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
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.