The Warehouse Group (TWG) has sold the popular outdoor brand Torpedo7 for $1.
In a statement on Thursday, TWG revealed they sold the business to Tahua Partners Limited to allow them to focus on their "core brands".
"Tahua Partners Limited will take ownership of Torpedo7's assets, including stock, cash in store and the Torpedo7 brand, and will assume its obligations, including in respect of leases and honouring gift cards, online orders, and customer returns," the statement read.
"The majority of the permanent Torpedo7 team will be offered employment by Tahua Partners Limited."
TWG expects the sale will result in a non-cash, pre-tax accounting write-down ranging between $55 million - $65m in the FY24 Half Year Income Statement. This is subject to audit and final review.
"While this sale will impact our FY24 Half Year result significantly, we expect that the net cash impact (post tax) of the sale will be close to zero," CEO Nick Grayston said.
The sale will allow TWG to focus on "core brands" and "improve" financial performance.
He said the brand represented just five percent of their Group sales.
"The tough reality is that our attention and resources are better spent strengthening our core The Warehouse, Warehouse Stationery and Noel Leeming retail brands," Grayston explained.
He admitted the brand has faced ongoing challenges to its performance recently.
"Lower consumer demand post-Covid, driven in part by a global decline in the bike market, has impacted sales and profitability," he said.
"We've decided it's time to draw a line under it and we have found an owner who can focus more attention to its turnaround."
The brand stocks both affordable and quality outdoor and sports equipment. According to its website it has 18 stores nationwide.
Grayston said the sale is just one step they are taking in a "strategic reprioritisation" to narrow and simplify their focus on improving performance and delivering better value to shareholders and customers.
"Other initiatives include managing gross profit margin, reducing our cost base and rebalancing capital expenditure," he said.
Grayston acknowledged "it's bittersweet to see Torpedo7 go" but said he is pleased that it would continue to serve Kiwi customers who enjoy outdoor adventures.
A Tahua Partners Limited spokesperson said they were delighted to welcome Torpedo7 into their business.
"As a 100 percent Kiwi owned and operated business with a passion for retail and hospitality, we believe Torpedo7 complements our family of well-loved global and local brands," they said on Tuesday.
The sale is expected to be completed by the end of March 2024.
