Welcome to The Warehouse Supplier Newsletter Our newsletter and website provide information for our local and international suppliers relating to trading with The Warehouse February 2016

Strong first half sets up expectations for year-on-year profit growth

The Board of The Warehouse Group on 11th Jan 2016 advised that the Adjusted Net Profit After Tax (NPAT) for the Group for the first half year of Financial Year 2016 (FY16) ending on 31 January 2016 is expected to be between $43m and $45m, which is 15%-21% higher than the same period last year. Strong first half sales and profit performances have been recorded across The Warehouse Group for all its brands (i.e. The Warehouse, Warehouse Stationery, Noel Leeming and Torpedo7). The ongoing execution of the Group’s strategy has resulted in both sales and margin growth, with improved seasonal management and strong Christmas trading. There has also been good cost control as the business moves past the strategic cycle of investment catch-up undertaken over the last four years. This retail profit growth has been somewhat tempered at a Group level by the previously anticipated start-up losses in the new financial services business, which will continue until it establishes scale.

As he looks to hand over to Nick Grayston, outgoing Group CEO Mark Powell said, “This strong performance continues the positive momentum developed in the second half of last year, with the Group’s strategic initiatives starting to yield the profit growth required now that we’ve completed the necessary investment catch-up.” Chairman Ted van Arkel said, “Full year profit guidance will be given at What’s inside? the release of the half year results on 11 March 2016. We now expect Atrium Store Opening.....pages 2 & 3 Pre-price Labels……………………page 4 that Full year profit to be up on last year, although not to the same Golf Day………………………pages 5 & 6 Salvation Army Aspire………….page 7 extent as these first half results, given potential risks around the impact Global Container Law …….pages 8-9 of foreign exchange movement on margin, the impact of the 53rd week DIFOT……....………………………page 10 Electronic Trading………………page 11 in FY15, and that financial services is in a lossmaking establishment Want to know more?...... page 12 phase of its business.”

Page 1 New Atrium Store – Now Open Matt Hadley, Head of Retail Environment, gives us the lowdown on the new Atrium Store in Elliot Street, ….

The new Atrium store opened on the 28th January 2016 in Auckland CBD. This store will replace our current Downtown store which closes in May as the Downtown centre will be knocked down and rebuilt.

The store is located in the Atrium centre in Elliot Street, right behind Smith and Caughey. A number of vacant units in the centre were removed to make way for our store which is only 1800 sqm gross and thus is our smallest store in the estate.

Atrium store is probably one of our most challenging to date, with two floor levels and a very low ceiling. The back-of-house and access to loading is very small and narrow, and shared with other tenancies, and therefore is one of our most logistically difficult store to fit out. With all of this, we were unable to deliver our standard Big Box store and so the look is very different to our core stores - even checkouts had to be specifically designed to suit the store layout and amount of columns!

Furthermore, although there is parking in the centre, large high cube products would be very difficult to get into and out of the store and so this led to some decisions we had to take on the overall ranging of the store. Being a CBD small store, we have focussed our range on the urban dweller and office worker, so the store is only ranged for:

• Menswear & Womenswear (no children’s clothing) • Home Mobile Phones • Tech accessories • Celebrations and Consumables • Jewellery

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Page 2 Atrium Story continued from Page 2….

This is the first time we have taken such a step in the ranging (or non-ranging ) of a store and we will be monitoring the success, customer feedback and other KPIs over the next 12 months to assess whether we have got this right.

From an internal look, we have also rethought how we present the brand here to the customer. With a low, black ceiling we wanted to ensure all signage and customer communication was as light as possible, so there is a minimal amount of red being used - and we are trialling a few new elements, and extending the use of our Clothing Concept signage across the store. So far the feedback has been positive!

Yet again we were challenged during the fit out - most of the time the team were working in darkness and floodlights as power and lighting were being installed - but as ever everyone just got on with it and delivered a great looking store on opening (with power and lights!). Thank you to all of our suppliers who worked with us on quite challenging timelines to deliver this project, particularly GETC, GDM and Retail Dimensions who managed to get all the fixtures and fittings in on time and Rilees who did a fantastic job on a rather interesting external signage proposition. Thanks to everyone else who supported the team from our electricians and flooring to all the merchandise suppliers - as ever your help is greatly appreciated.

If you’d like to visit our New Atrium Store, we’d love to see you, and would love to know what you think! We are open everyday from 8am-8pm

Atrium Store 21 Elliot Street Auckland, AUC 1010 Matt Hadley - Tel: 09 213 0002 Head of Retail Environment

Page 3 Pre-pricing Labels – Reminder

In 2014 we reviewed where we were at with Pre-pricing, and found a wide variety of sizes, colours and fonts being used across the business. There were unclear guidelines, it was difficult for stores, and sending a confusing message to our customers. In June 2015 we confirmed which categories were to be pre-priced or shelf-edge labelled (SEL), and launched a new design of pre-price labels. If your Category Manager requests for products to be pre-priced, then products ordered should arrive pre-priced into our business using labels from Checkpoint Systems. We have a Pre-pricing Label Guidelines document available to Suppliers on our Supplier web page, which outlines the label types available for use and guidelines on how to use them. Please contact your Category Manager if you have any questions.

Just a reminder that our nominated and approved label supplier is Checkpoint Systems Co Ltd. Checkpoint is based in Shanghai and has a number of local support offices throughout China. We have recently confirmed a Checkpoint partner in so that our local suppliers can also now print labels via our nominated supplier. All orders for pre-price stickers for New Zealand suppliers go via the Checkpoint website as normal and will be shipped from New Zealand.

Although we have made some fantastic progress with our pre-price labels (thank you), there is still a way to go, and we continue to get feedback from stores and customers that: • Customers don’t know the price of products. • Price stickers not peeling off – causing pain for stores and customers • Inconsistent look and quality of labels not professional

Please ensure you and your factories are using our nominated supplier Checkpoint for ALL pre-price labels to ensure they meet our standards. All the label types, guidelines and contacts can be found on our supplier website under Packaging & Labelling, or by clicking here

Page 4 The Bob Tindall Classic Golf Tournament

The Bob Tindall Classic is the opportunity to bring the Group’s suppliers (both trade and non-trade) together to enjoy a day's golf and also to support the company's chosen charity. It will be held on Thursday 17th March 2016 at the Muriwai Golf Club http://www.muriwaigolfclub.co.nz/

Who is this year's charity partner?

CanTeen believes that no 13-24 year old should ever fight cancer alone. They are there for 13-24 year olds at every stage of their cancer journey, whether they're dealing with their own cancer, an immediate family member diagnosed with cancer, or the death of an immediate family member from cancer.

CanTeen support every step of the way, through counselling and individual assistance, as well as peer support programmes, leadership and educational support and services to help them thrive in life after cancer. CanTeen also gives young people a voice to speak out on issues that affect them and to advocate for better survival outcomes for adolescents in New Zealand. All services are provided free of charge and are funded by generous individuals and community partners.

This year, CanTeen have committed to extending their membership to an important group of young people who have until now been left to cope on their own. These are young people struggling with a parent’s cancer diagnosis – CanTeen calls them ‘Offspring’.

Participants in a CanTeen pilot ‘Offspring’ study showed that a parent’s cancer can derail a child’s life, leading them to suicidal thoughts, abusing alcohol and drugs, having issues with the police and problems with learning. CanTeen is committed to walking alongside these young New Zealanders, helping them deal with their new-found challenges and supporting them to thrive in life. They are able to achieve this through funds raised in conjunction with The Warehouse Group as we partner with them for the 2016 Golf Day.

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Page 5 The Bob Tindall Classic Golf Tournament -Story continued from Page 4…

How can you help?

It would be great to see as many of our suppliers as possible participating on the day.

If suppliers cannot attend you may wish to consider supplying an auction item, team prize (we would require six items the same), a raffle prize or perhaps you may like to sponsor a hole.

For further details please contact Kim Russell on extn 96725 or [email protected]

Suppliers can register online to play from early February. An email with the link will be sent shortly.

Format of the day

The format will be Ambrose (6 players per team, 2 teams per tee) and the field is limited to 216 people. The event commences at 8.00am with BBQ bacon sandwiches. Tee off will be 9.30am.

Golfers return to the club house around 4.00pm where they are served refreshments before the prize giving, auction, raffle draw and cheque presentation.

This is a great opportunity for networking and socialising with our the TWL team and fellow suppliers and of course to support CanTeen.

Who can attend and play on the day?

As many of our Suppliers as possible! (field limit 216) Members of the Group Executive Team and Company Directors have also been invited to play. Suppliers can also choose to pay for and invite any manager/buyer/team member from The Warehouse Group to play in their team.

Thank you for your support....together we will make this event a great success!

Page 6 Special Thank-you for Gala Dinner donations and fundraising

Many of our suppliers were incredibly generous in supporting our community partner, The Salvation Army, at our 2014 Gala Dinner. Funds raised went to support their “Aspire” programme. The programme is aimed at young people who need a bit of support and structure to enable them to move forward in life and make the most of the opportunities they have. In December’s newsletter we included a link to a youtube video with an update. There is another further update that we’d like to share with you here on just what a difference your generosity has made.

Please click here for the link to the latest video update

Thanks again for all your generosity.

Page 7 FOB Suppliers -SOLAS (Safety of Life At Sea) Global Law Change Regarding Container Weights

From 1st July 2016, all shippers of packed containers will be required to provide and verify a container’s Gross Verified Container Weight to the Ocean Carrier and Port Terminal representative at origin prior to it being loaded onto a ship. A Verified Container Weight will become a global legal condition for loading a packed container aboard a vessel for export. The Vessel and Terminal Operators are required to use Verified Container Weights for the purpose of vessel stowage plans, and are prohibited from loading a packed container aboard a vessel for export, if the container does not have a Gross Verified Container Weight lodged.

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Page 8 FOB Suppliers -SOLAS (Safety of Life At Sea) Global Law Change Regarding Container Weights

Story continued from Page 8… In terms of Imports into New Zealand, the legal obligation lies with your overseas suppliers who are subject to the laws of the country that your container(s) originate from.

The SOLAS regulations will prescribe two methods by which the shipper may obtain the Gross Verified Container Weight of a packed container:

Method 1 Upon the conclusion of packing and sealing a container and using calibrated and certified equipment, the shipper may weigh, or arrange for a third party to weigh, the packed container. The scale, weighbridge, lifting equipment or other devices used to verify the Gross Verified Container Weight must meet the applicable accuracy standards and requirements of the country of origin.

Method 2 The shipper (or, by arrangement of the shipper, a third party) may weigh all packages and cargo items, including the mass of pallets, dunnage and other packing and securing material to be packed in the container, and add the tare mass of the container to the sum of the single masses on the container’s contents. The weighing equipment used to weigh the contents of the container must meet the applicable accuracy standards and requirements of the country of origin. The tare mass of the particular container is visible on the exterior of the container and should be used. Estimating the weight of a container’s contents will not be permitted.

Any questions please contact your local Kuehne+Nagel office click here for details

Page 9 Auto Reorder – FID – DIFOT (Deliveries in Full, on Time)

Top 5 FID Large Supplier Results

Congratulations to IFP Group for taking out the top slot with 98.4% DIFOT, followed very closely by Whittakers 98.2%.

Each month we will update the leader boards. How will YOU make the Top 5?

To request DIFOT / OLTUA or Trend reports, please contact Marian Filippini on [email protected] or [email protected]

Page 10 Auto Reorder – FID – DIFOT (Deliveries in Full, on Time)

Top 5 FID Medium to Small Supplier Results Huge Congratulations to Aegis Oil who make it onto the leader-board for the first time and take out the top slot with 100% DIFOT – well done and Thank you! Also well done to Raven Products with 99.3% availability.

Each month we will update the leader boards. How will YOU make the Top 5?

To request DIFOT / OLTUA or Trend reports please contact Marian Filippini on [email protected] or [email protected]

Page 11 Local Supplier? Electronic Trading! Now is the time to do it, and guess what? It is very low cost! Thank you to all the suppliers who have made contact with us and made this a priority. We are now trading 75% of all our invoices electronically!

No more paper invoices!

Hurry! We expect all ordering and invoicing with local suppliers (FID & FIS orders) to be conducted Electronically. We recognise that full EDI doesn’t suit all suppliers, so we have developed two electronic trading options to make sure we can cater to all suppliers:  Full EDI: Suits larger suppliers, or smaller suppliers with frequent, complex multi-store/multi product orders.  Electronic Trading Portal: Suits smaller suppliers or those with relatively non-complex orders.

”Electronic trading through the portal is very low cost – all that is required is a relatively recent Internet browser such as Internet Explorer 9 or higher, or a similar browser such as Chrome or Firefox”.

It is important that if you are not already trading electronically with us to get the process started sooner rather than later in order to ensure you are on board by the deadline.

Contact our friendly EDI team immediately at [email protected] to get the ball rolling.

Page 12 Want to know more?

Visit us on http://www.thewarehouse.co.nz/red/catalog/suppliers Becoming a New Supplier Click here for more information Supplier 'Ways of Working' sessions Click here Got a Suggestion? Click here Want to get more involved? Click here Register your email address Click here

Your feedback is important to us!

If you have further suggestions in terms of content and communication you would like to see here, please email [email protected] and tell us your view.

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