Warehouse Group, New Zealand's largest listed retailer, has agreed to buy SchoolTex from Postie Plus Group for $9 million, adding the nation's biggest supplier of school uniforms to its department stores.
"We see the Schooltex uniform brand complementing The Warehouse's existing school apparel and back to school product range," chief executive Mark Powell said in a statement.
Postie Plus shares have shed 57 per cent in the past 12 months and the clothing retailer posted a $13.2 million loss in its latest year after writing down the value of stock by $4 million. Sales and margins were also hurt after it outsourced its distribution centre, which got overwhelmed by the transfer of inventory arriving at the same time as new seasonal stock.
The deal will allow Postie Plus to reduce debt to $12.2 million from $21.1 million, giving the retailer more flexibility to invest in its clothing, health and beauty product ranges and complimentary products. It will also free up floor space for new products, it said.
The reduction in debt "is certainly more manageable and puts the business on a more sustainable business going forward," Postie Plus CEO Richard Binns told BusinessDesk. He declined to give details of his company's plans to use the freed up space in its stores.
Warehouse will pick up six Schooltex support office and regional staff at the end of February. Schooltex supplies uniforms and sportswear to more than 1,100 schools.
Postie Plus stock last traded at 10 cents. Warehouse last traded at $3.66 and has gained 19 per cent in the past year.