Noel Leeming bought by The Warehouse

The Warehouse Group has bought the Noel Leeming chain of 92 electronics and appliances stores for $65 million.

"The Warehouse Group believes this acquisition will support its transformation into New Zealand's pre-eminent non-food Retail business and support its ongoing strategy to improve the "Red Sheds" performance," the Warehouse Group said in an announcement to the stock exchange.

"The consumer electronics and home appliance sector has experienced substantial growth over the past five years and as people continue to purchase technology and entertainment products in an increasingly 'connected' world, the sector will continue to grow."

The announcement said Noel Leeming would as a separate trading division with its own "retail brand positioning and personality".

"The Warehouse Group will retain the current Noel Leeming Group management team, who have proven their ability to satisfy customers and deliver growth in a challenging retail environment," said Warehouse Group chief executive Mark Powell.

"We are impressed with the performance of Noel Leeming Group over the past three years with strong management leading a talented team in the specialist consumer electronics and home appliance sector. We believe in the future growth of this retail sector, and are pleased that the current management team have agreed to stay with the business"

The acquisition would be funded through existing debt facilities and was expected to be earnings accretive from the outset, Powell said.

The Warehouse Group was expecting Noel Leeming Group to contribute $4 million to $6 million of earnings to its first half results from the acquisition in December 2012 to January 27 next year.