Warehouse Group buys online retailer

The Warehouse Group, which reports its first-half profit this week, will spend up to $33 million buying online retailer Torpedo7, but brokers say the physical presence of the large retailer will not diminish.

Late last year, The Warehouse bought consumer electronics chain Noel Leeming Group, which includes Bond and Bond. The country's biggest listed retailer will pay $20 million upon settlement, and up to a further $13 million over the next three years if targets are met, for a 51% stake in Torpedo7, it said in a statement. The online retailer operated the Torpedo7, 1-day and Urban Daddy websites across Australia, and would continue to operate as a stand-alone business.

''The strategic partnership created by the purchase of a majority shareholding in Torpedo7 Ltd is another example of our continued focus on the expansion of our multichannel business, enabling us to offer customers a retail experience when, how and where they want it across a broader range of products,'' chairman Graham Evans said.

Craigs Investment Partners broker Chris Timms said the online presence of The Warehouse Group was always a question at investment briefings.

The purchase of Torpedo7 would allow it to strengthen its online offerings. However, Mr Timms forecast that the number of Red and Blue Sheds would continue to grow, as that was the important part of the brand.

The group had lifted the quality of its goods and that was also likely to continue.

''The Warehouse retains an unrivalled store footprint that is difficult to replicate.''

The Torpedo7 purchase was expected to settle next month. The Warehouse was expected to report on Friday.

Add a Comment