Warehouse on expansion trail

By KARYN SCHERER

An uncertain economy and the distraction of moving into Australia has not deterred The Warehouse Group from planning its biggest-ever expansion over the coming year.

The retail juggernaut revealed yesterday that it planned to open a dozen new stores throughout the country over the next 12 months, including five red sheds and seven stationery outlets. It also plans to extend a further seven of its red sheds and refurbish 18.

The move, which follows yet another record set of annual results, will see it increase its total selling space by 18 per cent by next August and will help boost sales while it grapples with its recent acquisitions in Australia.

Australian retail giant Coles Myer has already responded to its purchase of discount chains Silly Solly's and Clint's Crazy Bargains by trialling a new discount format called "Dirt Cheap Warehouse."

At a briefing yesterday, the man being groomed to replace Stephen Tindall as managing director next year, chief operating officer Greg Muir, warned analysts and the media not to expect "anything wild" from the Australian businesses for at least two years while it tries to bring them up to speed with its New Zealand operations.

But Mr Tindall also stressed the company was "looking forward with glee" to the coming year, maintaining there was still good potential for growth in New Zealand, particularly in areas such as apparel, gardening and books.

Its share of apparel sales has surged over the past year, with "exceptionally strong" sales of women's clothing boosting overall clothing sales by 30 per cent.

It is also claiming "huge uptake" of its deal with United States-based computer manufacturer Gateway, with 700 computer sales in the first eight weeks of the partnership.

After years of being shunned by major brands, the discount retailer is also looking to do further deals with recognised names. It is delighted with the success of its deal to sell Black & Decker small appliances, and will begin selling Sanyo browngoods from next month.

While conceding Telecom and Vodafone had fought back strongly in the mobile phone market, it also hinted further mobile deals were likely towards the end of the year.

In a move that will pit it against Eric Watson's Blue Star Group, it revealed it is finally ready to take on the $300 million commercial stationery market, with a trial of online sales due "very soon."

In line with analysts' forecasts and despite what it described as one of the toughest second halves it had endured "for some time," the company boosted its pre-tax profit by 31 per cent to $108.1 million for the year ended July.

Its bottom-line profit was $70.1 million - also up by nearly a third on last year.

It also played down speculation it is talking to Coles Myer about taking the ailing Kmart business off its hands in New Zealand, saying it would be interested only "at the right price."

The record result has seen shareholders receive a final dividend of 4c a share, bringing the total dividend for the year to 12.5c, after adjusting for the March bonus issue. The dividend will be paid on November 27.

While the payout is higher than last year, the company has warned shareholders not to expect any more special dividends in the near future while it gets its Australian businesses into shape.