Normans more than double stake in Warehouse

Anne Norman and David Norman. Photo / Sarah Ivey.

James Pascoe, the owner of Farmers and Whitcoulls, has more than doubled its shareholding in The Warehouse Group to 16.4 per cent after snapping up Aussie supermarket operator Woolworths' stake in New Zealand's biggest listed retailer.

Warehouse shares surged 6.6 per cent to $2.90 following the news.

James Pascoe has bought out an 8.8 per cent stake held by Woolworths in an off-market sale for $87.1 million, according to a substantial security holder notice.

In a statement James Pascoe chief financial officer Kevin Turner said The Warehouse was a strong New Zealand brand that "fits within our philosophy of supporting New Zealand retail".

"James Pascoe Limited does not intend to make a takeover bid for The Warehouse," Turner said.

"No further comment will be made."

Woolworths said it had determined that its investment in the Warehouse was no longer required as part of its New Zealand strategy.

In January James Pascoe, which is controlled by David and Anne Norman, upped its Warehouse stake from 6.3 per cent to 7.4 per cent.

At that time market sources speculated that the Normans might be interested in having more influence over the Red Sheds operator, possibly at the board level.

James Pascoe's other retail brands include jewellers such as Pascoes, Stewart Dawson and Goldmark.

The Warehouse released a disappointing trading update on January 7, saying adjusted first-half profit was likely to be about $37 million, which would be a roughly 20 per cent decline on the previous year.

Chief executive Mark Powell said poor seasonal weather conditions had forced the Red Sheds to "sacrifice margin to manage seasonal stock sell through".

The Warehouse will release its first-half result on Friday.