KEY POINTS:
First quarter sales at The Warehouse Group were down 1.7 per cent from a year earlier with the company saying consumer electronics were particularly disappointing.
The company said today that group sales for the quarter ended October 28 were $374.5 million. For just The Warehouse stores first quarter sales were down 0.6 per cent to $327.7 million, with same store sales down 1 per cent.
Managing director Ian Morrice said that trading conditions were challenging for The Warehouse, especially from late September through to the end of October.
"The consumer electronics category was particularly disappointing this quarter, mainly as a result of clearance activity in older technology, plasma and LCD televisions, and by not getting our expected share of the sector uplift during the Rugby World Cup," Mr Morrice said.
Sales of seasonal outdoor categories such as outdoor furniture and gardening had been slow to establish momentum, but the apparel category was performing well.
"Customers are responding to design-led improvements in range and presentation, and noticeable improvements in quality and fit," Mr Morrice said.
Closure of stores in Milford and Wellington for reinstatement and relocation had added to the shortfall in total sales for the quarter compared to the previous corresponding period.
Warehouse Stationery's first quarter sales were down 8.8 per cent to $46.8m, with same store sales down 7.2 per cent.
Sales at the stationery stores were hit by availability problems due to the implementation of a centralised distribution system, Mr Morrice said.
Business-to-business sales were also affected by a planned reorganisation of that unit.
"The negative sales impact was expected and the reorganisation has now been completed with our website transactional and a new business-to-consumer module added and operating."
Looking ahead, Mr Morrice said that despite the challenging first quarter, The Warehouse was well-positioned for the critical Christmas trading period.
"However, the first quarter has highlighted the unpredictable nature of the current trading environment, and has reinforced earlier expectations that retail spending will tighten as discretionary income comes under pressure from macroeconomic factors."
- NZPA
