The warehouse warn

John Journee, interim manager of Warehouse Group, said that the group's sales trend continued to show a better trajectory in January and February, but the gross margins are still restricted in all three brands.

“We are encouraged by the positive customer reaction if we receive our product and pricing, and this will underpin our performance recovery if we carry out these improvements on a scale,” said Journee.

“While we are probably at the end of the discretionary retail cycle in New Zealand, this financial performance is unacceptable.”

He said that the company continued to focus on “prudent fiscal management”, but continued to refer to the uncertainty of the group's performance.

“At this point, the best estimate of the management for the H2 GJ25 EBIT is that it largely corresponds to the H2 FJ24 EBIT loss of approximately $ 14 million.”

The company expects the recovery of the economy to improve consumer mood and encourage families to issue again.

Analysts react

The Forsyth Barr -Analyst Paul Koraua said the result reflected the hard competition that the warehouse was faced with in the past few months.

“From a sales perspective, it was actually a little better than me and the rest of the market had expected. Basically, the entire feedback that we received from individual dealers is that they have hit the edge, ”said Koraua.

He believes that the cost reduction for the warehouse will be of crucial importance in the future and that in the first half will look for savings.

“A good result in New Zealand is currently if you can keep your sales shots flat. If you are the warehouse and want to earn 4 million US dollars this year, you will stare the run to make a loss and may be more difficult to get a loss if you lose a little turnover. “

Devon's Funds Management Manager of Retail, Greg Smith, said the camp has the same pain as other retailers, especially with regard to the marginal pressure.

“It's a bit like the slogan, literally everyone gets a bargain and a few more. Many companies that are focused in Germany find things quite hard because they are a lot of advertising activities that need a lot of advertising activities, ”said Smith.

He believes that the warehouse may have more pressure on performance than other retailers, especially when you consider that “trying to turn a turn in the middle of one of the worst recessions that we have had for decades”.

“Today's announcement may tell us that they have spoken about the economy on the cyclical soil, but maybe things have not reached the low point.”

Both Koraua and Smith were certain that an announcement about the future managing director would be crucial for the trust of the shareholders.

“It is crucial to be careful to make sure you have the right strategy and set up the right person,” said Koraua.

“This is a business that generates sales of USD 3 billion, and you know that this year $ 4 to $ 6 million EBIT will earn so that you make a loss of around $ 3 billion. This business should earn more money.

“I challenge many people to find another company in the world that would have similar metrics.”

The warehouse will publish its results of the first half on March 21.

Tom Raynel is a multimedia business journalist for the Herald, who covers small businesses and retail.