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Warehouse 1Q sales drop as discount stores change to 'everyday low pricing' model

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Warehouse Group's first quarter sales were weaker than the year-earlier period after the retailer changed the pricing strategy at its flagship 'red shed' discount department stores to "everyday low pricing".

Sales fell 1.7 percent to $645 million in the first quarter ended Oct. 29, the Auckland-based company said in a statement. The Warehouse discount department stores posted a 5.2 percent decline in sales to $357.9 million while Warehouse Stationery sales dropped 7.2 percent to $59.1 million. In contrast, sales at its Noel Leeming appliance and technology chain lifted 6.3 percent to $195.1 million, while Torpedo7 sports goods sales increased 3.7 percent to $39.2 million.

Under the leadership of chief executive Nick Grayston, who took over from Mark Powell in December 2015, Warehouse has embarked on a three-year strategy to lift profitability by removing the complexity and cost of an inefficient operating model and reshaping........

© The National Business Review