The Warehouse plans: Dunedin to become 'dark store', three others to close, 900 jobs lost

Monday, 20 July 2020

The Warehouse Group has confirmed the closure of three stores. A fourth, in Dunedin, will become an online fulfilment centre or “dark” store.

Dunedin’s central city The Warehouse is likely to close to the public and become a “dark store”, used only for online order fulfilment.

The retail giant is working through consultations with its staff on a planned restructure that would result in the loss of more than 900 jobs.

In June, the company said it was starting a consultation process looking at the closures of the Noel Leeming Henderson Clearance Centre and Tokoroa store, The Warehouse Whangaparāoa, Johnsonville (Wellington) and Dunedin central stores and Warehouse Stationery Te Awamutu.

It is understood the retailer plans to close the Whangaparāoa store in January, the Johnsonville store at the end of August, the Warehouse Stationery in Te Awamutu in mid-October and the Dunedin The Warehouse store is planned to close to the public in August..

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The store closures will affect 137 roles.

The Warehouse is also closing its Birkenhead The Warehouse store in Auckland, affecting about 40 jobs.

Staff at Noel Leeming Henderson Clearance Centre said they were told the store would close July 26.

One woman, who did not want to be named, said the closure of the Henderson store was devastating for her family. Her husband worked 42 hours at the store and could not be deployed to other locations because of the distance.

“They had already made the decision before they consulted the staff. Did they take into account us? Not really,” she said.

The Warehouse Group has been approached for comment to confirm the fate of the Noel Leeming stores.

Online fulfilment centres, or “dark stores” as they are sometimes called, are becoming increasingly common. Countdown opened its first New Zealand dark store this year.

Retail commentator Chris Wilkinson, of First Retail Group, said it was reflective of the wider retail environment, in which big chains were looking to reduce costs and concentrate consumers into fewer destinations.

That was a recognition of changes in shopper behaviour and the expectation that economic conditions would be restrained in the months and years to come, he said.

“We are seeing this across most retailers at the moment as the sector looks to de-risk and strip overheads.

“We also need to be mindful that The Warehouse’s store network that we know now, was largely established before the Kmart’s renaissance and growth, Briscoes’ strengthened ownership of the homeware category and continued ‘creep’ of the likes of Mitre10 Mega and others, into categories that were once the mainstay of The Warehouse in the bulk retail and discount realm.

“The other mainstay, apparel, has been impacted by online and dominant fashion-fashion brands, such as Cotton On and Postie, which have strong value propositions and representation,” Wilkinson said.

“The Warehouse will be mindful of Amazon’s continued Infrastructure growth in Australia, where a new Queensland warehouse was announced recently.

“While the brand hasn’t had a major impact on that market yet, it’s building capacity and understanding. Longer term, it’s likely they will become dominant players in Australasia and have a similar effect to what has happened in the US and UK,” he said.