Forum Archive Index - August 2001

["Malcolm Cameron" <malharcameron@hotmail.com>]

Jerrold
imho australian stores will be behind the eight ball for a number of years 
because stock mix and reliability of supply of good advertised lines is 
scarce. stores on average are to small and australian mananagment have the 
idea that customers will come no matter how you treat them or what they 
stock.
malcolm



>From: jerrold poh <pohj@ihug.co.nz>
>Reply-To: sharechat@sharechat.co.nz
>To: sharechat@sharechat.co.nz
>Subject: Re: [sharechat] Warehouse from Forbes.com (2)
>Date: Mon, 13 Aug 2001 15:53:27 +1200
>
>Thanks for the article DR ...  even though it did feel like the author
>was brown nosing Tindall there abit :).
>
>The side by side comparison was good in the first post and really did
>put some perspective on just how well this little company tucked away in
>New Zealand is doing, which has actually motivated me enough to do some
>research on it :).
>
>It is the opportune time, (well, I reckon anyway), what with the general
>impression that the expansion isn't doing too well in Australia, and
>the current down trend it's in (correct me if I'm wrong Phaedrus?).
>
>Has anyone have any other thoughts on this company (actually quite
>surprised they weren't many replies to this email)?
>
>
>Jerrold.
>
>
>
>On Fri, Aug 10, 2001 at 07:13:44AM +1200, DR wrote:
> > The Warehouse Group was started by Stephen Tindall in 1982 with $30,000 
>in capital, one small store and three full-time employees. In fewer than 20 
>years, Tindall has turned the Warehouse Group into the country's largest 
>retailer, with 40% of the $1.7 billion spent annually in department stores 
>on nonfood items. "It's an understatement to say that Tindall changed the 
>face of retailing in the country," says Clyde D'Souza, an analyst with 
>Salomon Smith Barney in Auckland.
> >
> > Tindall's method was to develop a local version of the low-cost, 
>category-killing megastores built by Costco, Wal-Mart and Carrefour. 
>Designed to look like warehouses, the chain's 75 outlets, whose exterior 
>walls are painted bright red, are typically huge stores in suburban areas. 
>Inside, one finds aisle after aisle of cheap stuff piled high: tennis shoes 
>at $6.30 a pair, boxes of lawn fertilizer for a dollar, nail polish at 84 
>cents a bottle. "If you go into any small town in the country, the biggest 
>store there is probably us," says Tindall.
> >
> > And he is just warming up. Last year, he invaded Australia, whose 
>economy is six times the size of New Zealand's. He spent $54 million buying 
>a smaller competitor there; operated under the Solly's and Clints brand 
>names, it will be rebranded to become a bridgehead in Australia. To 
>supplement growth in New Zealand, Tindall is starting to sell telecom and 
>financial services and may add electricity sales as well. All told, Tindall 
>expects to increase sales by 2.5 times within five years.
> >
> > Can he pull it off? "It won't be an easy road, but I think Tindall and 
>his team can do it," says Karen Wilson, an analyst with J.P. Morgan in 
>Auckland. To bring in fresh blood, Tindall kicked himself upstairs last 
>year, taking the title of founder and appointing a new CEO, Greg Muir, who 
>had been with the company since 1999 and had helped run other Australasian 
>blue chips, such as TNT and Lion Nathan.
> >
> > Tindall's record speaks for itself. If you had been smart enough to buy 
>a thousand shares of Warehouse Group when it listed on the Auckland 
>exchange in 1994, your $1,050 investment would have compounded at about 27% 
>a year and would now be worth $5,670.
> >
> > Tindall, 50, has retailing in his blood. His great-grandfather founded 
>what used to be the country's largest retailer, George Courts. His father 
>was also a retailer, importing hand tools and other hardware. After 
>graduating from high school, Stephen Tindall went onto an executive track 
>at George Courts, winning the retailer award of the year at the age of 27. 
>All the signs pointed to his one day taking the reins of the company.
> >
> > But he had other ideas. "I always yearned to do my own thing," says 
>Tindall, who stays in shape by swimming two and a half kilometers every 
>day. During a sales visit he made to New York City in the spring of 1982, a 
>client invited him to see a factory outlet (i.e., discount) store in 
>suburban New Jersey. Tindall saw his opportunity. In October that year he 
>quit his job, at age 31, and launched his first Warehouse store a month 
>later.
> >
> > It was a store unlike any other in the country. The concept of 
>dirt-cheap goods was revolutionary for New Zealand. Tindall pioneered other 
>concepts. He was the first to computerize his sales and inventory data, 
>plowing $20,000 of his $30,000 in startup capital into two NCR cash 
>registers that recorded sales data on magnetic tape, which he printed out 
>once a week. At George Courts, inventory was taken only once a year, 
>manually. "I was suddenly 52 times better in knowing how I was doing," says 
>Tindall with a chuckle. Today, the Warehouse Group continues to be 
>technologically advanced: As early as 1998 the company started to build an 
>intranet/internet system and launched a data warehousing project.
> >
> > Perhaps Tindall's boldest move was to aggressively take advantage of 
>lower tariffs on imports during the wave of privatization and deregulation 
>in the 1980s. "I was probably the first to start importing when they lifted 
>the restrictions," says Tindall. By doing so, he could enjoy fat margins 
>and still undercut domestically produced goods. He once imported 120,000 
>coffee cups from France, pricing them at 71 cents when similar mugs sold 
>for $1.25 elsewhere. The cups sold out in three days. "It was just, 
>whoosh!" Tindall exclaims. Cutting costs even further, Warehouse buys 
>directly from suppliers around the world, thus eliminating middlemen.
> >
> > One of the secrets of Warehouse's success has been Tindall himself. "He 
>has managed to go from being an entrepreneur to running a complex 
>organization," says D'Souza. "Others couldn't take it to the next level." 
>Tindall's success attracted about half a dozen imitators, who have all come 
>and gone. "They weren't reinvesting in the business. They didn't worry 
>about technology. And they didn't understand what being a shopkeeper is all 
>about," says Tindall
> > D.
> >
>
>
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