Warehouse buys Noel Leeming Group

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wellygary

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#112462 10-Dec-2012 08:58

Well it looks like the global death of electronics/appliance stores has finally starting to gain pace in NZ,

https://nzx.com/companies/WHS/announcements/230883 - PR was originally emailed to me, had to wait for the link to appear on NZX...

The Warehouse Group announces that it has signed an agreement to acquire Noel Leeming Group, the specialist Consumer Electronics and Home Appliance retailer.

Under the terms of the agreement The Warehouse Group will acquire the shares of Noel Leeming Group Limited for $65M, with immediate completion to occur today.

The Noel Leeming Group has 92 stores throughout New Zealand and an online retail presence, offering a broad range of branded Consumer Electronics, Home Appliance and Entertainment products.

The Warehouse Group believes this acquisition will support its transformation into New Zealand’s pre-eminent Non-Food Retail business and support its ongoing strategy to improve the “Red Sheds” performance. The Consumer Electronics and Home Appliance sector has experienced substantial growth over the past five years and as people continue to purchase technology and entertainment products in an increasingly ‘connected’ world, the sector will continue to grow.

Noel Leeming Group will operate as a separate trading division with its own retail brand positioning and personality. The additional retail brands complement The Warehouse Group’s current retail brands “TheWarehouse” and “Warehouse Stationery”.

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#729497 10-Dec-2012 09:06

Link?

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KShips

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#729500 10-Dec-2012 09:07

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10853046

surfisup1000

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#729510 10-Dec-2012 09:19

wellygary: Well it looks like the global death of electronics/appliance stores has finally starting to gain pace in NZ,

Is the warehouse going to shut Noel Leeming down? I couldn't see where it says this myself. I suppose they could rebrand but I wouldn't have thought they'll shut down stores.

I'd have thought it was a desperate move by warehouse management who are scrambling for new business directions and growth. I'm not sure they'll find much growth in the cutthroat retail electronics sector.

Goosey

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#729522 10-Dec-2012 09:37

surfisup1000:
wellygary: Well it looks like the global death of electronics/appliance stores has finally starting to gain pace in NZ,

Is the warehouse going to shut Noel Leeming down? I couldn't see where it says this myself. I suppose they could rebrand but I wouldn't have thought they'll shut down stores.

I'd have thought it was a desperate move by warehouse management who are scrambling for new business directions and growth. I'm not sure they'll find much growth in the cutthroat retail electronics sector.

Read the press release.. Its just a bob standard aquisition. No impact to either brands or offerings (except for the normal back office shuffling in a few years time).

sbiddle

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#729529 10-Dec-2012 09:42

The word on the street for months has been the private equiry owners of Noel Leeming were desperate to get out.

sidefx

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#729532 10-Dec-2012 09:44

Gooseybhai:

Read the press release.. Its just a bob standard aquisition. No impact to either brands or offerings (except for the normal back office shuffling in a few years time).

And possibly reduced competition? (not really my area, so no idea if this could\would be a result of this... but one would think at least a bit)

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lchiu7

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#729537 10-Dec-2012 09:47

I wonder if they will get rid of the Bond & Bond brand unless they want to keep as a "lower" cost brand.

Foodstuffs does the same with New World and PaknSave but PaknSave is clearly budget while Bond & Bond, apart from not offering Fly Buys sells the same stuff as NL.

Staying in Wellington. Check out my AirBnB in the Wellington CBD. https://www.airbnb.co.nz/h/wellycbd PM me and mention GZ to get a 15% discount and no AirBnB charges.

surfisup1000

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#729540 10-Dec-2012 09:48

Gooseybhai:
surfisup1000:
wellygary: Well it looks like the global death of electronics/appliance stores has finally starting to gain pace in NZ,

Is the warehouse going to shut Noel Leeming down? I couldn't see where it says this myself. I suppose they could rebrand but I wouldn't have thought they'll shut down stores.

I'd have thought it was a desperate move by warehouse management who are scrambling for new business directions and growth. I'm not sure they'll find much growth in the cutthroat retail electronics sector.

Read the press release.. Its just a bob standard aquisition. No impact to either brands or offerings (except for the normal back office shuffling in a few years time).

In that case, I don't understand the OP....

"Well it looks like the global death of electronics/appliance stores has finally starting to gain pace in NZ"

In what way?

keewee01

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#729542 10-Dec-2012 09:50

I doubt very much that, even medium term, The Warehouse would shut down Noel Leemings. It will just be another branch of The Warehouse Group as Warehouse Stationary is now. Maybe they'll rebrand to Warehouse Electrical? (must go and register some domains...

)

Will be awesome if I am able to use my Team Card to get staff discount at Noel's!!! (Bugger - just bought some electrical goods over the weekend)

sbiddle

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#729544 10-Dec-2012 09:53

In the old days Bond & Bond used to carry a lot of different products, particularly in whiteware when F&P used to have exclusive supply contacts.

Now they just carry virtually the identical stock between stores, but I think were scared to cull the Bond & Bond brand because it still had a loyal customer base of people who didn't realise it was just Noel Leeming with a different name on the door.

Dunnersfella

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#729551 10-Dec-2012 09:59

Yeah the OP may have been a little off the money...
It appears that the Warehouse are merely looking to get in on the action and believe they can use Noel's channels to pick up some brands who wouldn't normally put their items on their shelves.
In picking up Noel Leeming, they will also have a chain where you can pay off your goods over half a decade via GE, or gain FlyBuys. However, anyone who thinks it will be 'business as usual' has rocks in their heads.
They've been losing money for years, they were constantly propped up by the Gresham Group via goodwill gestures.
So - to make money, they either need to lift profits by raising prices and keeping them higher (yeah right, they'd get slaughtered in the free market), reducing staff costs... nope (they already employ sales staff under minimum wage and use their commission to top them up), increasing terms of trade in their favour via their suppliers (you need to sell more goods in order to do that) or, and most likely in my book -
Dropping Bond & Bond all together.

Moving into 2013 we may see 50" Samsung LED's in The Warehouse, Sony Muteki home theatre systems alongside F&P washing machines and people swiping their GE card to buy BluRay's and parallel imported perfumes?
Or, it could all just go belly up and kick the Warehouse's butt...

Goosey

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#729557 10-Dec-2012 09:59

I wonder if the Bond and Bond brand had to be carried on for a set period of time when the former former owners (PRG) of NL purchased them?

wellygary

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#729576 10-Dec-2012 10:28

Certainly in the last year, the Warehouse have been wanting to move up the value chain, I guess they see this a way to get easier access to better brands,

However the thing that stares out like dogs balls is that NL and the Warehouse are co-located in huge numbers of big box development,

It will not take long for the accountants to start looking at rebranding the appliance section in these Warehouses as a NL "stores within a store" and then not renew the NL lease when it comes up for renegotiation.

Sure it will not happen overnight, but the Warehouse will want more than "back office synergies" out of this deal,

Once Digital switch over is finished at the end of 2013 the sale of TVs is gonna take a fairly large hit ( esp year on year sales)-

Dunnersfella

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#729610 10-Dec-2012 10:56

An in-house Noel Leeming area within a Warehouse Mega store may well be on the cards in the future...
Combining home entertainment with their CD / BluRay selection would be a tempting proposition I'm sure, something that Dick Smith attempted to replicate when taking on JB Hifi.
That, as we know, did not work so well.
But hey, the Warehouse certainly plays the same low price / make a lot of the profit in the back end game as JB's, so maybe it will work?

DarthKermit

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#729887 10-Dec-2012 17:21

In PN where I live, Noel Leeming and Bond & Bond are right next door to each other.

As for the aquisition news, as long as NL don't start selling junk like Transonic I'm not fussed.

Whatifthespacekeyhadneverbeeninvented?

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