Outdoor brand Torpedo7 has been sold to Tahua Partners Limited for $1, The Warehouse Group has announced.
Tahua Partners will take ownership of Torpedo7's assets, including stock, cash in store and the Torpedo7 brand.
It will assume its obligations, including in respect of leases and honouring gift cards, online orders, and customers returns.
A spokesperson for The Warehouse Group said the "majority" of the permanent Torpedo7 team will be offered employment by Tahua Partners.
The Warehouse Group expects that the sale will result in a non-cash, pre-tax accounting write-down ranging between $55 million-$65 million in its FY24 half year income statement. This is subject to audit and final review.
The Warehouse Group chief executive officer Nick Grayston said: "While this sale will impact our FY24 Half Year result significantly, we expect that the net cash impact (post tax) of the sale will be close to zero."
"Importantly, the sale of Torpedo7 will allow us to focus on our core brands and improve the Group's financial performance."
"Torpedo7 represents only 5% of our Group sales, and the tough reality is that our attention and resources are better spent strengthening our core The Warehouse, Warehouse Stationery and Noel Leeming retail brands.
"Torpedo7 has faced ongoing challenges to its performance recently. Lower consumer demand post-Covid, driven in part by a global decline in the bike market, has impacted sales and profitability. We've decided it's time to draw a line under it and we have found an owner who can focus more attention to its turnaround.
"The sale of Torpedo7 is one of the steps we're taking as part of our strategic reprioritisation to narrow and simplify our focus on improving our performance and delivering better value to shareholders and customers. Other initiatives include managing gross profit margin, reducing our cost base and rebalancing capital expenditure."
Grayston said it's bittersweet to see Torpedo7 go, but he was pleased that it would continue to serve Kiwi customers who want to get out and enjoy outdoor adventures, with another New Zealand retailer at its helm.
A Tahua Partners spokesperson said they were delighted to welcome Torpedo7 into their business.
"As a 100% Kiwi owned and operated business with a passion for retail and hospitality, we believe Torpedo7 complements our family of well-loved global and local brands."
The sale is expected to be completed by the end of March 2024. When the transaction is completed, The Warehouse Group will update the NZX.
The Warehouse Group will release its FY24 interim results on March 20.
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