The Warehouse confirms TheMarket.com closure as group sales worsen

Name: Markets with Madison: What’s wrong with retail
Uploaded: 2024-02-23T05:00:00+13:00
Description: The Warehouse Group just sold Torpedo7 for $1 after buying it for $55.2 million. While Kathmandu’s sales are struggling. Where to now for woeful retailers? Video / NZ Herald

By Madison Reidy

Senior Business Journalist, host of Markets with Madison·NZ Herald·

9 May, 2024 09:22 PM2 mins to read

The Warehouse Group just sold Torpedo7 for $1 after buying it for $55.2 million. While Kathmandu’s sales are struggling. Where to now for woeful retailers? Video / NZ Herald

The Warehouse Group entertained several parties interested in buying its shopping website TheMarket.com, but decided it will close it in late June after about five years.

“We are disappointed TheMarket.com did not meet our aspirations and we will close the front-end of the platform,” chief executive Nick Grayston wrote in a company update to New Zealand Stock Exchange on Friday.

“When we launched TheMarket.com in 2019 we were responding to a customer need for access to goods through an omnichannel approach. The initiative also gave us the opportunity to provide our customers access to a broader range of products supplied by third party vendors.”

The closure comes as sales continue to decline for the group, falling 9.2 per cent in the three months to the end of April.

Sales at The Warehouse are worsening, but the business is seeing some growth in its grocery division.

Noel Leeming was its brand suffering the most, with a 9.3 per cent fall in sales in the quarter, despite a lift in tech wearable demand, while Warehouse Stationery was down 7.5 per cent due to a decline in office furniture demand.

The Warehouse was down 8.1 per cent, with sales for apparel and footwear shrinking but it was seeing some growth in sales of groceries and televisions.

“This has been another challenging quarter for the Group. Trading conditions remain highly uncertain,” Grayston said.

“We are focused on gross margin improvements and continued tight control of costs for the final quarter of our financial year. We will continue to invest in our value proposition, offering Kiwi families affordable essentials across all categories,” Grayston added.

The Warehouse Group made a $23.7 million net loss in the six months to the end of January, including Christmas, after selling and writing down the value of its outdoor goods retail brand Torpedo7 to Tahua Partners for $1.

It invested $52.2m into Torpedo7 since it acquired it, according to analysts.

At the half-year point its group sales were down 4.9 per cent on the prior year - the latest update shows a worsening in revenue.

Madison Reidy is the host of the NZ Herald’s investment show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.