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Bunnings To Permanently Close Seven More New Zealand Stores

Bunnings Manukau New Zealand

Wesfarmers owned Bunnings is proposing the permanent closure of seven of their stores in New Zealand, following the impact of COVID-19.

The stores affected are located in Ashburton, Hornby, Hastings, Cambridge, Rangiora, Te Awamutu and Putaruru and as many as 145 staff will be affected.

This news comes after a announcement in December 2019 that they intended to close three smaller format locations.

The Melbourne based business issued a statement "following a network review and the challenges of the recent trading environment, it has told staff of its proposal to close the stores. Jacqui Coombes, Bunnings NZ director said: "Our absolute priority is the welfare of the 145 affected team members".

The Ashburton Warehouse, the Hornby and Hastings trade centres and four smaller format stores in Cambridge, Rangiora, Te Awamutu and Putaruru are all impacted.

"This news is understandably upsetting and we will be working closely with our team during the consultation period to discuss their individual circumstances, including redeployment to other stores if possible. Despite the incredible efforts of our teams, the challenges at these stores have been exacerbated as a result of the Covid-19 environment and unfortunately these stores are no longer a viable part of our store network."

"Bunnings is an active manager of its portfolio in both the Australian and New Zealand markets which includes new developments and openings as well as reviews such as this which have led to the decisions that have been made," it said.

The closures were connected to the challenges of the recent trading environment but also took into account other considerations including lease arrangements, individual store performance and suitability of location, with some of the stores always intended as temporary locations, it said. "This also follows a review late last year which saw Bunnings close three of its smaller format stores at Te Aroha, Waikanae and Paeroa." Consultation on the closures with staff would begin today. 

The proposed closures follow previous measures to cut the strain from the New Zealand lockdown last month by temporarily reducing salaried staff hours and pay by 20 per cent and working with landlords on rental reductions, Coombes said.

Bunnings has had a torid time of late in New Zealand, having fallen foul of the Commerce Commission who charged Bunnings with 45 pricing offences under the Fair Trading Act.

Read - Court dismissed Bunnings appeal in Lowest Prices Case

Now looking like a pipe-dream, two years ago, Bunnings was aiming to almost double revenue by 2023 and employ a further 1,200 to 1,500 staff.

Australian Toby Lawrance, 46, took over heading the national business from Coombes in August 2017 and said in 2018 that the target was for annual sales revenue to rise from $1.3Bn in the June 30, 2018 year to $2Bn by 2023.

"It's a multi-pronged approach to getting new sites and with smaller regional stores, there's opportunities for upgrades or replacements. Our expansion in the next five years is to gear up. New stores will be in regional and metropolitan areas," said Lawrance, Bunnings NZ general manager. We'll create 1200 to 1500 new jobs over the next five years," he said in April 2018.

Back then, the business had 55 New Zealand stores: 27 Bunnings Warehouse outlets, 20 smaller-format stores and eight trade centres.

Source: Insight DIY & New Zealand Press

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16 May 2020

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