Changes in pipeline for Warehouse

Keith Smith (right), seen here in 2004 with Warehouse founder Stephen Tindall, will step down as chairman in favour of Graham Evans. Photo / Paul Escourt

The Warehouse's board shake-up offers an opportunity to focus on its position in the market and improve its performance, says Graham Evans, who is soon to be chairman.

Yesterday the company announced to the Stock Exchange that incumbent Keith Smith would stand down to deputy chairman on May 2.

Smith will remain a director, the chairman of the disclosure committee and a member of the audit committee and the remuneration, talent and nomination committee.

As announced in January, the company's chief executive, Ian Morrice, will be handing over the reins to Mark Powell.

The two executives have been working together since the beginning of the year to ensure a smooth transition - the official handover will also be on May 2.

Evans told the Herald that he brings a strong retail background, having worked in the industry for 40 years, and 14 years' experience as the managing director of Woolworths (NZ).

Asked whether he was excited about the role, he replied, "Absolutely. This ... will be the culmination of my career. The Warehouse will be focusing on retail, we are a retailer, and there is an opportunity to improve our performance."

Evans said there had been a marginal improvement in retail over the past two years but consumer confidence remained soft, and people were not buying unless goods were discounted.

He has been a director of The Warehouse group since 1998 and is currently the chairman of The Warehouse's remuneration, talent and nomination committee and a member of the audit and corporate governance committees.

Retail analyst Tim Morris of Coriolis said The Warehouse was in a tough position, partly due to the retail climate and partly because it competes in so many categories.

"They compete with everyone. If the garden sector takes a hit then The Warehouse feels it. Retail has became more competitive [in New Zealand]. There is a lot of pressure on The Warehouse, and Graham's appointment shows that a retail focus is returning to the business. Retailing is in his bones."

Morris said The Warehouse's move into food was a "good idea" that had been poorly executed.

But he noted that it was a good sign to have a chairman who understood retailing "steering the ship".

Market commentator Arthur Lim said the changes to the board would come as no surprise, and that the company had been going backwards in terms of market share for a number of years.

Lim said the company still produced strong sales despite the tough trading conditions but claimed there was a feeling that it needed to reinvent itself.

"The change in chairmanship shows that the company is going to look at refocusing and at strategy. The Warehouse has to work on that."

Lim said that in recent years the company had been "late" to capitalise on certain segments of the market that has seen competitors such as JB Hi-Fi soar in success.

He said that in the earlier years the company had made toys and CDs its own but had lost that edge, especially when it came to appliances and home entertainment.

"There needs to be a revamp of the business and indications are that change is coming to The Warehouse," Lim said.

Warehouse shares were trading at $3.53, up 10c, at market close yesterday.