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Current as of 19/09/14 05:20PM NZST

Christopher Adams

The Business Herald’s markets and banking reporter.

Warehouse buys into GrabOne founder's new venture

Tech entrepreneur Shane Bradley has sold a stake in his Shop HQ company to The Warehouse. Photo / Natalie Slade
Tech entrepreneur Shane Bradley has sold a stake in his Shop HQ company to The Warehouse. Photo / Natalie Slade

The Warehouse has purchased a 50 per cent stake in Shop HQ, an online retail business operated by Shane Bradley, the founder of daily deal website GrabOne.

In March Shop HQ launched pet.co.nz, an internet-based pet store that's aiming to secure a big slice of the more than $1 billion Kiwis spend on their pets each year.

Bradley wouldn't disclose the price The Warehouse paid for its stake, which it purchased last week.

The listed retailer has not made a stock exchange announcement regarding the deal.

"They wouldn't have to [make an announcement] ... it's small," said Bradley.

He said the deal had come about after he had a meeting with Sir Stephen Tindall and Mark Powell, The Warehouse's founder and chief executive, respectively.

"Basically I've got reasonable skills in building front end websites and that sort of thing and they [The Warehouse] have got amazing product sourcing capabilities and that sort of stuff," Bradley said. "If you put those two together it makes quite a bit of sense."

The Warehouse has been on an acquisition spree, of sorts, over the past eight months.

In March the company announced it would pay up to $33 million for a 51 per cent stake in Hamilton-based online sports gear retailer Torpedo7, which also operates the 1-day daily deal and Urban Daddy clothing and shoe websites.

That acquisition followed its $65 million purchase of electronics retailer Noel Leeming in December and its buyout of import business Insight Traders.

Powell said the acquisition was part of The Warehouse's "broader multi-channel approach".

"We think Shane has got a good track record and credibility in this space and can add value to our overall strategy," he said. "Like in all joint ventures we both bring something to the party."

While The Warehouse is placing a lot of focus on growing its presence in online retailing, Powell said he didn't accept the notion that the Red Sheds no longer had strong growth prospects.

"Red Sheds is a strong business and it's had nine quarters of same store sales growth - we'll keep pushing for that," he said. "But we're broadening as a business and after the Noel Leeming acquisition and the Torpedo7 acquisition we're a trading group and where we can apply our core competencies to grow we'll do that. We've become a multi-business group of which the Red Sheds is our core."

Powell wouldn't disclose the purchase price for the Shop HQ stake and said The Warehouse had not disclosed the deal to the stock exchange because of its small size.

Bradley said Shop HQ would launch an Australian version of the pet.co.nz website within the next two months. Pet.co.nz currently has 15,000 customers, he said.

"We've been going for four months [in New Zealand] and orders are growing every week - every week we're setting a new record."

Pet.co.nz stocks more than 5000 products from over 280 local and international brands and offers free overnight delivery.

Bradley founded GrabOne as a 50/50 joint venture with New Zealand Herald publisher APN News & Media in 2010.

He stood down as the daily deal website's chief executive after APN purchased 100 per cent of the business.

© Copyright 2014, APN New Zealand Limited

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