Sports and outdoor gear store Torpedo7 has been sold by The Warehouse Group. Photo: RNZ
The Warehouse Group has sold its struggling outdoor brand Torpedo7 for $1.
The retail giant said the brand would be taken over by retail and hospitality investors Tahua Partners, with the majority of the permanent Torpedo7 team to be offered employment by Tahua.
The Warehouse Group is the country's biggest retail company, owning well-known brands including its red sheds, stationery and Noel Leeming.
The company said the sale of Torpedo7 would result in a non-cash, pre-tax accounting write-down ranging between $55 million and $65m in its half-year results, subject to audit and final review.
Tahua's owners include former Breakers owners Paul and Liz Blackwell.
Torpedo7 has struggled in recent months, with sales down more than 25 percent in the first quarter.
The Warehouse Group chief executive Nick Grayston said Torpedo7 only represented 5 percent of its group sales.
"The tough reality is that our attention and resources are better spent strengthening our core The Warehouse, Warehouse Stationery and Noel Leeming retail brands," he 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."
Grayston said Torpedo7 faced ongoing challenges to its performance.
"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," he said.
Tahua Partners said it was "delighted" to add Torpedo7 to its business.
The Auckland-based company operated a diverse portfolio of retail and hospitality brands, including Starbucks, Hannah's Shoes, Burger King and Number One shoes.
"As a 100 percent 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," a spokesperson said.
The sale is expected to be completed by the end of March 2024.