Ezibuy uneasy fit for Woolworths
Woolworths Australia is selling its New Zealand-based Ezibuy clothing business as part of a major reshuffle.
Ezibuy is a Palmerston North success story and the city mayor is confident it will stay in the region.
Woolworths has sold it to Sydney-based investment firm Acleon Group for an undisclosed amount, just four years after buying the retailer for $350 million.
Spearhead Manawatu director Craig Nash said it and Smith have worked with Woolworths over the past six months to help smooth the way for the transition.
The pair were still organising a meeting with Alceon, but neither thought the new owners were likely to make big changes straight away.
Nash, who works to attract businesses to the region, believed the new owners would undoubtedly see the Palmerston North employees as a big asset.
‘‘[It’s a] large and loyal workforce in Palmerston North that has been a huge part of the businesses success over [the past 39 years].’’
Smith was confident Ezibuy would remain in the city for the same reasons the previous owners kept it there – low overheads and Palmerston North’s position as a distribution hub.
And from the city council’s perspective, Alceon, which owns similar retail brands Noni B, Queenspark and Pretty Girl Fashion Group, seemed like a good fit for the region, he said.
‘‘They’ve had considerable success growing [those brands] and we hope they can do the same here, with Ezibuy.’’
In a statement, Woolworths said it decided to offload Ezibuy in the middle of last year as it began a $1 billion reorganisation. The reshuffle slashed 500 jobs and closed dozens of underperforming stores.
Ezibuy was founded by Peter and Gerard Gillespie in 1978. Since then, it has grown from a single black-and-white A3 flyer into Australasia’s largest fashion and homeware store.
But, in a strategic review prompted by July’s reorganisation,
Woolworths found the company did not fit well with the rest of its business.
At that time, chief executive Brad Banducci said Ezibuy operated in challenging times. Ezibuy lost $15m in 2016, on sales of $163m.
Some of the challenges were driven by exchange rate changes, particularly between Australia and New Zealand, and also, between the United States dollar and the NZ dollar, he said.
‘‘It’s a terrific brand and great brand franchise, in particular in New Zealand.
‘‘We’ve come to realise... we’re not the natural owners of the business.’’