Subsidy crucial to retaining workforce, Withers says

AUCKLAND: The chairwoman of The Warehouse Group has defended the company’s decisions to claim $67.8 million through the wage subsidy scheme and to lay off hundreds of staff and cut back hours for others.

The group, which owns the Noel Leeming, Torpedo7 and Warehouse Stationery brands, has confirmed a fullyear profit of $44.5 million.

The figure was released last week as a preview to the stock exchange and showed without the subsidy, the company would have made a loss of $4.3 million.

It has been criticised by unions and the Government for restructuring and redundancies while getting the subsidy.

However, Joan Withers said receiving the subsidy was crucial to the group maintaining its workforce during the lockdown, during which employees were paid their full wages.

‘‘On average, the wage subsidy equated to around 55% of our normal wage and salary expense over the period to which the subsidy applied.

‘‘The group has been through two significant restructuring processes which were in place well before Covid19 . . . These changes, although difficult for all involved, were necessary for the group to continue to meet the needs of customers.’’

The restructures cost the company $44.2 million.

Yearonyear retail sales for The Warehouse and Warehouse Stationery stores were flat, although although online and click and collect sales surged.

Sales for Noel Leeming and

Torpedo 7 were up about 10% from the year earlier. They also benefited from an online surge.

On an adjusted basis — the 2020 year included an extra week — group sales were up 1.5%. Online sales rose 55.2% and click and collect sales doubled.

The company said sales for the first nine weeks of the current financial year were up 6% on the same time last year. — RNZ