The Warehouse Group is selling its outdoor brand Torpedo7 for $1 to a consortium including former Breakers basketball team owners Paul and Liz Blackwell.
The Blackwells, also former owners of Pak’nSave Albany, are shareholder directors of Tahua Partners.
The Warehouse initially paid $33 million over a three year period for a 51 per cent stake in Torpedo 7, before acquiring an additional 29 per cent stake in March 2014 for $15.2m.
All up, it invested $52.2m in the sporting goods firm.
Other Tahua shareholder directors include Rob Redwood, former Glen Innes Pak’nSave owner.
“Tahua Partners Limited will take ownership of Torpedo7′s assets, including stock, cash in store and the Torpedo7 brand, and will assume its obligations, including in respect of leases and honouring gift cards, online orders, and customer returns,” The Warehouse Group said today in an NZX announcement.
“The Warehouse Group expects that the sale will result in a non-cash, pre-tax accounting write-down ranging between $55 million-$65 million in the FY24 half year income statement,” the company said.
“This is subject to audit and final review.”
Warehouse Group chief executive Officer Nick Grayston said he expected the net cash impact of the sale after tax will be close to zero.
“Importantly, the sale of Torpedo7 will allow us to focus on our core brands and improve the group’s financial performance,” Grayston added.
He said Torpedo7 represented only 5 per cent of group sales.
Hamilton-based Torpedo7 was founded in 2004 by Luke Howard-Willis.
In the year to July 2023, Torpedo7 made an operating loss of $22.2m.
Its margins shrank 13.7 per cent and it was the Warehouse Group’s worst-performing brand.
Shares in The Warehouse were down 3c to $1.25 after the announcement.
Industrial projects dominate new supply, the study found, comprising 65% of new stock.