EziBuy moves distribution jobs to Brisbane

Fashion and homewares multichannel retail giant EziBuy will move more than half of its distribution business from New Zealand to Brisbane, chopping dozens of jobs from its warehouse near Palmerston North’s airport.

But executive director Richard Facioni said the pain would be short term, as the company planned to boost its New Zealand sales of other brands, including a relaunched Pumpkin Patch, with New Zealand sales to be handled through Palmerston North.

Facioni said the move to supply its Australian customers from Queensland in early 2019 would avoid paying the extra 10 per cent in tax recently imposed on goods imported from New Zealand.

‘‘Slightly more than half of our customers are in Australia, and we have to make commercial decisions.’’

Facioni said a number of staff members would be affected, but the company was trying to minimise the impact of the changes.

Some of the 107 distribution centre staff were taking up offers to move to Brisbane, and others would take redundancy. The Palmerston North-based call centre and retail stores would not be affected.

‘‘The call centre is a jewel of an asset, and if anything we want to grow that – to double or triple it.’’

EziBuy recently opened a new store in Tauranga, and intended to create more stores and make them bigger. Facioni said EziBuy’s owner, Sydney-based investment firm Alceon Group, for which he was an executive director, wanted to keep its base in New Zealand and to make it bigger.

He said EziBuy’s New Zealand heritage and culture were strengths for the business.

The decision to move product for Australian customers from an Australian base was a commercial one, and no reflection on the ease of distributing from Palmerston North to markets in both countries.

‘‘It’s a good facility, well located, and that’s not the issue. It’s the costs.’’

The SurfStitch distribution centre in Brisbane was being extended to cope with the extra product, and was expected to be ready next year.

A New Zealand SurfStitch website was launched recently, and orders were expected to grow quickly and take up some of the extra capacity at the Palmerston North distribution centre.

Alceon had bought Pumpkin Patch, which would be relaunched into New Zealand and also serviced out of Palmerston North.

Palmerston North mayor Grant Smith said the city council and business attraction and retention agency Spearhead had been kept informed about Alceon’s plans.

He said the company had stabilised the EziBuy business, and was taking steps to ensure it had a future.

Smith said he understood why it no longer made economic sense to distribute to Australian customers from New Zealand.

But with a lease on the warehouse until 2026, Alceon had a strong incentive to fill it up with other distribution work.

Ezibuy was set up in Palmerston North in 1978 by brothers Peter and Gerard Gillespie.

The distribution centre, the size of nine rugby fields, was opened in 2006, and while EziBuy’s head office moved to Auckland in 2007, most of the business remained based in Palmerston North.

Woolworths bought EziBuy for $350 million in 2013, at which stage it employed about 800 people, then sold to Alceon in 2017.

Facioni said Alceon had returned the business to profitability and intended to continue making it stronger.