay]

Looks like it maybe to stay open now. Landlord has had second thoughts - who would want such a big space like that in Kaikohe

Don't think any politician should be sticking their oar in - it's a commercial decision, I would have thought

[couta1]

Six executives at the Warehouse earning over 1 million a year, up from one in the prior year. What an absolute joke and insult to shareholders, with massive underperformance, how can this be justified? Shutting up stores so these pigs can keep their snouts in the trough.

[winner69]

Six executives at the Warehouse earning over 1 million a year, up from one in the prior year. What an absolute joke and insult to shareholders, with massive underperformance, how can this be justified? Shutting up stores so these pigs can keep their snouts in the trough.

You must be mistaken Couts me old mate?

Not in NZ surely

[winner69]

Media hourly rate of all team members was $18.81

CEO earned 36 times that

Annual Report 2017

Numbers will be higher 2018

[couta1]

You must be mistaken Couts me old mate? Have a read of the latest Herald article me old mate.

[winner69]

Have a read of the latest Herald article me old mate.

Yes indeed

And this year there’s huge extra bonuses allowed for

[Baa_Baa]

Yes indeed

And this year there’s huge extra bonuses allowed for

What's the bonus for, turning up at work? Shareholders are revolting, or they should be.

[winner69]

Love the media ..... another nail in the coffin of Noel Leeming

https://www.stuff.co.nz/business/103458087/charges-against-noel-leeming-a-nail-in-the-coffin-for-retailers-expert-says

One of the comments says it starts with the CEO so fire him

He's one on that special bonus scheme .... might save a bob or two

[percy]

Love the media ..... another nail in the coffin of Noel Leeming

https://www.stuff.co.nz/business/103458087/charges-against-noel-leeming-a-nail-in-the-coffin-for-retailers-expert-says

One of the comments says it starts with the CEO so fire him

He's one on that special bonus scheme .... might save a bob or two

If you are a retailer you must trade as per the consumer laws.
As a customer, I note a lot of retailers stilll need to go on a learning curve.
The likes of on line traders such as Kogan, are happy to take Lemming's customers.

[waikare]

If you are a retailer you must trade as per the consumer laws.
As a customer, I note a lot of retailers stilll need to go on a learning curve.
The likes of on line traders such as Kogan, are happy to take Lemming's customers.

At this stage they are only charges, innocent until proven guilty, at the Tauranga branch I have always received good service and advice, a big plus is, one can get great discounts with the Gold Card.

[percy]

At this stage they are only charges, innocent until proven guilty, at the Tauranga branch I have always received good service and advice, a big plus is, one can get great discounts with the Gold Card.

Yes once they have been to court we will know the outcome.
My point is that retailers in general are not following consumer law.
This comes to light with faulty goods,where retailers continue to say it is up to the manufacturer to fix,when they have to either refund or replace themselves.It is not therefore an issue between the customer and the manufacturer.

[winner69]

Yes once they have been to court we will know the outcome.
My point is that retailers in general are not following consumer law.
This comes to light with faulty goods,where retailers continue to say it is up to the manufacturer to fix,when they have to either refund or replace themselves.It is not therefore an issue between the customer and the manufacturer.

Agree wholeheartedly percy

Too many consumers get fobbed off by a lot of retailers who take advantage of their ignorance as to what their rights are.

Noel Leeming not found guilty in a court of law yet but we all (including waikare) that are guilty as sin.

[Balance]

Agree wholeheartedly percy

Too many consumers get fobbed off by a lot of retailers who take advantage of their ignorance as to what their rights are.

Noel Leeming not found guilty in a court of law yet but we all (including waikare) that are guilty as sin.

Real competition for the brick and mortar retailers is definitely the online retailers.

Anyone ever try getting a refund or faulty goods returned to an online retailer?

I have and for most high value items, I will stick with Harvey Norman or Noel Leeming!

[hardt]

Real competition for the brick and mortar retailers is definitely the online retailers.

Anyone ever try getting a refund or faulty goods returned to an online retailer?

I have and for most high value items, I will stick with Harvey Norman or Noel Leeming!

Harvey and Noel are dying... This generation will not step foot inside either of these other than to browse what they want before they buy it for cheaper online.

- not saying they won't last forever... they are not the future of retail by any stretch of the imagination.

[100101]

I've never had a problem at Noel Leemings and prefer to buy from them if possible as they match prices.
Did buy a Dell computer from Dell lately and had the misfortune to talk to their customer service. Trouble was that it was utterly impossible to understand them and they dont like using email.

[westerly]

Harvey and Noel are dying... This generation will not step foot inside either of these other than to browse what they want before they buy it for cheaper online.

- not saying they won't last forever... they are not the future of retail by any stretch of the imagination.

"Reports of my death have been greatly exagerated " said Mark Twain and perhaps something similar applies to the Warehouse etc.
People love to shop and doing it on line is nothing like the real thing. The malls seem to be always full of shoppers and the Warehouse queues do not seem to be getting any shorter.
I could be biased, I hate shopping.

westerly

[BlackPeter]

...
Anyone ever try getting a refund or faulty goods returned to an online retailer?
...



Actually - yes.

Had some years ago warranty issues (main board dying after roughly one year of service) with a LapTop I purchased online and got reasonable (and free) service through a repair center in Christchurch the online dealer (an Auckland company) referred me to. And yes - while the repair took something like a week, I do have no reason to assume that a repair performed through Noel whatever would have been faster ...

[winner69]

For years I bought everything electrical from a local owner operated 100% Store (newbolds if I recall) Nice guy who always matched prices and would even do things like deliver and set up the new TV (if you acted dumb) as part of the service.

He sold out and the store became a LV Martin store and then a Smiths City store and is no longer exists.

Those were the days .....nothing around like it now.....that’s progress I suppose ....cest la vie

[Sideshow Bob]

Doesn't everybody buy an extended warranty on their electrical goods? :p

[Sideshow Bob]

When shopping for a new TV lately, at both Noel Slemmings and Havey Snormans, both were showing me how much money they made on the sale. Noel were trying to tell me they made 0.25% on the sale - so once they took out the credit card fees, they wee selling at a loss.....

Surely they can't be banking on just the extended warranty (which they didn't push hard at all) or the overpriced bracket, or cables to make some money?

Surely there must must be some sort of rebate, bogus head office charge or something in behind it???

[ratkin]

"Reports of my death have been greatly exagerated " said Mark Twain and perhaps something similar applies to the Warehouse etc.
People love to shop and doing it on line is nothing like the real thing. The malls seem to be always full of shoppers and the Warehouse queues do not seem to be getting any shorter.
I could be biased, I hate shopping.

westerly

Biggest queue in the Warehouse is normally at customer services. People returning their stolen goods for cash. Buy One steal One promotion, and return the stolen One with the original receipt. Everyone gets a bargain. Except the shareholders.

[percy]

When shopping for a new TV lately, at both Noel Slemmings and Havey Snormans, both were showing me how much money they made on the sale. Noel were trying to tell me they made 0.25% on the sale - so once they took out the credit card fees, they wee selling at a loss.....

Surely they can't be banking on just the extended warranty (which they didn't push hard at all) or the overpriced bracket, or cables to make some money?

Surely there must must be some sort of rebate, bogus head office charge or something in behind it???

Prices,margin on sale,etc are all very much like what Rugby props say and do in a scrum,a very grey area.
Most probably one price book for the salesman,and another for the manager.!!
A cost plus 5% shareholder sale is most probably the "standard" wholesale price plus 5%.
What is not disclosed is their discount off wholesale.Could be anywhere between 5% for a small retailer to 20% for a chain,or 25% plus for a large buying group,such as the one JB Hi Fi and SCY belong to.
Rebates are usually worked out on the retailer reaching a target number of say fridges sold for the year.So even an extra 5% of $2mil of sales [$100,000] means the retailer will often sell fridges cheaply near the end of the year to obtain the rebate.

[Jay]

Yes percy, their cost plus x% sale is off the usual/standard wholesale price (they sate this on the flyers I have seen), not the price at which they buy the item. I have looked at few of these when a flyer came around at work. The prices were not that much lower than their normal price and higher than their price when on sale. Just a ploy IMHO to make it sound good to the average punter.

[tga_trader]

Well there is a blue shed running within the red shed here in Tauranga now (been a few weeks). I'm not sure if any others around the country have been done yet but it would be interesting to see how it's going.

[winner69]

JB HIFI Accounts show they have a 18% Gross Margin implying a 22% markup

Whether this includes rebates/marketing allowances I have no idea

[percy]

JB HIFI Accounts show they have a 18% Gross Margin implying a 22% markup

Whether this includes rebates/marketing allowances I have no idea

Rent 8% of revenue.Wages 8% of revenue.Other overheads 1%.Profit 1% of revenue.?
So profit/loss would be greatly influenced by the stock take.?
A few bad buys,and a bit of old stock, and your profit would evaporate.
SCY's latest result just shows what can go wrong in retail.

So back to Red/Blue sheds.From what I can understand,Blue sheds attract a good number of business people, buying stationery for their businesses.I do not see them wanting to line up in a Red shed que.

[BlackPeter]

So back to Red/Blue sheds.From what I can understand,Blue sheds attract a good number of business people, buying stationery for their businesses.I do not see them wanting to line up in a Red shed que.

You might be right .... its just that I can't remember ever having seen queues in a blue shed. Lots of space, normally more staff than customers in the shed and yes, few customers around (I remember several times when I was the only one ...). And yes, while I am not a regular customer, I try from time to time (normally to find out that I get better product somewhere else). Always wondering how the blue sheds make money (if they do ;));

[winner69]

Rent 8% of revenue.Wages 8% of revenue.Other overheads 1%.Profit 1% of revenue.?
So profit/loss would be greatly influenced by the stock take.?
A few bad buys,and a bit of old stock, and your profit would evaporate.
SCY's latest result just shows what can go wrong in retail.

So back to Red/Blue sheds.From what I can understand,Blue sheds attract a good number of business people, buying stationery for their businesses.I do not see them wanting to line up in a Red shed que.

Noel Leeming ratios much the same .....razor thin margins and not margin for error eh

[Balance]

https://www.nzx.com/announcements/317411

Chief Operating Officer, Chief People Officer, Chief Digital Officer etc - fancy titles indeed.

Why is there no 'Chief Profit Growth Officer'? The company needs this executive than all the others combined!

[carrom74]

https://www.nzx.com/announcements/317411

Chief Operating Officer, Chief People Officer, Chief Digital Officer etc - fancy titles indeed.

Why is there no 'Chief Profit Growth Officer'? The company needs this executive than all the others combined!

May I add "Chief get rid of them all officer" Balance?

[winner69]

Nothing new but all this restructuring in the paper. Good to see McKinsey involved

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12044037

Those top managers that survive the carry ons will definitely deserve their huge bonuses

[kiwitrev]

Nothing new but all this restructuring in the paper. Good to see McKinsey involved

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12044037

Those top managers that survive the carry ons will definitely deserve their huge bonuses

James Pascoe ups stake from 18.6% to 19.6%, very close to threshhold

[winner69]

James Pascoe ups stake from 18.6% to 19.6%, very close to threshhold

Wonder what their plans are ...... besides an averaging down strategy

[winner69]

Q3 sales

Quite a few minuses (ie sales going backwards) but all so encouraging and positive. Nick says the strategy is working. That’s good

All on track to get those big bonuses

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/317835/279025.pdf

[peat]

Q3 sales

Quite a few minuses (ie sales going backwards) but all so encouraging and positive.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/317835/279025.pdf

Well overall its up 2.6% even if the two Warehouse sectors Red and Blue Sheds sales are down 2.4%, though same store sales were down only about 1%.
Also they must be selling more smaller items as unit sales increased.

Noel Leeming and Torpedo would appear to be saving the day.

Pascoe are increasing their stake which is probably the share price saviour.

Slow turnaround maybe.......

[Ggcc]

http://www.stuff.co.nz/business/105127277/the-warehouse-plans-job-cuts-at-93-stores

Wow just wow. I am glad I am not a shareholder

[winner69]

http://www.stuff.co.nz/business/105127277/the-warehouse-plans-job-cuts-at-93-stores

Wow just wow. I am glad I am not a shareholder

Has to be done to ensure the top management huge bonuses are safe. Weren’t they over 10 million for the top dogs.

Sometimes union guys are quite perspective ......"...... Other retail companies are thriving. It suggests to us that the new company bosses just don't know how to do business in New Zealand. "

[percy]

Has to be done to ensure the top management huge bonuses are safe. Weren’t they over 10 million for the top dogs.

Sometimes union guys are quite perspective ......"...... Other retail companies are thriving. It suggests to us that the new company bosses just don't know how to do business in New Zealand. "
Thriving.?
The odd one.
Unions should check with Mall landlords and find out how many retailers are behind in their rent.
Perhaps a few union people should try owning their own retail business,before they comment?
More competition,higher overheads including wages,and compiance,means more marginal retail businesses will fail.
SCY and WHS are clearly showing distress signals.
Many small retailers hang on because they would not be able to find a job, should they close their store,while their hourly rate would be well below minimum.
Walk down any strip shopping area,and figure it out for yourself.
Rural townships are even more distressed.
Fairlie,Geraldine,Timaru,Temuka,Waimate,Blenheim,W estport and Greymouth come straight to mind.

[winner69]

The perceptive part was that Warehouse top management don’t have any idea who things work in NZ ...unlike HLG, BgR etc

Opportunity / charity shops apparently doing well though...the clothing retailer in Hawera had to close because he couldn’t compete with the three op shops in town.

[percy]

Stephen Tindal came from a retail family.
Tim Glasson came from a retail family.
Have any SCY or WHS managers or directors owned their own store.?
Have any of the Labour members of parliament or unions ever owned their own retail business.?
What is known as the blind leading the blind.
Most of WHS management are from the UK.
Know what I mean like.?

[winner69]

Stephen Tindal came from a retail family.
Tim Glasson came from a retail family.
Have any SCY or WHS managers or directors owned their own store.?
Have any of the Labour members of parliament or unions ever owned their own retail business.?
What is known as the blind leading the blind.
Most of WHS management are from the UK.
Know what I mean like.?

That’s what the union guy was saying

[percy]

That’s what the union guy was saying

So he has owned his own retail store.?

[Ggcc]

So he has owned his own retail store.?
It is difficult in the retail industry, but some of these guys made the warehouse so successful. Maybe thay could take on fewer casual staff instead of culling the long term ones?

[winner69]

So he has owned his own retail store.?

He’s a she .....and apparently once worked for her husband in his store.

Bit of a radical though.....whatever a radical is

Main grudge is these UK/USA execs on million plus salaries not really understanding the Kiwi way

And it seems Tindal is condoning this approach.

[Gill]

I do believe it is the top Management who are taking the business into a wrong direction. Their strategies aren't good enough to compete with other businesses. Warehouse acquired shotgun supplements website few years ago which was a thriving business. But they managed to take it to the bottom and now it has been bought by their competitor which is a very small family owned business.

[winner69]

When I read good things about how Nick is turning around Warehouse Group in the changing world I just remind myself to look at Sears share price.

Nick was part of the turnaround team at Sears before being ‘head hunted’ down under

Nick does great presentations though .....knows how to do those very well

[Beagle]

Has to be done to ensure the top management huge bonuses are safe. Weren’t they over 10 million for the top dogs.

Sometimes union guys are quite perspective ......"...... Other retail companies are thriving. It suggests to us that the new company bosses just don't know how to do business in New Zealand. "


Top tier management in line for massive bonus's, over $10m if my memory serves me correctly and that was just to keep the ship afloat at the same level and try and stop the rot. I was appalled at the extent or the original bonus scheme and really I am not sure what's more sick, the level of the bonus's or the way they're going about trying to achieve them, probably both equally bad !

[winner69]

Getting rid of hundreds of staff should help the share price

Shareholders (and potential ones) like that

[percy]

Getting rid of hundreds of staff should help the share price

Shareholders (and potential ones) like that

Viscous circle if it is front line staff.
Any further deterioration, of already poor service, will result in greater customer losses,which will lead to more job losses,which will lead etc etc..

[couta1]

Viscous circle if it is front line staff.
Any further deterioration, of already poor service, will result in greater customer losses,which will lead to more job losses,which will lead etc etc.. The Warehouse Troughers won't be affected, their snouts will be well covered, Lol.

[winner69]

It is amazing that few retailers ever seem to struggle because of excessive leverage, misconceived strategies, or inability to meet the needs of their customers.

They struggle because of unseasonable weather, or some unexpected adverse effect, or greedy landlords and a raft of other reasons.

Yes Nick and your excessively paid cronies ....your strategy is crap and your execution even worse.

Plan another 200/300 reduction in headcount or else the shareprice will collapse through the 2 buck mark and your bonuses will dissipate with it ....no worries your people are only a commodity aren’t they

[Filthy]

https://www.stuff.co.nz/business/105503182/kmart-takes-the-fight-to-the-warehouse-in-the-regions

K-mart looks like it is ramping things up & looking to take more market share.

Good little quiz in the middle of the article too (trying to guess the K-mart product vs the Up-market product .....for those interested, I scored 6/10!)

[winner69]

I got the neon flamingo one wrong

[tim23]

I finally sold out of WHS a few months back (at a loss) despite spending lots on refurbishing stores they still looked the same to me and the headers on the aisles are confusing. I also don't think they make enough noise about being one of the best payers of staff in the retail sector.

[BlackPeter]

I finally sold out of WHS a few months back (at a loss) despite spending lots on refurbishing stores they still looked the same to me and the headers on the aisles are confusing. I also don't think they make enough noise about being one of the best payers of staff in the retail sector.

I don't think the fact that they are overpaying mediocre staff is an argument to buy there. If their staff would be deserving of their higher salaries than the shopping experience should sell itself ...

Just imagine - highly motivated, competent, caring and customer focused salespeople in the warehouse - wouldn't it be wunderbar?

Overpaying mediocre staff is the dumbest HR mistake anybody can make ... its not even a fun way to bring a company to its knees.

[tim23]

I don't think the fact that they are overpaying mediocre staff is an argument to buy there. If their staff would be deserving of their higher salaries than the shopping experience should sell itself ...

Just imagine - highly motivated, competent, caring and customer focused salespeople in the warehouse - wouldn't it be wunderbar?

Overpaying mediocre staff is the dumbest HR mistake anybody can make ... its not even a fun way to bring a company to its knees.
Fair comment - but shoppers may feel more inclined to shop there if they are paying more than say Mitre 10 or Briscoes?

[Nasi Goreng]

In my experience, the service levels at the warehouse have improved somewhat in the last few years. I see people around the store who are often happy to walk me to a product if I ask them for help locating something. Now my experience in Bunnings, Mitre 10, Rebel and Briscoes is very different. There I find it hard to find someone working, and if I do ask for help, they will point me in the direction of where it might be and get on with what they are doing.

I've been involved with upskilling the retail sector, improving service levels and customer experience. There is a real gap and opportunity for any who get this right... I tip my hat to the warehouse for at least trying and while they have a long way to go, there has been a notable shift since they introduced this a few years back. It may be different around the country but I feel I've been to enough of those stores to feel like I can comment here.

[percy]

At WHS Barrington there is no service.None,Zero.
Mitre 10 Beckenham, and Bunnings Tower Junction, the service is excellent.
Briscoes Salisbury street ,and Riccarton the service is OK.
Rebel Sports I can not comment, as I do not shop there.

[ratkin]

At WHS Barrington there is no service.None,Zero.
Mitre 10 Beckenham, and Bunnings Tower Junction, the service is excellent.
Briscoes Salisbury street ,and Riccarton the service is OK.
Rebel Sports I can not comment, as I do not shop there.

Am I the only one who likes no service. Hate shops where staff are pestering you. Smith city always very bad, they all hunting for customer commission.
Love rebel sport because no service at all. Can sit there and try on Twenty pairs of running shoes with no interruption. If there is service in the warehouse it is likely because there are not enough customers, and staff are all bored.

[winner69]

Warehouse Group sales on fire ...booming ...and profits 10% better than though (guidance)

Looks like the big bonuses to the senior management will be paid ......even though profits down 15% on last year. Probably would have gone broke if not incentivised those guys so all honky dory

Paid far too much for Torpedo 7 a few years ago...now writing off the $25m goodwill

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MVN/323116/285829.pdf

[RTM]

Warehouse Group sales on fire ...booming ...and profits 10% better than though (guidance)

Looks like the big bonuses to the senior management will be paid ......even though profits down 15% on last year. Probably would have gone broke if not incentivised those guys so all honky dory

Paid far too much for Torpedo 7 a few years ago...now writing off the $25m goodwill

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MVN/323116/285829.pdf

Hope the folk shopping there are leaving enough in the bank for their vehicle replacement at Turner’s!

[Gisborne Grumbler]

Although it's "adjusted profit" which can of course cover all manner of sins. They "adjusted" $2.3m out of 1H, and will also adjust for goodwill write down of $25.6m, so a total of $27.9m to be 'adjusted'. Reported NPAT would be c. $30.85m vs FY17 $70.7m, just a trifling 56% below last year. Smoke and mirrors. It's caused by a goodwill right down of T7 - "an investment in a store expansion programme, no longer support the goodwill valuation associated with the original acquisition". Which must mean that the stores aren't generating expected sufficient future cashflow to cover the goodwill and yet the strategy remains to expand the physical retail presence?? Makes perfect (non)sense and is definitely worth paying the full bonus for. Of course.

https://www.nzx.com/announcements/323104

Per the 2017 Annual Report:
"The recoverable amount of the Torpedo7 CGU exceeded its carrying amountby $5.683 million. The cash flow projections in the Torpedo7 model assumes an average annual growth rate in sales of 7.6% and an increase in grossmargins from 24% to 28% over the 5 year projection period."

19 stores in the network + online were expected to generate $31.3m cash flow over 5 years, one year later zero? In which case either the cost of the move to Auckland from Hamilton sucks up all cash flow generated by the stores, or the stores are unprofitable in which case where is the asset write down for the stores also?

Smoke and mirrors.

[bull....]

Although it's "adjusted profit" which can of course cover all manner of sins. They "adjusted" $2.3m out of 1H, and will also adjust for goodwill write down of $25.6m, so a total of $27.9m to be 'adjusted'. Reported NPAT would be c. $30.85m vs FY17 $70.7m, just a trifling 56% below last year. Smoke and mirrors. It's caused by a goodwill right down of T7 - "an investment in a store expansion programme, no longer support the goodwill valuation associated with the original acquisition". Which must mean that the stores aren't generating expected sufficient future cashflow to cover the goodwill and yet the strategy remains to expand the physical retail presence?? Makes perfect (non)sense and is definitely worth paying the full bonus for. Of course.

https://www.nzx.com/announcements/323104

Per the 2017 Annual Report:
"The recoverable amount of the Torpedo7 CGU exceeded its carrying amountby $5.683 million. The cash flow projections in the Torpedo7 model assumes an average annual growth rate in sales of 7.6% and an increase in grossmargins from 24% to 28% over the 5 year projection period."

19 stores in the network + online were expected to generate $31.3m cash flow over 5 years, one year later zero? In which case either the cost of the move to Auckland from Hamilton sucks up all cash flow generated by the stores, or the stores are unprofitable in which case where is the asset write down for the stores also?

Smoke and mirrors.

makes perfect sense to me , and a sensible move at that.

By bringing the new categories into the wider group will allow the existing useless categories to be removed , the new categories will take up the space created so keeping the existing stores space full.

im thinking eventually a warehouse that contains red shed , stationary , t7 and no1 fitness all under the same roof , eliminate poor performing stores as leases expire and reduce staff costs not only from underperforming stores but from bringing all brands under the one roof.

ive brought online from n01 fitness in the past , it was a bit of a risk as most people who buy fitness equipment like to try before buy so having a bigger presence in store will improve sales alot i believe.

[steveb]

There is one small problem with bringing all the different stores under one roof is the similarity in some of the products WHS sell stationary likewise clothes and electrical goods (if you bring Noel Leeming in to the mix).I was in Farmers last weekend which had a Stevens store inside,I found what I was looking for in Stevens,but then found a similar item in the Farmers side,duplicating product in the same store never works.

[bull....]

There is one small problem with bringing all the different stores under one roof is the similarity in some of the products WHS sell stationary likewise clothes and electrical goods (if you bring Noel Leeming in to the mix).I was in Farmers last weekend which had a Stevens store inside,I found what I was looking for in Stevens,but then found a similar item in the Farmers side,duplicating product in the same store never works.

noel leeming always a stand a lone business , just the other bits an pieces

[MauroNZ]

Out of curiosity, just checked out a 31" monitor (same brand and model) in Noel Leeming is about $150 more expensive than JB-HiFi, I don't know how if people shop around but just comparing two shops there is such a difference.

[Patient Panda]

Out of curiosity, just checked out a 31" monitor (same brand and model) in Noel Leeming is about $150 more expensive than JB-HiFi, I don't know how if people shop around but just comparing two shops there is such a difference.


For comparing monitors or almost any tech or electrical gear www.pricespy.co.nz is the best thing around.

has easily saved me a couple of k since I started using it 5 or 6 years ago

[oldtech]

Out of curiosity, just checked out a 31" monitor (same brand and model) in Noel Leeming is about $150 more expensive than JB-HiFi, I don't know how if people shop around but just comparing two shops there is such a difference.

If there is one near you, I find PBTech is generally good value.

[MauroNZ]

For comparing monitors or almost any tech or electrical gear www.pricespy.co.nz (http://www.pricespy.co.nz) is the best thing around.

has easily saved me a couple of k since I started using it 5 or 6 years ago


Thanks you, I wasn't aware of that one.

[MauroNZ]

If there is one near you, I find PBTech is generally good value.

True, being curious I've started with the mentioned ones just as a comparison point.

[kiwico]

True, being curious I've started with the mentioned ones just as a comparison point.

Another is www.priceme.co.nz.

[winner69]

Annual result ..BEAT GUIDANCE ....that’s a good start

 Adjusted Net Profit After Tax of $59.0m, above market guidance

Top of guidance range was $53m ......must have done very well the last few months ...without saying anything to the market

[Sideshow Bob]

Annual result ..BEAT GUIDANCE ....that’s a good start

 Adjusted Net Profit After Tax of $59.0m, above market guidance

You set a low bar for yourself, then make yourself look good later.

Again, why buy WHS when can buy best in class like Briscoe's. They make about the same profit, on only 20% of the turnover.....

[winner69]

They say — Group Short Term Incentive (STI) has been triggered. If the result is normalised for the impact of the STI, Adjusted NPAT would have increased1.6% year on year

This implies that STI was about $15m odd ...good place to be a boss I reckon ...make heaps less and get rewarded

[Sideshow Bob]

No surprise Torpedo 7 didn't make any money. Customer service is shi.......

Contacted them recently, got a prompt response. Emailed back the information they requested immediately - no reply to this or the follow up 3 emails. Finally contacted them through different means and got the answer but no reason for the lack of response.

Had problems previously.

A friend ordered a bike for her daughters birthday, which was in stock. Took well over a week to get delivered and assembled and got close to the birthday before got the bike. Store Manager told her that birthdays are the same date every year, so order earlier next time.

[winner69]

You set a low bar for yourself, then make yourself look good later.

Again, why buy WHS when can buy best in class like Briscoe's. They make about the same profit, on only 20% of the turnover.....

Without all the dramas .......and Briscoes grow profits while WHS seem to report declining profits

[winner69]

H2 normalised earnings down 8% on last year .....but we are getting there

And in spite of no increase in sales and higher margins they have $36m more stock/inventory than a year ago ...wow

[winner69]

Capex in F18 was $70m odd and forecast to spend $100m in F19 ...that’s a heck of a lot of money judtbtonstay in the game

And there’s a little note about spending $30m on non-recurring transformational costs in F19

Surely do deserve those bonuses

[percy]

H2 normalised earnings down 8% on last year .....but we are getting there

And in spite of no increase in sales and higher margins they have $36m more stock/inventory than a year ago ...wow

Excess stock clogs logistics systems,ties up more cash,ties up storage,ties up staff time.
A major warning signal in retail.

[winner69]

Excess stock clogs logistics systems,ties up more cash,ties up storage,ties up staff time.
A major warning signal in retail.

Exactly percy ...a real bad sign

[winner69]

Excess stock clogs logistics systems,ties up more cash,ties up storage,ties up staff time.
A major warning signal in retail.

Especially when you have enough stock to cover the next three months sales (in theory)

[winner69]

Jeez ..la close sub 2 bucks

Not since last century has that happened

Share price performance reflects company performance

Warehouse going for broke now ....spending zillions on restructuring / reinvigorating the business

I fear it is a case of good luck and hope it happens

Looks like sharetraders have deserted the ship already ...can’t blame them

[Beagle]

https://www.marketscreener.com/WAREHOUSE-GROUP-LTD-6491364/financials/
For mine analysts are too optimistic about earnings next year at 20 cps.

[winner69]

https://www.marketscreener.com/WAREHOUSE-GROUP-LTD-6491364/financials/
For mine analysts are too optimistic about earnings next year at 20 cps.

EPS this year was 17 cents and they did say “we expect a modest increase in profitability.” So maybe 20 cents is more than modest increase

[Beagle]

EPS this year was 17 cents and they did say “we expect a modest increase in profitability.” So maybe 20 cents is more than modest increase

Might be a very modest increase if any after management finish scoffing at the tough of excessive corporate bonus largess :t_down:
Either way, I agree it doesn't look good trading a new multi year low and unable to hold the long term support line at $2.00.
Next stop $1.70 ?

[carrom74]

I am guessing it is just a matter of time for the Normans to take complete control of this company. I will be keenly watching.

[percy]

I am guessing it is just a matter of time for the Normans to take complete control of this company. I will be keenly watching.

Yes I think you are right.
I think they will be like you.keenly watching.

[winner69]

I am guessing it is just a matter of time for the Normans to take complete control of this company. I will be keenly watching.

Enterprise value nearly $900m so they would to front up with more than $800m

And orobably not too keen taking on $700m of lease obligations

[Sideshow Bob]

Enterprise value nearly $900m so they would to front up with more than $800m

And orobably not too keen taking on $700m of lease obligations

Dont Foodies and Progressive own blocking stakes?

[stoploss]

Dont Foodies and Progressive own blocking stakes?

One of them bailed out ..not sure about the other.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11411069

[winner69]

Nick Grayston, current CEO helped the Sears turnaround before he joined Warehouse Group

Wonder if Warehouse will meet the same fate

https://www.stuff.co.nz/business/world/107865059/sears-files-for-bankruptcy--swan-song-for-a-us-icon

[winner69]

Why Warehouse Group will struggle for many years is summed up thus — “Technology changes exponentially; organizations change logarithmically.”

[peat]

Why Warehouse Group will struggle for many years is summed up thus — “Technology changes exponentially; organizations change logarithmically.”

exponentially and logarithmically are synonyms.
is there a mistake , or can you explain more clearly what you mean please.

The Warehouse was busy today at the mall
The chart looks pretty bad but 12 mths support at 2.00 level is holding, so far.
There is someone interested so maybe it will be hold despite the descending triangle.

[BlackPeter]

exponentially and logarithmically are synonyms.


You probably missed that one revealing calculus class ;)?

Exponential functions are the class of fucctions which grows with the fastest pace towards infinity,

Logarithmic functions are the class of functions which grows with the slowest pace towards infinity.

Exponential and logarithmic are not synonymous, they are inverse.

[winner69]

You probably missed that one revealing calculus class ;)?

Exponential functions are the class of fucctions which grows with the fastest pace towards infinity,

Logarithmic functions are the class of functions which grows with the slowest pace towards infinity.

Exponential and logarithmic are not synonymous, they are inverse.

Thanks BP

What I was trying to say was technology and the way business is done is changing very rapidly, and those changes are accelerating.......but cHanging how an organisation thinks and behave is still hard and slow.

[peat]

thanks BP, appreciate the clarity
an online dictionary did have them as synonyms when I checked before posting.

[BlackPeter]

Market seems to like the new design and colour of the annual report (green instead of red ;)) or can anybody think about some other reason for the Golden Cross which happened some 10 days ago? But maybe its just the spirit of the season?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/324220/287224.pdf

Maybe they change next year to green sheds?

Anyway - good to read that all of the board members and many of their families do much of their shopping in one of the warehouse chains - good way to dispose of the bonus payments.

[winner69]

Market seems to like the new design and colour of the annual report (green instead of red ;)) or can anybody think about some other reason for the Golden Cross which happened some 10 days ago? But maybe its just the spirit of the season?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/324220/287224.pdf

Maybe they change next year to green sheds?

Anyway - good to read that all of the board members and many of their families do much of their shopping in one of the warehouse chains - good way to dispose of the bonus payments.

The purple pen underlying and circling key points is pretty cool ....a bit of human touch

[Beagle]

The purple pen underlying and circling key points is pretty cool ....a bit of human touch

A lot cooler than the hotch potch look of attire the directors are wearing, some of whom look like they are ready to be put out to pasture...

[BlackPeter]

A lot cooler than the hotch potch look of attire the directors are wearing, some of whom look like they are ready to be put out to pasture...

They just try to blend into their natural customer base :p - and given that they all source stuff from the warehouse - maybe that's the best they could find?

[Beagle]

They just try to blend into their natural customer base :p - and given that they all source stuff from the warehouse - maybe that's the best they could find?

:lol: quite right mate but you'd think the CEO could wear a suit that fits properly on his salary lol

[winner69]

:lol: quite right mate but you'd think the CEO could wear a suit that fits properly on his salary lol

Got it on special at Sears before he came to NZ ......put a bit beef on since coming to NZ

[peat]

:lol: quite right mate but you'd think the CEO could wear a suit that fits properly on his salary lol

a nice Apple Watch on his wrist but he's clearly not engaging enough with the Activity or the Workout apps considering the size of the troughs this year.

[winner69]

Sales ahead of last year ...that’s good

https://www.nzx.com/announcements/326581

[BlackPeter]

Sales ahead of last year ...that’s good

https://www.nzx.com/announcements/326581

Hmm yes, though the percentages are not really exciting, aren't they? Particularly given that they started with a quite low bar.


Group Sales in Q1 of $668.3 million (up 3.6% compared to Q1 FY18) 1,2
The Warehouse (Red Sheds) Same Store Sales up 2.7% 1
Warehouse Stationery (Blue Sheds) Same Store Sales up 4.1% 1
Noel Leeming Same Store Sales up 3.2% 1
Torpedo7 Group Same Store Sales down 2.7% 1


And didn't they mention in their annual report that the "eveyday low price policy" did cut into their margins? So wondering, what these low revenue increases (together with margin drops) make to the bottom line?

Particularly disappointing is obviously Torpedo 7 - replaced the Warehouse stationary as the least productive chain ... just wondering how they managed to do so much worse than e.g. Kathmandu? Ah yes - and looking into the meagre rise of the online sales - how many centuries will they need to grow with this pace to catch amazon?

But anyway - you are right - could have been so much worse.

[Beagle]

Got it on special at Sears before he came to NZ ......put a bit beef on since coming to NZ

Should have gone to spec savers before the photo shoot lol

[percy]

I think if I were a shareholder I would be reasonably pleased with the result.

[BlackPeter]

I think if I were a shareholder I would be reasonably pleased with the result.

I wouldn't know. They reported on the top line, but it is the bottom line which counts.

[BlackPeter]

I think if I were a shareholder I would be reasonably pleased with the result.

Well, It certainly looks like the market is pleased. SP hovering well above MA50 and MA200, golden cross passed some weeks ago, higher highs and all these things. Who would have thought that the Warehouse can be a safe haven in these troubling times :);

[winner69]

Well, It certainly looks like the market is pleased. SP hovering well above MA50 and MA200, golden cross passed some weeks ago, higher highs and all these things. Who would have thought that the Warehouse can be a safe haven in these troubling times :);

In the US Golden Crosses are good short term but often Death Crosses have better returns than Golden Crosses

————————————————————————————————-

Interesting ...Death Crosses are good -

On average, for the time horizons tested, golden crosses show positive returns over the short term for most sectors. When comparing golden cross and death cross returns over the two different time horizons we see some interesting results. Our expectation of golden cross positive performance holds mostly true for our longer time horizon back to 1998. However, counterintuitively, it appears that death crosses also have positive returns and even outperform golden crosses in our current bull market. Rather than giving a signal to sell or short a stock, the death cross has been an indication to buy at a low price (and be rewarded with a stock price turnaround).

https://insight.factset.com/are-gold..._hsmi=64046482

[BlackPeter]

In the US Golden Crosses are good short term but often Death Crosses have better returns than Golden Crosses

————————————————————————————————-

Interesting ...Death Crosses are good -

On average, for the time horizons tested, golden crosses show positive returns over the short term for most sectors. When comparing golden cross and death cross returns over the two different time horizons we see some interesting results. Our expectation of golden cross positive performance holds mostly true for our longer time horizon back to 1998. However, counterintuitively, it appears that death crosses also have positive returns and even outperform golden crosses in our current bull market. Rather than giving a signal to sell or short a stock, the death cross has been an indication to buy at a low price (and be rewarded with a stock price turnaround).

https://insight.factset.com/are-gold..._hsmi=64046482

Makes a lot of sense for non-fatal cases in a bull market. Only question is - are we still in a bull market? I would very much question the validity of above thesis during a bear ...

On the other hand - I agree that it might not be a good idea to buy The Warehouse in the current phase ... it sort of feels that at least midterm the down risks might weigh heavier than the up-opportunities.

[100101]

Is it today they go EX. If the price stays about the same it would be very good

[winner69]

AGM preso pretty optimistic

Jeez Nick is looking more dignified (maybe sterner) these days

https://quoteapi.com/resources/da9866271f9d0071/announcements/whs.nzx/327302/WHS_Chair_and_Group_CEOs_Presentation_2018_Annual_ Meeting.pdf?bearer=eyJhbGciOiJIUzI1NiIsInR5cCI6Ikp XVCJ9.eyJzY29wZSI6WyJndWVzdHMiLCJ1c2VycyJdLCJuYmYi OjE1NDI5MjIxNjIsInN1YiI6Nzg5Njk1LCJpc3MiOiJzdG9ja2 5lc3MiLCJub25jZSI6IjZjYzkyNDZlMWNjYzBmYjgiLCJpYXQi OjE1NDI5MjIxNjIsImV4cCI6MTU0MjkyMzA2Mn0.plFD3hvij-DAs4r9v6WFY7R0t3PmNSa_T8m1p6dhJOs

[waikare]

Is it today they go EX. If the price stays about the same it would be very good

Ex dividend yesterday 22nd, pay out on the 6th Dec. Sitting at $2.12 3.00pm.

[kiora]

Black Friday sales today should be a ripper.

[winner69]

Looks like that sudden spurt of enthusiasm for WHS has died

One thing $2.00 has been very strong support for some time now

Didn’t suck me .....thought it was too true and reality has hit home

[BlackPeter]

Looks like that sudden spurt of enthusiasm for WHS has died

One thing $2.00 has been very strong support for some time now

Didn’t suck me .....thought it was too true and reality has hit home

Higher highs and lower lows ... whats the textbook saying here?

Maybe this is what they mean with increased volatility.

Maybe a great time for traders (if they manage to correctly predict the lows and highs), but for investors there are at current clearly better stocks around ... not many, though ;);

Sort of wondering whether I should push them off my lowest ranked watchlist ... but who knows - maybe one day spring will arrive for this dog as well?

[winner69]

The $200k should come out of the Noel Leemings boss and Nicks pockets ....out of the huge bonus they were given to ensure the right behaviours are pushed through the business

Based on my experience 5his week I’d say these practices are still endemic in Leemings

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12176773

[Beagle]

The $200k should come out of the Noel Leemings boss and Nicks pockets ....out of the huge bonus they were given to ensure the right behaviours are pushed through the business

Based on my experience 5his week I’d say these practices are still endemic in Leemings

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12176773

Shonky trading practice...who would have thought...When you consider how many stores there are and over the period this offending occurred this looks like the proverbial slap over the wrist with a wet bus ticket !

[winner69]

I’ve noticed that at Noel Leeming the prices of many TVs have gone up 25% or so to recent pricing. Must be getting ready for Boxing Day sales eh

Shareholders will be pleased

[winner69]

Apparently this works ...brain works in funny ways

Sent the paper to Nick to look at

[ratkin]

I went into Noel Leemings in August to buy a replacement cable for some Bosc headphones. Was not in stock and assistant asked if I wanted to order them in. Like an idiot I said yes, paid the money and left the shop.

It is now December and still do not have them. Been told lie after lie about their non arrival. I could and should have just ordered them from Amazon and would have had the replacement cable months ago. Will never, ever shop in Noel Leemings again.

My inquiries were all met with rudeness, and reluctantly they offered to refund the 35 dollars back into my account, no apology no compensation, no nothing. Even the refund has failed to materialise.

[Filthy]

https://www.stuff.co.nz/business/109496236/ikea-announces-plans-to-open-in-new-zealand

[winner69]

Warehouse Group going carbon neutral

https://www.stuff.co.nz/business/industries/110622692/the-warehouse-were-no-longer-contributing-to-climate-change

[winner69]

Most thngs heading in the right direction with Warehouse Group

Nick just can’t stop using buzz words can he.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/WHS/332105/296948.pdf

[Beagle]

Looks okay. I continue to prefer HLG.

[kiwico]

A change coming for those with Warehouse Money cards. It goes from being a free credit card with a 5% discount at The Warehouse to have a annual charge of $55 plus a very high interest charge. Not a high annual charge for a credit card but no point retaining unless you spend at least $1,100 per annum and pay off your bill each month (no discount with any other part of The warehouse Group). Mine goes back next month and will visit The Warehouse even less frequently.

We hope you’re still enjoying your 5% discount every time you shop at The Warehouse.

We're making some important changes to the rates and fees that apply to your Warehouse Money Visa Card but don’t worry you’ll still enjoy 5% discount when you shop at The Warehouse. These changes will be effective from 1 April 2019.

We're introducing some new fees and changing the interest rates that will apply to your Warehouse Money Visa Card. A summary of the new rates and amended fees is set out below and the new Credit Card Rates and Fees Table are available on our website or alternatively you can call us on 0800 801 808 and we can post or email a copy out to you.

Changes to the rates and fees applying to your Warehouse Money Visa Card at a glance.

Amendment
From 1 April 2019
Purchase interest rate: 22.90%
Cash advance interest rate: 25.90%
Annual fee: $55
Paper statement fee: $1 per statement (online statements are free)

[Gill]

That's good news in the end, we use this credit card only because of the extra discount at the Warehouse. $55 annual fee would have seen us discontinue the card but I guess we will be keeping it now that they won't be charging annual fees.

10% extra discount for the comms error, wonder how much it is going to cost WHS







On Friday 22 March, we notified you about the upcoming changes to your Warehouse Money Visa Card. The changes communicated included an increase to the purchase and cash advance interest rate, as well as being charged an annual fee on your account anniversary.Whilst this is true for our other product on offer, this change wasn’t intended for the Warehouse Money Visa Card and was sent to you in error.Please accept our sincere apologies for the confusion and any inconvenience we may have caused. To confirm, below are the interest rate applicable to your account as they have always been.












The Credit Card Rates and Fees Table is also available at warehousemoney.co.nz/cards/card-terms-fees (http://spkdlv.net/ga/click/2-4120814-308-14191-40524-280591-509b00eb3e-b2293cb37f).In addition, we would like to extend our apologies by offering you 10%* off from the 1st April to 10th April 2019 instore and online, when you use your Warehouse Money Visa Card.

[kiwico]

That's good news in the end, we use this credit card only because of the extra discount at the Warehouse. $55 annual fee would have seen us discontinue the card but I guess we will be keeping it now that they won't be charging annual fees.

10% extra discount for the comms error, wonder how much it is going to cost WHS

Same reason why we have it too. I was going to get rid it but I'll be keeping it now.

[winner69]

WHS being talked up (or is ramping) on another forum

Seen as doing well now they doing sensible things and punters like the pretty high yield they see as sustainable

As the old saying going where there’s smoke there’s fire .....WHS the bolter this year

[percy]

Take care.
Net margin [net profit/revenue] is currently 1.9% although it is projected to rise to 2.2%.
This is extremely low.
HLG's is 10% and LOV's is 16%.

[Beagle]

I have tried to like the Warehouse...one of the few places that sells big men's casual clothing are a cheap price but my sense is it is a very mature business and has been subjected to many stuff-up's in strategy over the years. There is no prospect whatsoever of expansion in Australia and the NZ market is saturated to death.
They might be able to eek out some efficiency gains and margin expansion but a growth stock this certainly isn't.
On the other hand for cheaper metrics one can own HLG which is knocking the ball out of the park in terms of online growth and has excellent expansion prospects with its Glassons stores in the very large Australian market. I see no need to hold a diversified spread of retailers just for the sake of diversification when one clearly has both better prospects and metrics than the other.

[percy]

Always keep in mind a weaker NZ $ works against our retailers.

[value_investor]

I just don't see WHS being able to earn back any status they had unless they somehow increase margins in a small market or make risky acquisitions in spaces they aren't comfortable doing. There's also always the threat of a larger player coming here and eating your lunch (Chemist Warehouse the last one to do so) which is easier now with the online shopping model.

Grow that online digital footprint, it really is the way to go. I've started myself realising every year I'm buying more online but keep looking over your shoulder, once that competition comes you're little fish.

[Jay]

They opening another "shed" in Auckland - Lunn Avenue by Stonefields only 3 1/2 walls up so far , but is to be a whole complex with smaller businesses in the surrounds (not a mall type situation, but other shops on the periphery). I have been told they owned the land (have for a long time) and therefore now the building, but do not know if they then will sell and lease back

[JBmurc]

I see a pretty new Warehouse building up for sale down my way with a 9% yield ... looks a great blue chip commercial property with 2030 lease

[Beagle]

I see a pretty new Warehouse building up for sale down my way with a 9% yield ... looks a great blue chip commercial property with 2030 lease

Quite likely to turn into a white elephant in 2030.

[JBmurc]

Quite likely to turn into a white elephant in 2030.

Right as Bulk retail is no longer viable ...? Build costs deflate massively?

Personal I'd think in 21yrs build costs will be 30%-50% higher in NZD (as NZD devalues as it has done from day 1) warehouse might well exit but doesn't mean it won't be a tenanted property

[Beagle]

You might want to check your maths on the length of the lease :)

[JBmurc]

You might want to check your maths on the length of the lease :)

Yes true stupid me 11yrs .. still at the asking price Vs replacement cost 85% IEP + 9% net yield prime position in a high growth region
does look to be a sell down from the Warehouse much like PGG Wrightson was doing last year....(which I purchased one property 10.5% net yield)

maybe they plan to exit the region once the fixed term lease is up ... still as the only Bulk retailer of size in our region, one would think it wouldn't be hard to fill a replacement would be much higher than the current asking price = $1250per sqm of building on freehold section ...

If only I had a spare couple of million :(

[winner69]

The Warehouse in good hands

https://www.stuff.co.nz/business/112930855/behind-the-desk-the-warehouse-chief-executive-officer-nick-grayston

[Ggcc]

I spoke with a friend of mine who works within The Warehouse. She has seen staff morale drop to an all time low over the 10 years she has worked for the company. I went to a Hastings store and staff were openly discussing their dissatisfaction over management ( I did not know those people)..... Not a good look for the company.

The biggest discussion point was the difference between their wages and new recruits who know nothing. I would expect someone who has been loyal to this corporation for over 10 years should receive at least $5 per hour more than a new recruit. Their starting wage (in retail) is high at $19.50 per hour. Soon to be over $20 per hour as minimum wage will be there by 2021.

Most retail positions I know only pay minimum wage or slightly above, so how do we solve dissatisfaction amongst the staff in the red sheds.

Not an investor in this share as retail is a fickle game with overseas online stores taking most of the cream.

[couta1]

The Warehouse in good hands

https://www.stuff.co.nz/business/112930855/behind-the-desk-the-warehouse-chief-executive-officer-nick-grayston Lots of good Troughing hands in this company. Lol

[winner69]

Lots of good Troughing hands in this company. Lol

Even worse ...many are foreigners eh couts

[hogie]

The biggest discussion point was the difference between their wages and new recruits who know nothing. I would expect someone who has been loyal to this corporation for over 10 years should receive at least $5 per hour more than a new recruit. Their starting wage (in retail) is high at $19.50 per hour. Soon to be over $20 per hour as minimum wage will be there by 2021.


We are seeing the same thing with KFC protests ... these larger companies are going to struggle to compete as a consequence of minimum wage increases. Those who have been at the company for a while will want pay rises (regardless of performance) also ... the costs will ultimately need to be passed onto consumers who will probably shop "elsewhere" i.e. online from overseas or other competitors.

[winner69]

Good news for shareholders ....cutting heads and becoming more productive


https://www.stuff.co.nz/business/112967471/job-losses-likely-as-the-warehouse-closes-regional-distribution-centres

At least Nick learnt from all his management studies that staff are just a disposable commodity.

[Ggcc]

Good news for shareholders ....cutting heads and becoming more productive


https://www.stuff.co.nz/business/112967471/job-losses-likely-as-the-warehouse-closes-regional-distribution-centres

At least Nick learnt from all his management studies that staff are just a disposable commodity.

Time to invest....... Not. I wonder if Nick has ever known what it is like to be a staff member in the unknown section? It is horrible for those who have families that cannot plan, because management cannot explain adequately what is going on.

[winner69]

Time to invest....... Not. I wonder if Nick has ever known what it is like to be a staff member in the unknown section? It is horrible for those who have families that cannot plan, because management cannot explain adequately what is going on.

Got to earn those outrageous bonuses somehow .....something(people) has to be sacrificed eh

[bull....]

Time to invest....... Not. I wonder if Nick has ever known what it is like to be a staff member in the unknown section? It is horrible for those who have families that cannot plan, because management cannot explain adequately what is going on.

hasnt done anything for the share price.

i see the benefits in the distribution move , i see no benefit in there roster trial. dont like zero hr contracts or similar at all people need certainty in life as far as work goes.

The retail giant also plans to move part of its call centre services overseas and to trial a controversial new staff rostering system that has many more worried about their jobs.

https://www.stuff.co.nz/business/112967471/job-losses-likely-as-the-warehouse-closes-regional-distribution-centres

[kiora]

hasnt done anything for the share price.

i see the benefits in the distribution move , i see no benefit in there roster trial. dont like zero hr contracts or similar at all people need certainty in life as far as work goes.

The retail giant also plans to move part of its call centre services overseas and to trial a controversial new staff rostering system that has many more worried about their jobs.

https://www.stuff.co.nz/business/112967471/job-losses-likely-as-the-warehouse-closes-regional-distribution-centres

I thought 0 hr contracts where outlawed.They didn't seem to work for NZ post

[winner69]

hasnt done anything for the share price.

i see the benefits in the distribution move , i see no benefit in there roster trial. dont like zero hr contracts or similar at all people need certainty in life as far as work goes.

The retail giant also plans to move part of its call centre services overseas and to trial a controversial new staff rostering system that has many more worried about their jobs.

https://www.stuff.co.nz/business/112967471/job-losses-likely-as-the-warehouse-closes-regional-distribution-centres

Need to do this sort of stuff to just stay in the game

[winner69]

Bastards - “One worker, who had been part of the fulfilment team for four years, found out he could lose his job while at his mother's funeral.”

But shareholders should be pleased with such actions - mightn’t make much more money but keeps the company in the game longer



https://www.stuff.co.nz/business/113047345/the-warehouse-will-close-distribution-centres

[MauroNZ]

Last Sunday I went to K-Mart Porirua, man is incredible the low prices and relative quality of things there. And a lot of people buying something hard to see in WHS.

Disc: unhappy holder.

[bottomfeeder]

I lost money on the Warehouse. I was feeling the tug of sentimentality, as this company is a quintensially a NZ company, but its being squeezed by outside forces and companies which want some of their sales in their pocket. The company is not innovate enough, to make headway. Their only ploy is to borrow and buy out other businesses. I believe the warehouse will continue, however, it will never have growth, or increasing profitability to such an extent that it is considered to be a good investment. At least not in the near future. It is overpriced.

[percy]

Last Sunday I went to K-Mart Porirua, man is incredible the low prices and relative quality of things there. And a lot of people buying something hard to see in WHS.

Disc: unhappy holder.

Well I hope you fared better at their self service check out than I did this morning.
The sow faced overweight help cow put me off ever going back there......K-Mart,The Palms, Shirley.

[MauroNZ]

Well I hope you fared better at their self service check out than I did this morning.
The sow faced overweight help cow put me off ever going back there......K-Mart,The Palms, Shirley.

I think generally speaking the self service counter are annoying, even at New World.

[MauroNZ]

I lost money on the Warehouse. I was feeling the tug of sentimentality, as this company is a quintensially a NZ company, but its being squeezed by outside forces and companies which want some of their sales in their pocket. The company is not innovate enough, to make headway. Their only ploy is to borrow and buy out other businesses. I believe the warehouse will continue, however, it will never have growth, or increasing profitability to such an extent that it is considered to be a good investment. At least not in the near future. It is overpriced.

I've been with paper loss not longer after I bought and never came back. I haven't sold because isn't a lot however I paid $3.74 and I thought if I hold it long enough it might come back. I acknowledge my mistake of buying straight from broker recommendation when I was after a dividend stock having asked about HLG at that time. Anyway is a learning experience and btw I think HLG at that time was around $5.

[percy]

I think generally speaking the self service counter are annoying, even at New World.

I do my best to avoid them.
Luckily The New World at St.Martins, which is our nearest, has a couple of express lanes which seem to work OK.
I like shopping at Moorhouse Ave Pak'nSave, as they always have plenty of full service check outs operating.

[winner69]

Well I hope you fared better at their self service check out than I did this morning.
The sow faced overweight help cow put me off ever going back there......K-Mart,The Palms, Shirley.

They good those machines sometimes ......told me to pay a lot less than I was meant to ...it wasn’t a sow faced over weight help cow who I mentioned it to but she said it was all OK

WHS $40 short ...good discount that day

[bottomfeeder]

There is no upside to WHS trading, maybe the next announcement will be a 2% increase in sales, but generally over the long term it will be flat sales and flat profits, until it selltels down to a SP around $1. Then I would suggest, buy and hold a few for a reasonable return.

Every dog will find its best bed to sleep in, and when that comes the $1-00 will be fair value.

[percy]

Well I hope you fared better at their self service check out than I did this morning.
The sow faced overweight help cow put me off ever going back there......K-Mart,The Palms, Shirley.

THE POWER OF ONE.!
Well I did go back.Had to buy AA batteries ......Bunnings pack of 30.. $14.99 ..KMart pack of 24 ..$5.00.Had the KMart ones three years ago and they lasted a good while,in fact I think longer than Bunnings'.
Nice friendly young assistant at the front entrance,who directed me straight to where the batteries were on display.Then she helped me with the selfservice, when she saw I was having difficulties.
All it takes in retail is one friendly helpful staff member.

[Snoopy]

THE POWER OF ONE.!
Well I did go back.Had to buy AA batteries ......Bunnings pack of 30.. $14.99 ..KMart pack of 24 ..$5.00.Had the KMart ones three years ago and they lasted a good while,in fact I think longer than Bunnings'.
Nice friendly young assistant at the front entrance,who directed me straight to where the batteries were on display.Then she helped me with the selfservice, when she saw I was having difficulties.
All it takes in retail is one friendly helpful staff member.


The only problem is the last time I went to K-mart in Riccarton, there was only one staff member at the checkout complex. If they were already dealing with a Percy, or perhaps not so friendly in the first place you are out of luck. I would say K-mart are one step away from permanently locking the front door and becoming a mail order operation only.

SNOOPY

[Jay]

At K -Mart St Lukes , the last few times I have been there the queue was very long and this was not on a long weekend or any big sale day. Patronage seems to have increased, where as a the local WHS , much less of a queue from observations - steady but no long queue.

Discl: None held

[percy]

The only problem is the last time I went to K-mart in Riccarton, there was only one staff member at the checkout complex. If they were already dealing with a Percy, or perhaps not so friendly in the first place you are out of luck. I would say K-mart are one step away from permanently locking the front door and becoming a mail order operation only.

SNOOPY

Just a few friendly helpful staff make such a difference.
I would have thought it was a "no brainer."