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Warehouse unfazed by low kiwi dollar

By Phil Boeyen, ShareChat Business News Editor

Friday 25th August 2000

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The Warehouse is reassuring investors - and customers - who are worried about the effects the low kiwi dollar may have on the price of the company's products.

The discount retailer says it operates a foreign exchange hedging and on average has six months of forward cover in place at any one time.

It says it is comfortable that the currency policy is delivering sufficient exchange rate certainty for the business to be able to react to adverse movements in the NZ dollar.

As an example The Warehouse says in the 1998 financial year the New Zealand dollar experienced a significant fall from 64c at the end of July 1997 to 51c in July 1998. In that year the company says a combination of renegotiating buy prices and better product sourcing meant it was able to hold prices and produce a 14% increase in net profit.

The company says if the kiwi dollar continues to stay around current levels or go lower, it is confident that it is well placed to vigorously compete with other retailers and continue to deliver bargains for customers.

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