Christopher Adams

The Business Herald’s markets and banking reporter.

Warehouse shrugs off Torpedo7's history

The Warehouse has become the majority shareholder in online retailer Torpoedo7. Photo / NZH
The Warehouse has become the majority shareholder in online retailer Torpoedo7. Photo / NZH

The Warehouse chief executive Mark Powell is playing down the significance of an Australian company's aborted investment in Torpedo7, the online retailer in which his firm has become the majority shareholder.

In March last year ASX-listed Carsales.com revealed it had purchased a 15 per cent stake in the Hamilton-based internet sports gear seller, which also operates the 1-day daily deal and UrbanDaddy websites, for A$7.2 million.

Just over two months later, however, Carsales.com announced it had come to a mutual agreement with the New Zealand firm to "unwind" its investment as a result of "circumstances isolated to the Torpedo7".

Race Louden, Torpedo7's marketing general manager, was quoted in a media report as saying it had become clear that an investment from a listed company would have a "potentially limiting" influence on the business.

"We found with a shareholding you got the benefit of [Carsales'] capital, but it was potentially limiting for a business like us which is different and, for want of a better word, anti-corporate and very entrepreneurial," Louden was reported as saying.

Nine months later Torpedo7 appears to have had a change of heart, agreeing to sell a 51 per cent stake in the business to The Warehouse, New Zealand's largest listed retailer, for up to $33 million.

Powell did not have any concerns about an anti-corporate mindset within Torpedo7 leading to conflict with its new shareholder and said there was no reason why a listed firm should have a limiting influence on the online retailer.

He said Louden probably meant "anti-bureaucracy" when he referred to Torpedo7 as being "anti-corporate".

"If the listed company is bureaucratic and slow that can be negative," Powell said.

"There's no need for this business [The Warehouse] to be thought of as corporate and big."

Powell said The Warehouse had "courted" Torpedo7 for the past nine months and during that time the two firms had "really got to know each other" and their cultures were well-aligned.

"I think in that process [Torpedo7] have come to realise that all companies aren't the same - just because you're big doesn't mean you're difficult to work with."

He said it would be inappropriate for him to discuss the details of what went wrong between Carsales.com and Torpedo7.

Torpedo7 founder Luke Howard-Willis did not respond to a request for comment.

- NZ Herald

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