No pressure to leave: Warehouse boss Mark Powell

Mark Powell says if the turnaround strategy hadn't been applied, profits would have been lower. Photo / Dean Purcell

CEO who oversaw huge strategic shift says there was no pressure to leave.

The Warehouse Group boss Mark Powell is to leave after a four-year stint in which he oversaw a major strategic shift, including numerous acquisitions and a nationwide revamp of the retailer's Red Sheds stores.

The Auckland-based company said last night a formal process had begun to recruit a new group chief executive.

"This will allow up to 10 months to ensure a planned and orderly succession process," the firm said.

Powell joined the company in 2002 and was chief executive of its Warehouse Stationery division before being promoted to the top role in 2011.

Since then the Welshman has spearheaded a turnaround push that has included a $100 million refurbishment programme for the Red Sheds and acquisitions, including electronics chain Noel Leeming and an 80 per cent stake in online sportsgear retailer Torpedo7.

But there has been market impatience about a lack of bottom-line results, with prominent fund managers telling the Business Herald in January the strategy had failed and changes were needed at CEO and board level.

The company this month reported a 19 per cent drop in adjusted first-half profit, to $37.2 million. It also cut its forecast annual dividend.

Salt Funds Management managing director Matt Goodson said the news of Powell's impending departure was "not a complete shock".

"The Warehouse has to demonstrate they can get some returns from the heavy in-store capex and acquisitions," Goodson said.

Powell told the Business Herald while "profitable growth" was yet to result from the turnaround strategy, it had been positive for customers and staff.

"If we hadn't done what we did, our profit would be a lot less than it is now," he said. "We're certainly better than we would have been."

The investment into the Red Sheds has resulted in 17 quarters of sales growth, the company said.

Powell said he had not come under any pressure from the board, or investors, to step down and had only ever intended to stay in the role for four to five years.

"Inevitably there'll be some speculation," he said. "I can't stop that."

Powell, a Baptist pastor, said he was not seeking another executive role and was looking to apply his skills in the faith-based, not-for-profit sector and as a professional company director.

"I've been doing a Masters in philosophy and theology and I want to finish it next year before I'm 55."

Warehouse founder Sir Stephen Tindall said Powell had made a tremendous contribution.

"Mark has positioned the business well for a new leader to take the group on the next phase of its strategic journey and drive the results from these investments," Tindall said.

Warehouse shares closed down 2c at $2.85 last night. The announcement was made after market close.