The store at the centre of the scrap. Photo/Peter de Graaf
The store at the centre of the scrap. Photo/Peter de Graaf
The quick-fire surprise reprieve for The Warehouse store in Northland's Kaikohe left at least one retail expert baffled, saying "this should never have happened", while another rejoiced in a happy outcome.
Chris Wilkinson, First Retail Group managing director, said the series of announcements by New Zealand's biggest general merchandise retailer indicated a degree of internal corporate disorganisation which was extremely worrying.
Chris Wilkinson, First Retail managing director. Photo/Mark Mitchell
"Big business has a huge degree of responsibility to small towns like Kaikohe. Things should never have reached this stage. Organisations like this need to have someone closely aware of their role in these small towns and have an overview to balance the economic and social responsibilities.
"What clearly happened here is that one side of the organisation was not talking to the other. It's likely the board stepped in and said 'this isn't good for our brand or our community'. No one needs this kind of publicity, especially in a vulnerable community," Wilkinson said.
On Wednesday, the retailer told staff at its Kaikohe store of a planned mid-winter closure, but just a day later, it had suddenly reversed that position.
A media statement issued early yesterday morning had delivered the bad news, telling how negotiations with the landlord meant it was "unable to secure a commercially acceptable solution, so we have no choice but to close the store at the end of June this year".
Team members were being consulted and a pop-up Kaikohe store, or a free bus to take people to Waipapa. were options, the statement said.
What clearly happened here is that one side of the organisation was not talking to the other
Regional Economic Development Minister Shane Jones quickly criticised a range of businesses including The Warehouse as "anti-Kiwi" and fretted about job losses. First Union then called for Jones to step in and broker a deal between The Warehouse and its landlord so the shop could stay open.
But there was suddenly no need for that. By lunchtime, The Warehouse issued its next statement. It had reversed its position, saying it was "not closing after all" because the landlord had got in touch and asked to re-enter lease negotiations.
One retail expert said big retailers played "hardball" in small towns, squeezing landlords for better deals.
Regional Development Minister Shane Jones. Photo/John Borren
John Levers, who owns the 3500sq m Warehouse at 39-42 Station Rd in Kaikohe, was reluctant to speak about the situation until a settlement had been reached with the retailer. Saving jobs was far more important, he said.
But he vehemently denied he was at fault over any of the lease negotiations, saying it was The Warehouse which only wanted to rent his premises for a year till July 31, 2019.
The lease did not expire till 2030 but rights of renewal meant it comes up for negotiation every few years, he said.
John Polkinghorne, an associate director of retail consultants RCG, said smaller towns often struggled to maintain services and stores and that was unfortunate.
The Warehouse, which hopes to stay open in Kaikohe. Photo/Janna Dixon
"It's good they've been able to come to an arrangement and it's a vote of confidence in a small town like Kaikohe. The Warehouse does really have a very important role in lower socio-economic small towns and rural communities, providing access to a wider range of goods," he said.
John Polkinghorne of RCG welcomed the reprieve.
The Warehouse would not necessarily downsize because of online sales, he said, but it had re-formatted existing Warehouse premises, bringing more shops under one roof, in various locations, Polkinghorne said.
"They're evolving. What they've been doing is often opening up space within larger Warehouse stores to fit in Warehouse Stationery, Noel Leeming and Torpedo7," he said, citing Sylvia Park in Mt Wellington as one example.
"But there are other places where they have been putting in some of their other brands," he said.
