Warehouse moves into world of finance

Mark Powell, chief executive of The Warehouse, didn't handle publicity around sexualised bikini tops for girls very well. Photo/File

The Warehouse said it planned to raise $115 million - mostly through a share placement to institutions - to set up its own financial services operation.

The retail giant said its strategic ambition was to become a leading New Zealand financial services company.

Read this morning's announcement here.

See also - Sales up at The Warehouse, profits dip

Part of the plan will involve The Warehouse buying the business of Diners Club New Zealand for $3 million.

The Warehouse Group, through its retail brands, already offers a range of financial services products through a joint venture and various third party arrangements.

The acquisition of electrical goods retailer Noel Leeming in 2012 and the strategic reshaping of the Warehouse Group changed its potential scale in financial services, the company said.

"With the current volume of receivables generated and the opportunity for further growth, it is now the right time for the Warehouse Group to pursue its own 'captive' financial services business," the company said.

In the first half of 2015 the company will roll out a range of new products from its own financial services business.

The Warehouse Group chief executive Mark Powell said that with the acquisition of Noel Leeming, it became clear that the company had the scale across the Group to offer a significant financial services business.

The capital raising would be by way of a $100 million institutional placement at $3.23 per share, to be conducted March 6, and a $15 million share purchase plan available to New Zealand resident shareholders.

The Warehouse Group Founder Sir Stephen Tindall both he and his Tindall Foundation would participate in the equity raising to maintain their level of ownership.

The Warehouse comprises 92 Warehouse stores, 76 Noel Leeming stores and 63 Warehouse Stationery stores in New Zealand and several online businesses.