By Duncan Bridgeman
Friday 28th November 2003
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Queensland-based Super Cheap Auto is opening seven stores in New Zealand tomorrow as part of a major transtasman expansion plan that could see the company operating up to 25 stores here.
Mr Pritchard said the new entrant was well flagged and Repco would be watching its development with interest.
"We won't be reacting until we understand exactly what they are doing here," he said.
"We understand that their CEO has been through our stores, which is reasonably flattering, so it will be interesting to see what he's going to do."
The increased competition comes little more than a week after Repco listed on the New Zealand and Australian stock exchanges with the issue of 152.8 million shares at $A2.65 a share.
After dipping to a low of $NZ2.70, Repco shares have since bounced back on the NZX. At press time they last traded up 10c at $2.87.
Super Cheap Auto managing director Bob Thorn said the expansion into New Zealand was part of a plan to have a transtasman chain of 225 stores by the end of 2005.
The company operates 150 stores and generates annual turnover of $A275 million.
Mr Thorn said the long-term strategy was to operate 25 stores in New Zealand, although that would depend on results.
The company kickstarted its expansion by buying the Marlows and Rocca Brothers auto-parts chain, which consists of 20 stores in Western Australia, Victoria and South Australia.
Mr Thorn said the company had invested more than $6 million in New Zealand. The first stores would open in Highland Park, Albany and Mt Wellington in Auckland, Rotorua, Hastings, Tauranga and Napier.
Repco's listing prospectus shows the auto parts and accessories industry is worth $A4.8 billion a year in Australia and $900 million a year in New Zealand.
Repco's pro forma forecast 2004 revenue of $A786 million will give it 14%, or two-and-a-half times the size of the next biggest competitor in either country, according to management estimates.
The company has 91 outlets in New Zealand and 322 in Australia, compared with Super Cheap's 150.
Mr Pritchard said he was aware of his rival's exploits in Australia and the main thrust of its marketing. "They are coming and we are well aware of how they sell and what they do across the Tasman."
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