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Australian investor Gresham Private Equity is to make a push into New Zealand fashion retail and open 16 Witchery stores around the country by the end of next year.
But the private equity firm has rubbished reports it is about to sell its Noel Leeming and Bond & Bond chains in New Zealand.
Witchery is a household name in Australia with 94 outlets including 32 concessions at David Jones department stores.
Gresham - which bought the chain in July last year from Solomon Lew for around A$130 million ($146 million) - expects to open the first of its New Zealand Witchery stores by September and is aiming for a handful of outlets by Christmas, before rolling out 16 by the end of 2008.
They will compete in the already crowded retail market with Australian rivals Country Road and Cue and New Zealand-owned chain Max.
Iain Nairn, the Melbourne-based Witchery chief executive, said the company has been in talks with retail landlords and with top-end retailers such as Smith & Caughey about operating concessions in their stores.
Witchery is the latest in a string of Australian retailers and private equity firms to claim a slice of the New Zealand retail pie, including Kookai, Secret Shhhh, Shoo Biz, Roxy and Christopher Chronis Design.
Nairn - who Gresham appointed to head the chain - is positive about prospects for Witchery in the New Zealand retail sector.
He was encouraged by New Zealand returns for Cue and Country Road and was bringing forward its Witchery's expansion.
"They seem to be performing quite well and New Zealand's sales per square metre in shopping centres are the same as we have in Australia," he said.
Meanwhile, Gresham managing director Roy McKelvie said he was rankled by recent media speculation that the group was planning to sell or float Noel Leeming and Bond & Bond.
"There is no sale; we have not appointed an investment bank to advise us; we are not looking to sell, or are unhappy with Noel Leeming which is doing very well," McKelvie said. "But if someone came along and offered us a gazillion dollars of course we would sell."
Nairn said Witchery had experience of the New Zealand market from its online sales to New Zealanders and had obviously visited the market and collected demographic information.
"We are feeling quite confident but we will do it as a phased approach."
There were similarities with the New Zealand-owned fashion chain Max, which has 36 stores.
But Nairn said Witchery outlets were less fashion focused, aimed at slightly older consumers and slightly more expensive.
He said the New Zealand specialist fashion retailing was less built around discounting than Australia where its rival Myer held constant sales, so margins here would be better.
Witchery has contacted retailers Smith & Caughey in Auckland, Kirkcaldie and Staines in Wellington, and Ballantynes in Christchurch.
Mall operators Westfield and Kiwi Property Income Trust have also been in talks.
