Organisational Structure Change Update

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To: Market Information Services Section
NZX Limited
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Auckland, 8 June 2020

Organisational Structure Change Update
The Warehouse Group (the Group) today confirmed that it has commenced a consultation process at
its Northcote head office as it changes to meet customer needs by shifting to an Agile operating
model.
Group CEO Nick Grayston said that COVID-19 related events of recent months have made it even
more clear that Agile is the right model for the Group and that there is an intention to move to this
new way of working from August 31 2020. The changes that are being proposed at the Group head
office will likely see a reduction of around 100-130 roles.
“We are confident that Agile principles will support the business by improving speed to market,
collaboration, innovation and productivity, enabling us further to increase our focus on serving New
Zealanders’ needs in this uncertain environment,” said Mr Grayston.
“Based on our insights into changing shopping habits and the anticipated economic impacts caused by
COVID-19, we are accelerating some changes that had already been planned.”
“Value for money has never been more important to our customers and in order to continue to
deliver this, we need to manage our costs and run our business more efficiently,” said Mr Grayston.
COVID-19 has also accelerated plans to realign some of our store operations closer to the needs of
our customers and rationalise the distribution of some of our stores.
Last month we opened new The Warehouse and Noel Leeming stores in Lunn Avenue in Auckland and
in the coming months we are looking at six store closures, in addition to three already confirmed,
across Noel Leeming, The Warehouse and Warehouse Stationery brands. We will carry out a full
consultation process but the proposals for change include the Noel Leeming Henderson Clearance
Centre, and Tokoroa store, The Warehouse Whangaparaoa, Johnsonsville and Dunedin Central stores
and Warehouse Stationery Te Awamutu store. We have confirmed that in July we will close our
Birkenhead The Warehouse store and that same month we will open a Noel Leeming Northlink store
in Christchurch, which will replace our Papanui and The Palms stores.
The proposed changes to our footprint consider factors including proximity to our other stores,
shopping habits of those in the area, store profitability and lease arrangements. The Group will
continue to assess its store network and has flexibility in its lease renewal profile with approximately
one quarter of its network coming up for renewal within the next 15 months.

The proposals would see approximately 700-950 roles or 410 fewer full time equivalent store roles as
a result of store closure and operating model changes. That is in addition to the 100-130 Store
Support Office roles. We will be discussing our proposed realignment of our store network and
operating model with impacted team members and the unions.

Trading update

Since moving to Level 2, the Group has seen strong trading across its brands. This level of trading is
seen largely as a consequence of pent up demand and is not expected to continue as the economic
impacts of COVID-19 are realised. Given the continued uncertainty around trading performance the
Board reaffirms its position on withholding guidance on FY20 earnings.
ENDS
Contact details regarding this announcement:

Investors and Analysts: Jonathan Oram, Chief Financial Officer
+64 21 757 415, jonathan.oram@thewarehouse.co.nz

Media: Nick Grayston, Group Chief Executive Officer
To be contacted via Tanya Henderson
+64 21 195 2854, media.enquiries@thewarehouse.co.nz.