Head office, IT jobs to be restructured at Warehouse Group in bid to cut costs

Monday, 17 November 2025

Sales at The Warehouse Group are improving - up 0.9% to $674 million in the first 13 weeks of the new financial year - but to ensure a return to profitability, it is looking to outsource areas of its business.

A “comprehensive cost reset” programme, to deliver on its plan to reduce the cost of doing business to below 31% of sales, is under way, and would see changes to its head office structure and more IT outsourcing.

There are few details that can be publicly shared at present, but the programme was a critical step in helping restore the company’s profitability and positioning the group for sustainable growth, said new group chief executive Mark Stirton.

“Our shareholders rightly expect decisive action, and that is exactly what we must deliver,” Stirton said.

Asked what jobs and departments the cost-out measures would impact, the company said it was proposing changes to its “head office structure” to help ensure its operating model was “sustainable and competitive in a tough retail environment”.

“These are difficult decisions, and we do not take proposed changes that impact our people lightly. We know the effect this has on our team and their families, especially in the current economy, and we are committed to supporting our people through the upcoming consultation and change processes with care and respect over the coming months.

The Warehouse was entering a consultation process with its teams and it was not able to confirm any further details at this stage.

Stirton said more broadly, the group was looking to expand its partnership with India-based IT and digital conglomerate Tata Consultancy Services, a company that does a range of outsourced functions for companies. In September, The Warehouse partnered with Tata to “support managed services transformation” and simplify the group’s technology stack.

The partnership was designed to lower costs by removing remaining legacy systems, consolidate platforms, and maximising value from existing technology investments.

At the time, Stirton said the partnership was expected to reduce costs in licences and managed services by up to $40m over five years.

Trading update

In the first quarter trading update, the owner of The Warehouse, Warehouse Stationery and Noel Leeming, said despite a challenging retail environment and a sluggish economy marked by low confidence and high unemployment, it was able to deliver positive sales growth across all brands.

The Warehouse sales rose 0.7% to $389m, Warehouse Stationery sales grew 2.6% to $52.2m, and Noel Leeming sales rose 0.7% to $230.7m.

“Sales revenue and units sold are up, which is an encouraging sign. However, we’re not yet seeing the scale of full price home and apparel sales needed to materially improve margin performance at The Warehouse,” Stirton said.

“A warmer winter led to slower sell-through, resulting in increased clearance activity, which also impacted the value perception of our new spring home and apparel ranges.”

Stirton said gross profit margin at The Warehouse chain remained under pressure.

“There are encouraging signs our new product ranges and in-store experience are resonating with customers. Trading conditions remain challenging, and we are doubling down on our efforts to improve gross profit margins and reduce cost of doing business in order to help improve profitability.”