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Pacific Retail picks up homeware chain

By Ben Dutton

Monday 2nd October 2000

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Pacific Retail Group has hit the acquisition trail with the purchase of Auckland homeware and gift retailer Living and Giving.

The acquisition was based on an enterprise value of $4.4 million. After taking into account payment for liabilities the total purchase value is an up-front payment of $2 million with another payment of $3.1 million in one year's time.

Stefan Preston, executive director of Pacific Retail, said that the Living and Giving acquisition is a tentative step outside its traditional appliance retailing business.

"Homeware and gifts is an underserved segment in New Zealand. We expect to use Living and Giving as a platform to build a significant position in the category over time," Mr Preston said.

Living and Giving is not selling goods on the Internet at the moment and Mr Preston says that any future online presence will certainly not be a centrepiece of strategy. "We want to sell in the stores," he said.

Investors shouldn't expect a significant positive impact on Pacific Retail's short-term earnings either. Living and Giving has a turnover of only $10.7 million compared to sales of over $360 million in its Noel Leeming, Bond & Bond, Computer City and Pacific Retail Finance brands.

Mr Preston said that the small scale of the present asset together with the work required in its assimilation and growth will temper short-term returns.

It is likely that Pacific Retail will be looking at expanding the chain of six stores which are presently only based in Auckland and Hamilton.

Pacific Retail's shares were not traded after the news and remained at the market price of $1.45.

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