ARE WE LOOKING AT NOEL LEEMING'S “SECOND WAVE"?

By Wares October 21, 2016 Industry news

Are we looking at Noel Leeming's “second wave” under TWG? Steve Bohling talked to Tim Edwards.

Noel Leeming’s single most significant store makeover in the last 10 years – by which I mean the revitalised and majorly revamped Moorhouse Avenue store (see photos below) – is important not just for the store itself and for Christchurch but also what it may hold for the rest of the network.

That’s according to Noel Leeming CEO, Tim Edwards by the way, who called the opening “sensational” when we met in August and was clearly chuffed at being able to host June and Vanessa Leeming at the opening, along with along with 300 other locals and VIPs.

In terms of what Moorhouse (coincidentally the closest store to the original Barrington Mall location) holds for the other stores, he says: “What we have tried to do is bring all of our current thinking that we’re trialling all over the country into one location.”

The “largest single store investment in 10 years – possibly ever” shows us greatly reduced promotional material hanging off the ceiling and less manufacturer collateral in the form of stands – both of which you can see happening around the network already.

Instead of using supplier solutions Tim Edwards talks of taking “a Noel Leeming approach” to presenting products. “Our first look at that was the TV comparison walls – there are no brands, it’s ours, it’s what is best for the customer to take them on a journey.”

In terms of decluttering the store, “People are the heroes,” says Tim Edwards. More tills and different locations, a dedicated click & collect and what’s now regarded as a “services hub” covering Tech Solutions and Open Learning deliver a more solutions-based offering, the free consultations helping to “feed the boiler”.

But there is clearly no right or wrong at this stage of store development, and much of what’s being talked about will depend heavily on whether the solutions are site-appropriate. It’s a “work in progress”, in other words

Like getting into drones and smart home products, the 43 year-old retailer isn’t scared to experiment: “We see ourselves as being forward thinking and looking for the next opportunity. Some play out, some don’t but if you don’t have a go, you’re never going to know are you?”

Are we looking at a “second wave”?

Other recent news includes the dropping of the Lifestyle Appliances brand in favour of folding that facility and expertise back under the Noel Leeming umbrella. Interesting through to note that this move was more down to customer feedback – very few customers indeed recalled the Lifestyle brand at the end of the day – rather than some grand new marketing plan.

Those half dozen Lifestyle Appliances sites join the other 23 Built-in Cooking Centres around the country. They will retain their “Lifestyle look & feel” although the word around the traps is that they will soon be working with a reduced number of brands.

Is all this indicative of a “second wave” for the new Noel Leeming since it became part of The Warehouse Group?

Without giving much away, Tim Edwards says there is a two-year programme currently running including new stores – take the Dick Smith site in Takapuna which opens pre-Xmas and the recently opened Tauranga Crossing (see photo below) – and refurbs including the Henderson store.

The size of Noel Leeming’s Gisborne store will also be doubling – thanks to its TWG connections – as it moves to the other end of town to be among the other TWG banners.

With Sylvia Park having proven that Noel Leeming being among the other two TWG banners can “work well and synergistically”, the outlook on colocation however remains “as and when it makes sense”.

Take Kaitaia, which has worked “real well – we wouldn’t be there if we hadn’t partnered with The Warehouse on that site,” says Tim Edwards.

Next up, if my recent trips around the country judging for the Wares Awards are any indication, will be a shift towards more premium products. And, although the latest financials show progress at the top line, the search for margin is ongoing.

The week after we talked, out came Noel Leeming’s FY2016 result showing year-end sales of $752 million, with Gross Profit of $154.6 million, a Gross Margin of 20.6% (pulled down by lower margin products) and an Operating Profit of $12 million (+87%).

Noel Leeming’s Retail Operating Margin was still slim though at 1.6%, against just 1% last year. In comparison The Warehouse and Warehouse Stationery both reported a 5.1% figure and stablemate Torpedo 7 managed 2.3%.

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