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Warehouse to sell Newmarket property

NZN 17/04/2017 Rebecca Howard

Warehouse Group has entered into an unconditional contract to sell its property in Auckland's Newmarket for $65 million and will vacate the store in 2018.

Settlement is expected to be completed in July 2017 and the sale proceeds of $65 million will generate a pre-tax gain of about $12 million, the Auckland-based company said in a release to the stock exchange.

Further details will be provided when it announces its full-year result on September 22.

The site will continue to be leased and operated by Warehouse until it is to be vacated in October 2018.

In March, Warehouse posted a 76 per cent drop in first-half profit to $13.6 million after the retailer took an impairment charge against its financial services unit, recognised restructuring costs and earned less from its Red Shed department stores.

The retailer is on a cost-cutting drive, cutting a net 130 jobs at its store support offices in Auckland and some regional centres, as it moves to group-wide support systems.

The shares last traded at $2.22 and have dropped 22 per cent so far this year.

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