Warehouse Group proposes axing more than 1000 jobs, closing six stores

Author
Aimee Shaw, NZ Herald,
Publish Date
Mon, 8 Jun 2020, 9:42AM
The Warehouse. (Photo / NZ Herald)
The Warehouse. (Photo / NZ Herald)

Warehouse Group proposes axing more than 1000 jobs, closing six stores

Author
Aimee Shaw, NZ Herald,
Publish Date
Mon, 8 Jun 2020, 9:42AM

The Warehouse Group is gearing up to cut its staff count by at least 1000 roles.

The group is proposing to close six stores in its network resulting in up to 950 job losses and an additional 130 cuts from its head office.

In an NZX announcement this morning, the country's largest listed retail company said it was moving to an agile business model, which would "likely see a reduction of around 100-130 roles" in its Northcote head office.

In addition to this, it plans to close six The Warehouse, Noel Leeming and Warehouse Stationery stores. The stores that face closure include: Noel Leeming Henderson Clearance Centre and Tokoroa store, The Warehouse Whangaparaoa, Johnsonsville and Dunedin Central stores and the Warehouse Stationery Te Awamutu store.

This follows its earlier announcement that it will close its The Warehouse store in Birkenhead in July.

"The proposed changes to our footprint consider factors including proximity to our other stores, shopping habits of those in the area, store profitability and lease arrangements. The group will continue to assess its store network and has flexibility in its lease renewal profile with approximately one quarter of its network coming up for renewal within the next 15 months," Warehouse Group chief executive Nick Grayston said in the market announcement.

The company said the proposals would see approximately 700-950 roles or 410 fewer full time equivalent store roles as a result of store closures.

The group has already commenced the consultation process for jobcuts in its head office as it powers on with its plans to go agile from August 31.

Grayston said the impact from Covid-19 over the past couple of months had "made it even more clear that Agile is the right model for the group".

"We are confident that agile principles will support the business by improving speed to market, collaboration, innovation and productivity, enabling us further to increase our focus on serving New Zealanders' needs in this uncertain environment," Grayston said in the market announcement.

"Based on our insights into changing shopping habits and the anticipated economic impacts caused by COVID-19, we are accelerating some changes that had already been planned.

"Value for money has never been more important to our customers and in order to continue to deliver this, we need to manage our costs and run our business more efficiently."

The Warehouse said its stores have experience strong trading since the country moved to level 2, but it said this was "a consequence of pent up demand" and is not expected to continue as the economic impacts of COVID-19 are realised.