The Warehouse Group – Operating Model Announcement Feb 2017

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Market Information Services Section
New Zealand Exchange Limited
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23 February 2017

The Warehouse Group Confirms Operating Model Changes

Further to an announcement on 10 January 2017 which outlined changes to our Group operating
model, the Warehouse Group Board is providing an update to the market on progress.

Over the past few weeks, The Warehouse Group has consulted with its teams located at the Group’s
Store Support Office in Auckland in addition to some regional centres. Store teams do not form part of
this process.

The consultation included structures designed to combine the leadership of both The Warehouse and
Warehouse Stationery, along with the separate combined leadership of Noel Leeming and Torpedo7.
It also includes moving the support structures that service these brands, to be Group-wide.

Group CEO Nick Grayston said the new organisational structure is needed to drive sustainable
profitability and reduce complexity in a rapidly changing retail market.

“Our teams have shared their views on our proposed changes and we can now confirm team
structures. Discussions with team members are ongoing with a view to supporting those who are
impacted through a redeployment process.”

“Once the redeployment process concludes, with appointments made into newly formed roles, we will
be able to confirm the number of people who may leave the business. At this stage, we are
anticipating a net reduction of around 130 roles and we will be doing everything we can to support our
team members during this time.” said Mr Grayston.

It is too early to quantify exact financial impacts to the Group, but estimates are net cost savings to the
Group’s overall annualised costs of doing business of roughly between $15m and $20m which
includes salary savings and reductions in areas such as external provider costs, operational and other
overheads.

One-time restructuring costs are estimated to be between $10m and $13m which will be incurred in
FY17.

Transition to the new structure will occur during the fourth quarter of this financial year (FY17). The
cost reduction impacts will not be realised until FY18.

A further update will be provided as part of our Interim Results briefings on 9 March 2017.

ENDS
Contact details regarding this announcement:
Media: Tanya Henderson on 021 718 953
Investors: Mark Yeoman via Kim Russell: 09 488 3285 or 021 452 860
The Warehouse Group Limited
26 The Warehouse Way
Northcote, Auckland
PO Box 33470 Takapuna
Auckland, New Zealand

phone +64 9 489 7000
fax +64 9 489 7444
web www.twg.co.nz