Ex-coalminer to keep Red Sheds in black

Under Mark Powell, Warehouse Stationery's performance has not been hit so badly over the past year. Photo / Supplied

A Warehouse insider who started his working life in underground coal mines has been given the job of digging the company out of a slump.

Mark Powell will take over as chief executive of The Warehouse Group within the next few months, replacing Ian Morrice who is stepping down after six years.

Powell, 49, has held senior roles at the group since 2002, most recently as chief executive of Warehouse Stationery.

He was not available to be interviewed yesterday, but the company highlighted the difficult retail environment he faces and analysts say he will have to re-establish the discount chain's identity.

Its market share has been severely eroded in the past six years and last month it warned half-year profits had been hit by a dent to sales in the run-up to Christmas.

Powell is originally from South Wales and worked as a supervisor in coal mines for six years until changing direction into retailing in the mid-1980s, first working for British food retailer Iceland then in roles at Wal-Mart in Canada and Tesco.

He was appointed Warehouse Stationery chief executive in 2009.

Under Powell, the performance of Warehouse Stationery has not been hit so badly over the past year. Its sales were flat on last year for the two-month trading period to January, with same-store sales up 0.7 per cent against a 2.7 per cent drop in sales at the Red Sheds and same-store sales down 3.8 per cent.

Warehouse Stationery's 2000 workers voted it the best large company to work for in the JRA Award last year.

Warehouse Group chairman Keith Smith said Powell was a seasoned executive with broad international experience.

At Warehouse Stationery he had overseen a "significant financial turnaround and implemented a robust growth strategy".

Morrice announced his intention to resign after last month's profit warning but Smith said he had advised the company last year he intended to quit.

Morrice had been in charge during a period of unprecedented change and difficulty in retailing.

Since he joined the company in 2004, competitive non-food retail footprint in this country had grown by about 40 per cent.

Morrice said he would work with Powell on growth programmes including store refurbishment, category improvement and service improvement.

Customer expectations had changed. "Clearly it has gone through transformation in the last decade and the question is how we've adapted to that."

The company had worked to improve quality.

"Changing people's perceptions of the quality we sell takes longer. At the end of the day we are a no-frills discount store," he said.

Paul Keane of retail consultants RCG said anyone taking over at a major retailer would face a lot of questions.

"That market is becoming increasingly competitive - he's going to have a lot of challenges on his plate," Keane said.

"In terms of The Warehouse they haven't been able to adapt to the change in the market in my view. I think the stores aren't what they used to be - they've lost a lot of their buzz."

Ricky Ward, fund manager at Tyndall Investment Management, said Powell's background showed he had retail blood in his veins but he needed to quickly establish what The Warehouse wanted to be.

He said most analysts were questioning The Warehouse model in difficult economic times.

"Do they keep expanding in different divisions or do they change their business model to what it used to be?"

Morrice, with a salary package last year worth $2.8 million, is one of the country's top paid executives.

He said he had not completed plans after his retirement in November.

"I haven't given it too much thought. I don't have a specific plan for that chapter."

Shares in The Warehouse closed down 2c at $3.63 yesterday.

MARK POWELL
* Incoming chief executive for The Warehouse Group.
* Aged 49.
* Married with two daughters.
* Worked for The Warehouse Group since 2002.
* Has worked in coal mining then retail in Britain, Canada and Spain.
* Has degrees in mining engineering from the University of Wales and theology from Carey Baptist College in Auckland.