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Hunt on in earnest for Warehouse chief executive

By Duncan Bridgeman

Friday 22nd August 2003

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The Warehouse's shares were back up above the $5 mark yesterday as it stepped up its search for a permanent chief executive and prepared for the release of its full-year result next month.

Chairman Keith Smith said the company would begin advertising here and in Australia for a replacement for acting CEO Stephen Tindall during the next 10 days.

Investors were eagerly awaiting an appointment and the result after the company downgraded its annual profit forecast by 20% in May.

The retail chain's shares plummeted to a low of $3.96 following the announcement but have since recovered to more than $5 on the back of strong retail sales since and the management of founder Mr Tindall. At press time yesterday the shares had last traded at $5.09.

The board's preference was for a local person with a retail background although a headhunting recruitment firm had been hired to handle the global search.

Industry insiders were picking Warehouse property director and board member Glen Inger to take over the position, made vacant with the resignation of Greg Muir in May.

Mr Muir's departure coincided with the company downgrading its profit forecast to between $73 million and $80 million.

Sales at the Australian stores ­ dubbed the yellow sheds ­ were up nearly 20% in the June quarter after Mr Tindall initiated an urgent review of business across the Tasman.

Despite the positive signs, investors remain cautious. The shares have failed to break through $5.30, which brokers say is now a key point of resistance.

The shares were trading as high as $7.70 last year.

A key issue to come from the result, due on September 5, is whether the group's margins have been eroded as a result of unloading unwanted stock and by how much.

Recent retail wobbles have led to a number of new initiatives. The Warehouse had already started selling jewellery and there is renewed speculation the grocery market would be its next move.

Meanwhile, fellow retail outlet Farmers Trading this week announced a business venture with Australian jewellery retailer the Prouds/ Pascoes Group and would start selling jewellery within three months.

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