EziBuy sold to Australian company
Aussie food giant Woolworths says it won't be cannibalising EziBuy's business, after snapping up the New Zealand fashion and homeware retailer in a $350 million deal.
Woolworths is the parent company of Progressive Enterprises, which owns and operates the Countdown, Super Value and Fresh Choice supermarket chains in New Zealand.
The deal is yet to be signed off by the Overseas Investment Office (OIO), but is understood to bypass competition watchdog the Commerce Commission.
While Woolworths has a direct selling business in Australia, director of group retail services Penny Winn said there would be "pretty much no cannibalisation".
"Our Countdown business doesn't have a general merchandise offer at all, so from a New Zealand sense there's no crossover whatsoever."
She promised that the Kiwi-owned business would continue to stand alone and retain its leadership team.
"Woolworths has invested in this company because we see it as a great business with a great management team and a great strategy for growth," Winn said.
"Our position is very much backing that strategy and backing that team to grow the business further."
EziBuy was founded in 1978, and has grown to become the largest fashion and homeware multi-channel store in Australasia.
It sold more than $200m of products over the past financial year, primarily through its website, catalogues and contact centres.
While the Australian-listed Woolworths is one of the biggest retailers in the world, Winn said it had plenty to learn from the Palmerston North-based business.
"Woollies is pretty good at logistics and supply chain, but we're used to moving full pallets and full cartons and full truckloads," she said.
"In this multi-channel world, it's about picking single items and moving those as fast as possible to the customers. EziBuy does this really, really well."
EziBuy chief executive Simon West said his company was "delighted" to have Woolworth's backing.
"Further investment in mobile, customer insights and distribution will be priorities for us now as we move forward."
The main beneficiaries of the sale are founding shareholders Peter and Gerard Gillespie.
In a statement, the Gillespie brothers said: "when we started EziBuy we never envisaged that 35 years later we would be as successful as a business as we are today.
"A huge amount of this success is due to the combined efforts of a great team of loyal people."
Catalyst Investment Managers bought into the business in 2007.
Managing director Trent Peterson said he was pleased that EziBuy would become part of the Woolworths Group, as it supported the current management team and would drive further growth.
Vision Manawatu acting CEO Rodney Wong said the price EziBuy had been sold for gave a rare insight into the value that existed in the region's businesses.
EziBuy had traded heavily off the geographic strengths of Palmerston North for logistics and distribution.
It was a prime example of how businesses in the area should look to position themselves in future, Wong said.
"Congratulations to the local owners, they're great guys and this will be better than winning Lotto for them.
"It's also recognition of the ongoing contribution that they've put into the local area, and what can be achieved with hard work here."
- © Fairfax NZ News