Online revenue ‘nosedives’ at Kiwi retailer.

 

New Zealand's Warehouse Stationery reported a low single-digit increase in the top line in the first half of its financial year.

 

For the six months ended 29 January 2023, Warehouse Stationery achieved revenue of NZ$124.1 million, a year-on-year increase of 1.7 per cent.

 

Sales grew by 18 per cent in Q1, but fell by almost nine per cent in the second quarter. Transactions were up by 17 per cent while store foot traffic grew by 19 per cent.

 

In-store sales improved by almost 12 per cent versus the prior period, which had been impacted by COVID lockdowns. On the other hand, online revenue nosedived by around 46 per cent to NZ$11.5 million, or 9.3 per cent of sales. Click and collect as a ratio of online revenue dropped by more than ten percentage points to 19.3 per cent.

 

Gross profit was virtually flat at NZ$57 million, with gross margin slipping by 100 basis points to 45.9 per cent. The margin decline was blamed on a change in sales mix due to a decrease in higher margin work/study-from home furniture, and lower branded product rebates in the technology category.

 

Operating profit of NZ$8.9 million represented a decline of eight pecent versus the same period last year. This was due to the lower gross profit and increased operating costs.

 

In H1 FY2023, four Warehouse Stationery locations were integrated into neighbouring Warehouse supermarkets. This takes the number of these store-within-a-store outlets to 39, more than half of Warehouse Stationery’s total footprint of 67.

 

Three standalone stores have also been closed in the past 12 months.

 

Speaking about the Warehouse Group as a whole, CEO Nick Grayston said: “We have experienced a very challenging retail trading environment in the past six months, and we are taking decisive action to improve financial performance and operational efficiency.”

 

This has included “difficult cost-cutting decisions” such as axing 340 roles at the Auckland head office. The 1-Day daily deals website is also closing down, while online marketplace The Market will be integrated into the group operating structure.

 

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