AUCKLAND: New Zealand retailer The Warehouse appears to be weathering the country's worst recession in decades.
The discount department store – which sells a range of products including clothing, footwear and homewares, having recently exited the food and liquor sector - claims it is poised to further fine tune its operations after a "solid" half year result to December 31 2008.
A statement released to the New Zealand stock exchange today confirmed while sales were down 2.9 per cent on the previous half to $NZ 923.5 million, operating profit was up slightly by 1.1 per cent to NZ$84.2 million. Earnings before interest, taxes, depreciation and amortisation (EBITDA) were NZ$104.6 million, compared to NZ$102.5 million, and operating cash flow was up 51.2 per cent to NZ$97.8 million.
The result reflected "a strong trading plan supported by investment in direct sourcing and inventory management initiatives," the statement said.
Highlights of the period included cost and inventory reduction initiatives and the proactive reinforcement of price leadership in advertising and in-store communication. Stores had also adjusted space allocations and product presentation to respond to consumer needs.
The Warehouse had prepared itself for a tough period ahead, the statement concluded.
"Macro-environmental factors point to a sustained downturn in economic activity, resulting in low consumer confident and high employment risk. General retail spending is expected to remain under pressure for some time."