Australian retail giant Coles Myer is pushing ahead with an expansion of its New Zealand operation with two new Kmart stores.
But with the ownership and expansion of The Warehouse still up in the air, Coles Myer's long-term plans remain unclear. A 2000sq m store will open in Whakatane beforethe end of the year, and another will open at a new Westfield complex in Albany next year. The new outlets will take the Kmart footprint to 15 general goods stores, serviced from Australia, an operation that lacks the economies of scale of either The Warehouse or Woolworths.
The market is being watched by Coles Myer closely as it awaits Woolworths' next move on The Warehouse.
Following Stephen Tindall's announcement last month of plans to take Red Sheds private, Woolworths has taken a 10 per cent stake in The Warehouse.
Woolworths and Coles Myer are fierce rivals across the Tasman.
Woolworths has made no bones of the fact it wants to expand its own general goods chain Big W into New Zealand, but has not yet signalled how it will get the sites.
Market analysts have always doubted that Coles Myer would consider selling its New Zealand Kmart sites to Big W. Kmart's performance here had been less than spectacular partly because only four or five of its present 13 sites were valuable, said analysts.
Yesterday, Rober Corbett, the former Woolworths chief executive who launched the September 27 lightning raid taking 10 per cent of The Warehouse, went public for the first time about the purchase. Corbett, who is now a consultant reporting directly to the Woolworths board of directors, said that Woolworths had a long-term strategic interest in New Zealand.
The Woolworths bid of $6.50 per share has stymied the initial $5.75 bid by Stephen Tindall and Pacific Equity Partners.
But while Tindall eyes Woolworths and guesses its next move, Coles Myer is itself facing a takeover from a consortium headed by equity company KKR and it has launched a big restructuring plan.
In Australia a retail analyst, who asked not to be named, doubted that Coles Myer would enter the Warehouse fray "Coles has more than enough of its problems to deal with," he said.
Warehouse stocks closed yesterday at $6.52, down 11 cents.
