26 Nov 2016

TWG Financial Services stymied by fewer-than-expected customers

12:47 pm on 26 November 2016

The Warehouse Group has warned shareholders its new financial services business is performing below expectations.

The Warehouse shop in Auckland

Photo: 123RF

The retailer told shareholders at the annual meeting in Auckland on Friday the new financial services business was facing increasing competition, and was under pressure to grow.

Group chief executive Nick Grayston said the financial services business did not start out with as many customers as had been hoped when it launched early last year.

"In any start-up business you have estimates around how things are going to perform, specifically an assumption around how many of our joint venture customers we would be able to transfer across." he said.

"The number we have gotten across so far is lower than we expected, which means we started on a lower base."

However, he said the business was otherwise performing well with an offering of low-cost credit cards and a suite of financial services which included travel, health, car, home and contents insurance.

Mr Grayston said The Warehouse Group, which included the Red Sheds, Warehouse Stationary, Noel Leeming and Torpedo 7 brands, was also facing increasing pressure from local and international competitors.

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