Warehouse eyes jewellery, camping market

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The Warehouse is banking on expansion into areas where it now has relatively small market share to underpinning same store sales growth.

At the company's annual meeting today, managing director Ian Morrice identified several areas considered to offer opportunities for growth.

They included health and beauty, consumer electronics, jewellery, shoes, homewares and camping and fishing.

The Warehouse had included jewellery centres in all its stores for some years now, but in the 17 largest stores, soon to be rebranded Extra stores, it would be significantly increasing the range available, Mr Morrice said.

The expansion of the jewellery business was a good example of how the company's strategy was developing for increasing its share of markets where its was now a relatively small player.

"We're actually now starting to see customers quite comfortable to spend $500 to $1000 a time on quality jewellery at The Warehouse."

With shoes, historically The Warehouse had operated in the sub-$30 segment of the market. But it had been investing in product development and store display and presentation and was making headway and success at prices between $30 and $60.

Mr Morrice also said hunting and fishing was "a big market in New Zealand, very, very popular in this country, but we have actually a surprisingly small share of this market".

"Again we're investing in product development, we're investing in product quality, and in instore display, and again we see significant opportunities for us to continue to grow our business in the times ahead," he said.

The growth categories were "absolutely key" to underpinning same store sales growth.

The time was also right to start selling online, Mr Morrice said.

He expected online sales would grow reasonably rapidly in the next three to five years, and in future saw 10 percent of sales potentially coming from overseas.

The company would continue to look for ways to cut costs and be more efficient, both in terms of the products it bought and in the cost of doing business, and to improve the experience of customers in Warehouse stores.

For the 53 weeks to August 2 net profit excluding unusual items was up 5.3 percent from the previous year to $85.2m.

Overall net profit fell 15.4 percent to $76.8m, affected by a $7.4m post tax charge relating to the company's exit from fresh food and liquor.

-NZPA