17 May 2012

The Warehouse waits before judging refit's success

7:24 am on 17 May 2012

The Warehouse says investors may need to wait a year to see whether new store makeovers are getting more customers through the door.

The company is spending about $130 million on upgrading the decor in most of its 89 stores.

The Warehouse facelift includes new signage, lower shelves and revised layouts.

Chief executive Mark Powell says it's the first nationwide refit in 30 years of trading.

He says the stores are being refitted in blocks of five and each refit takes about eight weeks.

The chain is trying to rejuvenate its image after several years of little growth.

Mr Powell says it may take time to tell if the strategy is working and it could be a year to 18 months before any long-term conclusions are drawn.

He says The Warehouse will also be expanding its presence on the web and the aim is to have the full general merchandise online by July.

The firm is also looking at getting some specific bargains online, to be offered in a daily deal format.

Mr Powell says parallel importing is becoming more and more important to the company and The Warehouse is now stocking brands like Levi's and Breville.

He says it's a move that suppliers and other retailers don't like at times.

"We have constructive discussions with suppliers, often the suppliers we're talking about won't supply us for various reasons, whether they've had pressures off other retailers I don't know, but they won't supply us, so we're left with no alternative in many cases", he says.

The Red Sheds made just under $338.4 million in the quarter to the end of April, recording same-store sales growth of 1.2%.

Including Warehouse Stationery, the company made $394.2 million in its quarter to the end April, a rise of 3.3% compared with the same period a year ago.