Expansion within Palmerston North is the goal of new EziBuy owners Woolworths Ltd, as the founding Palmerston North brothers celebrate the work of "loyal people".
The Australian supermarket chain, and the parent company of New Zealand's Progressive Enterprises, announced today that it would acquire EziBuy Holdings Limited from founding shareholders Peter and Gerard Gillespie, and Catalyst Investment Managers.
The sale price will be $350 million.
The Gillespies have owned EziBuy for the past 35 years.
Gerard has spent the day at his Fiji holiday home while Peter shifted to Tauranga last year.
They did not immediately return calls to the Manawatu Standard but put out a statement saying: "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, although Peter retired from the day-to-day running of the business a decade ago.
Today's deal with Woolworths still needs to be signed off by the Overseas Investment Office. This was expected to be confirmed in the next two weeks.
Ezibuy, which currently employs 500 people, is one of Palmerston North's greatest retail success stories.
It started in the city in 1978 as a women's fashion and hardware retailer.
Now, it receives more than 480,000 orders each month and dispatches more than 15,000 items each day to customers throughout Australasia.
The company's main retail outlet, head office and international call centre remain at 170 John F Kennedy Dr in Palmerston North. The building is currently being rented by EziBuy, who have a long-term lease, from owners who have put it on the market.
'A LOT MORE VOLUME AND A LOT MORE WORK'
Woolworths group retail services director Penny Winn said they had a commitment to stay in the region and had no plans to shift their operations.
"As far as we are concerned, the facilities that EziBuy have here in Palmerston North are world class.
"We see great opportunities to grow the business here, and that will mean in future a lot more volume coming through Palmerston North and a lot more work.
"We think EziBuy can grow sales and we will put backing behind them to do it."
Woolworths were known as a top distribution company, but their expertise was in shifting bulk loads of produce, whereas EziBuy had shown to be the masters of moving single items and getting them to customers, Winn said.
"People these days seem to think that to be successful in distribution is all about the website, but EziBuy can do it with a catalogue and a call centre as well as the website.
"'We are very impressed with the calibre of the EziBuy business and we believe we can learn a lot from each other.
''The combination of our retail network, EziBuy's direct selling expertise and our respective loyal customer bases will provide a unique competitive advantage.''
RETIREMENT FOR THE GILLESPIES?
EziBuy chief executive Simon West said the value of the business was a credit to the Gillespie brothers.
"They were certainly ahead of their time when they started a multi-channel business back in the 70s and 80s.
"They have been slowly transitioning out and what this is today is their way of making sure the business is in safe hands for the future, and run by people who have a good track record."
"I don't know Gerard would be happy with the word retirement but it's close to what is happening, particularly with Peter."
West was excited to work with Woolworths, who would provide support for customer research and investment in distribution,
'INCREDIBLE CORPORATE CITIZENS'
Palmerston North mayor Jono Naylor said it was a shame to lose the support of the Gillespies, who had been "incredible corporate citizens" for Palmerston North.
"There's some risk for the city with it no longer being in local ownership, but I like the noises that are coming out of Woolworths so far.
"If anything they are talking expansion in Palmerston North rather than leaving."
Naylor said a $350 million investment from an overseas company was "another tick in the box" for the city's economic development.
"There's no direct change for the people and no job gains as such but overall it sends some confident ripples that a large international company is putting faith in this city.
Vision Manawatu acting CEO Rodney Wong said the price EziBuy had been sold at 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."
- Additional reporting by Fairfax NZ
- © Fairfax NZ News
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