TWG Trading Update

Please note that we have updated our previous announcements. See below for our most recent statement as of 26 March.

The Warehouse Group (“the Group”) would like to provide an update in relation to Tuesday’s uncertainty around its designation as an essential service under the government’s Level 4 COVID-19, and what that entails.

The Warehouse Group operates the brands The Warehouse, Warehouse Stationery, Noel Leeming, Torpedo7, 1-day and TheMarket, with 258 stores across New Zealand.

On Tuesday night the Government provided official clarification to The Warehouse Group that The Warehouse (Red Sheds) did not constitute an essential service as part of the Level 4 business closure plan.

Therefore, from Thursday 26 March, all the Group’s stores, distribution and online fulfilment centres are closed for four weeks, as per the Level 4 COVID-19 Government approach.

Group CEO Nick Grayston said “we were in contact with Government for some time and on Tuesday morning, when we confirmed The Warehouse (Red Sheds) would be open, we did so in good faith on the basis of the information we had been given from credible sources, and our strong belief, supported by legal advice, that Red Sheds met the criteria of being an essential service, based on the Government definition of “any entity involved in the supply, delivery, distribution and sale of food, beverage and other key consumer goods essential for maintaining the wellbeing of people.”

Mr Grayston said “with the information we had to hand we understood that our significant grocery, toiletries, cleaning, warmth essentials for winter needs and our national coverage meant that we were expected to trade. In addition, at the time of the announcement we were working with our 12,000 team members and suppliers, who were understandably very keen to receive definitive answers around our status as a business.”

“On Tuesday further conversations with various Government representatives were undertaken and we established that further clarity was needed and a trading halt was put in place as we sought more information. Later into the evening on Tuesday and well after the trading halt announcement, we heard for the first time the Government’s direction that the Red Sheds should be closed,” said Mr Grayston.

Nick Grayston said he completely supports the need to do everything possible to keep all New Zealanders safe.

“With 12,000 employees at home, our attention will now turn to supporting them in a range of ways and we will focus on that in the coming days.”

DIVIDEND AND GUIDANCE

Considering the circumstances and uncertainty around the impact of COVID-19, the Board of the Group has decided that it is in the best interest of the company to cancel the interim dividend for H1 FY20 of 10 cents, which was due to have been paid on 17 April 2020. The Board is also withdrawing the financial guidance on the FY20 result which was given on 17 March.

24th March secondary update:

The Warehouse Group Limited (“Warehouse Group”) has agreed with the NZX to place the ordinary shares (“WHS”) and the bonds (“WHS020”) of the Group in trading halt. There is considerable uncertainty around what meets the definition of essential businesses and which products and services they are able to provide. The Warehouse Group is in discussions with government on what categories within The Warehouse will be available post escalation to COVID-19 Alert Level 4. The Group will make an announcement when there is better definition of this, and will then request the trading halt is lifted. It is expected that this will be by tomorrow morning.

24th March Update:

The Warehouse Group (“the Group”) would like to provide an update in relation to COVID-19 (“coronavirus”) and its potential impact on its business operations. The Warehouse Group operates the brands The Warehouse, Warehouse Stationery, Noel Leeming, Torpedo 7, 1-day and TheMarket, with 258 stores across New Zealand.

The 92 stores of The Warehouse will remain open for business for Kiwis during the Government sanctioned Level 4 COVID-19 isolation period. The Warehouse is a provider of key consumer goods essential for maintaining the wellbeing of people such as food and beverage, groceries, cleaning items, health and beauty items including toiletries, winter essentials e.g. blankets, clothing and heaters and stationery and office supplies for home schooling and work-from-home needs.

Online stores across all of our brands (not only The Warehouse) and our distribution and fulfilment centres, will also continue to operate to provide contactless delivery to those at home and to essential businesses.

At this stage it is more important than ever that we live up to our purpose of helping Kiwis live better every day by making sure that we show up for our communities in the way that they need. In the past two weeks the Group has seen unprecedented demand for essential items across all our brands. Goods sold included essential items to prepare themselves for the mandatory isolation period of at least four weeks.

In our response as a business to COVID-19, our primary priority is the safety of team members and our customers and we have put in place measures to keep our people safe, including new protocols in stores, additional cleaning and additional leave and wellbeing support. We are working with New Zealand’s two major supermarkets to submit to government personal protection equipment requirements and supply for our people. Customers in store will be asked to adhere to new protocols including social distancing and limiting purchasing, in some cases, to two items per product.

We will continue to evolve our protection protocols for our team members and we are well aware that as one of the largest New Zealand employers, with 12,000 employees, the Group’s ability to keep its Warehouse brand and Group fulfilment centres open, not only helps customers with key essentials but it goes some way to ensuring the sustainability of the business for communities, customers and stakeholders.

The Warehouse Group want to particularly acknowledge the hard work of its team at this difficult time.