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Current as of 29/12/14 03:40PM NZST

Anne Gibson

Property editor of the NZ Herald

Red sheds about to take giant leap

The Warehouse's expansion strategy is to deliver best discount store experience.

Mark Powell unleashed a stinging attack on competitors' behaviour. Photo / Dean Purcell
Mark Powell unleashed a stinging attack on competitors' behaviour. Photo / Dean Purcell

The Warehouse is about to embark on a radical new expansion strategy using television.

Chief executive Mark Powell told yesterday's Retail Australasia Summit & Expo in Auckland how, after two years, the business had been repositioned and was ready for its next giant leap.

Direct television would be used to reach more customers who would be able to buy online and via call centres, Powell said, telling of plans to build a 100-year business via a number of different platforms.

In a stinging attack on competitors, the Welshman, who moved up from The Warehouse divisional ranks two years ago, also told how the national chain had been the victim of anti-competitive behaviour from rivals.

"The Noel Leeming purchase allowed us to get access to brands that would not sell to us because of pressure from other retailers," he said.

"It's all hush-hush but it goes on constantly in New Zealand because it's a small country ... constantly!"

He said customers were the ultimate losers in that battle.

Powell revealed how actors were employed to mime customers.

"We're going through a process of staff customer training, done with a bunch of actors, improvisation and it's a bit of fun and it's about getting staff to realise customers are people and we have to engage with them in our stores."

The Warehouse aim was to offer buyers the best discount store experience - "head to toe essentials, everything for the home, everyone should buy their underwear, their basic clothing at The Warehouse".

Powell also told of the struggle to revive The Warehouse after years of severe under-investment and he revealed how staff were dispirited, the chain had a limited online offer and little money had been put into developing new stores.

"The key thing was to go back to what The Warehouse started with," he said referring to Sir Stephen Tindall's original vision.

"The issue was that with all the pressures, we drifted away. If we had put customers first, we would have invested in our stores."

Powell confessed that before the business transformation in the past two years the widespread image of The Warehouse was very poor.

"Customers did think we sold cheap crap and we needed to deal with that, even if that means writing off $1 million of stock. So we set out to be the house of bargains discount department store," he said, telling of a drive for parallel imports and strong promotions, particularly around key dates Christmas, Easter and Mother's Day.

"Pricing is everything. You can't walk away from that but price should not mean cheap and nasty. It should mean discount, contemporary."

- NZ Herald

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