Warehouse Group trials retail merger

Under pressure to perform, The Warehouse Group is trialling the idea of folding its Warehouse Stationery arm back into its core Warehouse stores.

The retail group has been trialling having both stores under the same roof at Auckland Airport as a solution to an expired lease, but also to gauge the customer response.

The company said it was early days but feedback had been good, with people using services such as the stationery arm’s copy centre instead of going elsewhere.

Such a move would also mean Warehouse Stationery could stay open for longer, in line with the opening hours of the Warehouse ‘‘Red Sheds’’.

Earlier this year the group posted a weak half-year profit of $13.6 million, down from $57.2m the previous year.

It also sold a prime Warehouse site in Auckland’s Newmarket, and restructured the business, resulting in about 130 job cuts.

Pejman Okhovat, chief executive of both chains, said a great deal of planning had gone into the Auckland Airport trial and it would be tested elsewhere.

However, ‘‘no decision will be made around whether it will be rolled out further for at least another year.’’

Okhovat said the retail environment was changing fast, ‘‘and it is important we continue to evolve’’.

‘‘By testing the concept of two stores under one roof, we can understand whether the additional services and longer opening hours resonate well with our customers.’’

Retail consultant Chris Wilkinson of First Retail Group called the move ‘‘entirely logical’’ as fewer customers visited physical stores.

‘‘It’s a strategic move for the Red Sheds by lifting relevance and driving visitation.’’

The move could also take Warehouse Stationery to provincial areas where it was not currently represented, he said.