Chief executive appointment delays KMart deal

Friday 24th August 2001

By Nick Stride

KMart New Zealand owner Coles Myer has put off until September finalisation of a deal to sell its local outlets to The Warehouse and Farmers.

Incoming Coles chief executive John Fletcher takes over from Dennis Eck on September 10. Sources close to the company said the final decision has been put on hold until Mr Fletcher gets his feet under the desk.

The deal involves selling nine of KMart's 12 stores to The Warehouse and two to Farmers.

One store, on which the lease has expired, will be closed.

KMart New Zealand managing director David Goodman referred inquiries to Coles' head office where a spokeswoman declined to comment.

KMart staff said contract talks with the National Distribution Union had been suspended, routine store managers' meetings had been delayed until later in September, the announcement of Kmart's "staff member of the year" had also been postponed and no management vacancies had been filled for two months.

It is understood the deal will see Coles subsidise The Warehouse's lease costs on the nine stores for the five to eight years left to run.

The stores are all in malls, with leases at around $230/sq m compared with The Warehouse's average of $110.

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