Change of heart saves Warehouse in Kaikohe

Esther Edmonds (left), Makere Moon and Michelle Rountree, who were fundraising outside The Warehouse for Kaikohe Pentecost Sunday School on Thursday were among the first to find out the store would not be closing after all.

A last-minute change of heart by The Warehouse and its landlord has saved 33 jobs in Kaikohe.

On Wednesday afternoon The Warehouse informed staff it would be shutting down the Kaikohe store after reaching an impasse over the lease on its Station Rd building.

The move was dubbed "corporate irresponsibility" by Regional Economic Development Minister Shane Jones, although the company had pledged to redeploy staff at its other Mid North stores, or try to find new premises in Kaikohe.

The news spread quickly through the town, sparking concerns for employees and residents who could not afford to drive to Waipapa or Whangarei to do their shopping. By 11am, however, the decision had been reversed, making it one of the shortest planned closures in New Zealand retail history.

Staff in Kaikohe store had been instructed not to speak, but Warehouse chief executive Pejman Okhovat announced in a statement that the building's owner had got in touch and asked to re-enter lease negotiations. He was confident the store could stay open, pending final contract confirmation.

"We've always wanted to stay in Kaikohe, that's why we'd been working hard with the landlord to negotiate new leasing terms since July last year, and we're really pleased he's now decided to agree on a new lease," Mr Okhovat said.

The Warehouse is one of the biggest employers in Kaikohe, after Ngawha prison, the Far North District Council and New World.

Danielle Todd, who moved her family to Kaikohe from Auckland four years ago, said losing The Warehouse would have been "a real loss". Several of her relatives worked there, and it was where she bought her kids' clothing and school uniforms. If it had closed it could have triggered other closures, just as locals were working hard to build the town up.

Esther Edmonds, who was running a fundraising stall outside the store and was one of the first to hear news of the U-turn,was delighted.

"The people here are resilient, but they have suffered enough," she said.

Kaikohe-Hokianga Community Board chairman Mike Edmonds said residents had contacted him with mixed views. Some had said a closure would have been devastating for the town, others that it would have opened up new opportunities for small main street retailers.

Meanwhile Mr Jones wasn't backing away from his earlier criticism, despite the company's change of heart.

"This is about people's lives. It's where Kaikohe people buy their kids' school uniforms and stationery. The notion that The Warehouse was prepared to consign Kaikohe to zombie town status because it couldn't find a compromise with the asset owner beggars belief," he said.

The Far North District Council was involved behind the scenes in the U-turn, and was delighted with the outcome, a spokesman said.

And while the council had not been "materially involved" in the negotiations between The Warehouse and its Kaikohe landlord, Mayor John Carter had held discussions with the company's chief executive, and council chief executive Shaun Clarke had been working with the landlord.

Mr Jones said The Warehouse had wanted the four-year lease reduced to two years, but the landlord, who was "not independently wealthy," had been told by his bank that a two-year term did not offer enough certainty.

Mr Okhavat however said it was the landlord who wanted a two-year term.

Kaikohe's unemployment rate is one of the highest in Northland and the country.

National chains that have pulled out of the town in recent years include Subway and KFC.