Grocery group Foodstuffs is selling off its 9 per cent stake in retailer The Warehouse Group, as retail headwinds threaten to push the industry back to ‘normal’ once borders reopen.
The sale will give Foodstuffs a minimum of $101 million – a massive $50 million drop on the price it paid for the shares in 2006, when it attempted to take over The Warehouse Group.
The take over was stopped by the Commerce Commission.
Since exiting a trading halt, put in place to ensure an orderly sale process, shares in the Warehouse Group have fallen 7.4 per cent to $3.38 per security – though remain 80 per cent higher than the same period last year.
According to NZHerald, retail commentator Chris Wilkinson said the decision was prudent, based off ’ knowledge of the retail sector and the belief it has likely hit a trading high already, and is unlikely to grow much further before returning to regular trade.
“Warehouse has bounced back from where it was [financially],” Wilkinson said.
“They will be mindful that the Warehouse continues to face challenges across many of their categories.”