How The Warehouse is zhuzhing up its product offering

Wednesday, 23 October 2024

The Warehouse says it has put in the work to develop trendy and enticing products. The next few months will be crucial for the retailer to see if it can enjoy the fruits of its efforts after years of declining sales.

After a tumultuous trading performance in recent times, The Warehouse is hopeful a range of more colourful and youthful products will provide better competition to rival Kmart and lift profits.

The retailer has spent the best part of the year developing what it calls ‘cheaper and trendier’ products it hopes will entice shoppers to part with their money and win back business. That includes trying to appeal to a younger demographic.

The Warehouse Group’s sales fell 6.2% to $3 billion in the year to July 28, down from $3.24b a year prior.

Meanwhile, it plunged to a $54.2 million loss.

Chair Joan Withers and acting chief executive John Journee were pensive about its performance last month, and admitted the company got its strategy wrong.

Withers called The Warehouse’s financial performance “one of the most challenging” in the retail company’s 42-year history.

Journee admitted the group “took our eye off the ball on product”.

The Warehouse is now in a battle of survival to regain market share lost to the likes of Kmart and growing online giant Temu.

Tania Benyon, chief product officer at The Warehouse, has been leading the crusade for revamping the red shed’s product offering since February.

Its buying teams have been bulked up and given more freedom to design and buy goods more akin to what can be found at competing Kmart stores.

Benyon said shoppers would notice an overhaul in The Warehouse’s clothing and apparel and home ranges in new season summer stock hitting shelves in the coming weeks.

Tania Benyon, chief product officer at The Warehouse, says shoppers can expect a lot more trendy goods from the retailer.

She said there were thousands of “fresher” and more “in trend” goods expected to be released over the next few months.

“We’ve added more buyers to our team, and that's been important to give us the capacity to expand from being good at basic things that everyone needs, and then layer on top of that more interesting product, and I think that's where you'll see the difference,” Benyon told The Post.

“There’s a lot more colour and you'll see pops of retro-looking product. We've got new ranges landing in the next few weeks, including Poppi, our teen-focused health and beauty range, which we just couldn't do before. We’ve been working to change how the business invests to be able to build out our product ranges.”

The Warehouse says 17 of it stores have set up a teen-focused health and beauty counter.

More buyers joined The Warehouse in June, and Benyon said the revamp of the ranges would showcase the retailer’s “change in direction”.

'In apparel, shoppers will see things like sets, ribbed active wear, cute bubble skirts, there's some great new footwear that’s a bit more contemporary. In the home space, there's a lot of fun occasional pieces and new dinnerware that's in lovely colours and shapes.”

Benyon said The Warehouse’s product transformation journey had been “intense” thus far. Part of that included sourcing product that would appeal to a trendy demographic of shoppers, including young mums and teens.

The Warehouse in Albany is going from red to pink to celebrate Barbie's 65th birthday

“Revamping ranges from the bottom up takes a lot of effort. The product team has been travelling where we can to get inspiration. We've had to work really closely with our sourcing team and supplier partners to bring it all together ‒ it's been a significant amount of work to reset the ranges.”

Benyon said she was confident that the new contemporary products, inspired by what was on shelves in Europe and the US, would translate into more and better sales for The Warehouse.

“The great thing is that we're off season from the rest of the world, so we can see what trends are coming through, before the season.”

Analysts have long said the Warehouse’s poor financial performance in recent years has been down to having the wrong products that weren’t resonating with customers, and in turn having to discount heavily to try to move that stock.

Juanita Neville-Te Rito, managing director of RX Group, said revamping the product offering was a step in the right direction, but it only addressed a symptom, not the core problem for The Warehouse.

“The Warehouse is ripe for a leader with vision and hands-on retail expertise, someone who intimately understands the customer base and their evolving needs. The retailer appears to have lost touch with its core customers, necessitating a holistic approach starting with cultural transformation and clear, inspiring leadership,” Neville-Te Rito said of what was needed for the retailer to turnaround the business.

“The Warehouse was once synonymous with brilliant everyday essentials and 'Wow' product excitement that made customers think, 'I have to pop in today.' That magic has faded. To truly regain market share, the focus must return to core strengths, and an engaging shopping experience across channels.

“Customers have options, and they gravitate toward retailers that deliver compelling, relevant experiences — something The Warehouse currently struggles to offer. However, recent initiatives like the Barbie campaign signal a step in the right direction, particularly in key categories like toys. But lasting success will require consistent, aligned efforts to rebuild trust, re-establish brand promise, and drive sustainable growth.”