Telecom to sell off retail stores

By Deborah Hill Cone

Friday 23rd July 2004

Telecom is following a recommendation from former Warehouse CEO Greg Muir to jettison much of its retail business.

But the telco is at pains to emphasise any deal will be at arm's length after details of an earlier asset sale, the disposal of its mobile radio business to TeamTalk, a company linked to Telecom director Patsy Reddy, were kept secret.

Telecom is selling off its network of 15 business-orientated stores to "revitalise its retail presence," Telecom general manager of corporate affairs Philip King said.

An anonymous source contacted NBR claiming the stores may be flicked off to a Telecom insider but Mr King said this was not the case.

One Telecom manager, who had since left the company, had expressed an interest in buying them but any party would have go to through the process, which was being handled by investment bank First NZ Capital.

"It would be inappropriate to favour an internal party without soliciting offers from all parties, which we have done ... but it's not inappropriate to say they were interested."

The decision to sell was made following a six-month review of Telecom's retail operations by Mr Muir, who has since moved on to run childrenswear retailer Pumpkin Patch. The asset sale is part of a broader change in distribution which involves a shakeup of Telecom's network of outlets.

Before the review Telecom had 39 stores; it has since closed six, opened six and several have been moved. It has 25 consumer stores, which have been rebranded with a new Telecom look and which will stay with the company.

The 15 stores (13 bricks and mortar and two "virtual") being sold are aimed at small- to medium-sized business but serve consumers too.

The idea of having a retail shopfront to sell fixed-line phone products has changed with the introduction of broadband a product which consumers benefit from seeing in action rather than signing up for over the phone.

Comments from our readers

No comments yet