Woolworths sells The Warehouse stake, abandons NZ expansion plans
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Woolworths has abandoned plans to enter the discount department store sector in New Zealand and has sold its 8.8 percent stake in New Zealand retailer The Warehouse Group for NZD86.9 million (USD65.5m), less than half the price it paid eight years ago.
Woolworths said on Tuesday it had sold 30.5 million shares in The Warehouse Group for NZD2.85 a share – a slight premium to the market price of NZD2.72 – to one of New Zealand’s largest retailers, the privately held James Pascoe Group.
Woolworths said The Warehouse investment was no longer required as part of its New Zealand strategy and confirmed that it had given up on its original plan to use the stake as a platform to enter the discount department store sector and replicate its BIG W business.
Questions & Answers
Q.Why did Woolworths sell its stake in The Warehouse Group?
Why did Woolworths sell its stake in The Warehouse Group?
Woolworths stated that the investment was no longer necessary for its New Zealand strategy and confirmed it had abandoned plans to use the stake for entering the discount department store sector there.
Q.Which company bought Woolworths' stake in The Warehouse Group?
Which company bought Woolworths' stake in The Warehouse Group?
The shares were sold to the James Pascoe Group, a privately held company described as one of New Zealand’s largest retailers.
Q.Did Woolworths make a profit on this investment?
Did Woolworths make a profit on this investment?
No, Woolworths sold its stake for less than half the price it originally paid eight years ago, indicating a significant loss on the investment.
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