The Warehouse Group [WHS.NZ] has been in the news over the last week, with a Court of Appeal case being heard over its possible future ownership. This saga has been going on for nearly two years now.That aside, my history of share ownership with this company goes back to 2000 when I first bought a small holding and stupidly sold them on September 11 2001. I then bought more in 2002 and have added to my holding since then.
The main reason I bought this share was that I spent an awful lot of money buying stuff there and noticed lots of other people doing the same. Not a good reason to buy a share, on its own but there are other reasons as well.
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The Warehouse and its dominant position in the market made my decision to buy even clearer. I cant ignore the fact that the company is the largest seller of various products on the New Zealand retail landscape: Music, books and gardening items are among the categories it kills.
This dominance has been impossible for other retailers to chip away at over the company's 25 year history and its low cost business model: goods straight into the store, with "just in time" delivery and sophisticated logistics make it hard for other retailers to compete on price.
It owes alot of its success to the company it is modeled on, Walmart, and apart from an awful execution of an expansion into Australia in 2000 management have been good managers of the business.
Like the other companies in this series, The Warehouse runs a business that is easy to understand and being a rather simple fellow myself that appeals to my investing genes.
The question I always ask, would I buy this share today? The answer would have to be a resounding yes. I am slightly put out that Woolworths or Foodstuffs would want to buy my shares off me because as my readers would know, I like to hold for the long term.
Being part of a larger group or on its own as a publicly listed company The Warehouse look likely to continue to dominate the New Zealand retailing scene.
The Warehouse Group @ Share Investor
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The Warehouse Financial Data
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