Warehouse’s Red Sheds ‘fade to grey’

Warehouse’s Red Sheds ‘fade to grey’ as Powell aims for contemporary, not nasty

By Jonathan Underhill

April 11 (BusinessDesk) – Warehouse Group chief executive Mark Powell is toning down the use of red in the retailer’s iconic Red Sheds as part of efforts to give shoppers a better experience and shake the cheap and nasty image.

“Red is a very aggressive colour,” Powell told reporters in Wellington. The company is aiming to be “discount and contemporary, not cheap and nasty,” he said.

As part of a store-by-store $1.5 million refit, the use of red paint is being toned down on the outside of the stores and inside grey racking is replacing red shelves, which could be “a bit oppressive,” he said.

Powell led a tour of the Warehouse Porirua store to show off the finished product. About 100 sub-standard brands that “spoil our image” have been weeded off the shelves from a range of 60,000 products.

The retailer has replaced brands including Cascade small home appliances and is phasing out Transonic electronics such as stereos and televisions. In place is Kensington, a house brand for appliances, and an exclusive multi-year deal with Haier to launch an entry level washing machine, the Aspira, which will sell at $599 and $699. It has also added the Sony, Veon and Kambrook brands.

Powell, who was promoted to CEO from head of Warehouse Stationery in 2011, says the company is making up for a decade of underperformance.

Founder Stephen Tindall “did an amazing job” in the retailer’s first two decades “then we just had a lost decade, we lost our way for 10 years,” Powell said.

He also acknowledged previous missteps at the retailer, including 2008’s Project Invigorate that took 500 workers out of the stores and didn’t leave enough to stock the shelves.

Warehouse has made four acquisitions in the past six months – online retailer Topedo7, appliance retailer Noel Leeming, specialist importers Insight Traders (which has sourced perfumes among other lines) and online distribution firm Complete Entertainment Services.

Torpedo7, which began as an online retailer for mountain bikers, is to get an expanded product range as the group leverages its combined buying power, Powell said. The online company as was attractive because of its growing proportion of sales in Australia, a market where Warehouse has no plans to return as a bricks and mortar retailer.

Warehouse shares rose 1.4 percent to $3.74 and have climbed 20 percent this year. They’re rated ‘hold’ based on the consensus of six analysts compiled by Reuters.

(BusinessDesk)

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