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The Warehouse cuts up to 140 jobs in restructure

The Warehouse cuts up to 140 jobs in restructure; shares unchanged

By Sophie Boot

July 23 (BusinessDesk) - Warehouse Group will cut between 120 and 140 full-time jobs across its flagship 'red shed' stores in a restructure.

The Warehouse division chief executive Pejman Okhovat, who oversees the big-box retail business, said the company needs to "evolve from a traditional, hierarchal structure to one that is fit for the future". The restructure will mean increased staffing levels at peak times, better leadership support during trading hours, improved sick and holiday cover and better-defined career pathways, he said.

The company said the changes have been made after a three-week long consultation. Store managers are meeting with every impacted employee today and the company is making "every effort" to move employees into vacancies, having used temporary staff to cover recent openings to keep the permanent roles open for redeployment, it said.

First Union said the situation was a "mess", and workers are "living in limbo" with a lack of information and the new jobs available not offering as many hours.

The union said it has been told that workers have from today until Aug. 1 to apply for the jobs, with interviews beginning today and finishing by Aug. 8 and a decision finalised by Aug. 10. Organiser Kate Davis said the union has "urgently requested a meeting to clear up the mass confusion that is putting workers in a state of turmoil, which The Warehouse has agreed to."

"There was not enough time during the consultation process, and now interviews have apparently begun today when the jobs aren’t even up on their website yet. It’s a mess, and members need answers," Davis said. "There is already misinformation out there. Some staff believe they will not receive redundancy if they do not apply for any of the new roles, and these new roles do not suit many workers who need a decent number of secure hours.”

Warehouse Group, the listed entity which encompasses The Warehouse, Noel Leeming, Warehouse Stationery, and sports goods business Torpedo7, last reported earnings for the quarter ended April 29. In that, its sales across its brands lifted to $701.2 million from $683.5 million a year earlier, which is said was in line with expectations and kept intact its forecast for full-year earnings of $50 million-to-$53 million, a decline of about 25 percent from the year earlier.

However, sales at its 93 red shed Warehouse stores slipped 0.9 percent to $388.2 million in the quarter, as the number of units sold lifted 7.5 percent, resulting in an overall reduction in gross margins, the company said. Apparel traded well with an increase in gross margins, and grocery sales also lifted while sales of DVDs, music and other items in the communications category declined, it said.

The retailer is in transition, moving its red shed business to an 'everyday low prices' model alongside cutting down on sales, marketing and stock clearance activity under the leadership of group chief executive Nick Grayston, who took over from Mark Powell in December 2015.

Grayston has already kicked off a group restructure streamlining the various businesses, which included cutting 143 back-office roles last year.

The shares recently traded at $2.03, down 2.4 percent this year.

(BusinessDesk)

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