As sales surge, The Warehouse upgrades ERP to support growth across brands

As sales surge, The Warehouse upgrades ERP to support growth across brands

Noel Leeming outperforms as The Warehouse goes all-in with Oracle E-business suite.

Nick Grayston (The Warehouse Group)

Nick Grayston (The Warehouse Group)

Credit: The Warehouse Group

The Warehouse Group outlined its technology investment plans today while reporting a bumper $3.4 billion of sales, up 7.6 per cent.

Adjusted net profit after tax was $175.5 million – up from $32.1 million after excluding unusual items including the $67.6m wage subsidy repayment and $16.1m of restructuring expenses.

Chair Joan Withers said the performance allowed the group to pay a special dividend of 5 cents per share in February 2021, an interim dividend of 13 cents a share in April and a final dividend of 17.5 cents per share, bringing total dividends for the year to 35.5 cents per share, or 70.2 per cent of adjusted net profit.

Noel Leeming outperformed with sales up 11.7 per cent driven by double digit growth across appliances, audio visual and technology.

CEO Nick Grayston said the results had given the team further confidence that The Warehouse's customer-led strategy was the right one. 

"We are seeing the benefits of our transformation programme and we are part way through significant digital investment to improve legacy systems and set ourselves up to give our teams and customers an even better experience," he said.

During the year the group introduced a new mobile-first e-commerce platform with The Warehouse the first brand to be migrated and other brands following in 2022. 

The change will make mobile apps and websites easier to use for customers, while providing for greater performance and innovation from The Warehouse team. 

"This investment allowed us to be able to pivot quickly to the requirement to trade essentials and non-essentials in split lockdown levels within the current restrictions," Grayston reported. 

“We are in the process of upgrading our enterprise resource planning system for finance and inventory which will further enable the ability for our customers to shop seamlessly across our brands and channels.”

The group had operated a number of businesses that used different ERP systems and processes. 

Noel Leeming, which The Warehouse bought in 2012, was still using software from JD Edwards, now also part of Oracle, as well as custom-built systems.

Torpedo 7 and The Market (the group’s latest online play) were running on “home-grown” systems, group CIO Edwin Gear told NBR.

Last year, the group signaled about $100 million would be spent over the next 2.5 years to see the company’s fragmented technology landscape standardised onto Oracle’s cloud software at the back end with Salesforce’s commerce cloud at the front.

“It’s probably the biggest technology transformation we’ve undertaken, certainly since the last enterprise resource planning investment, which is by now probably 12 or 13 years old,” Gear, told NBR.

The company has started its migration from Oracle E-Business Suite to Oracle SaaS including Oracle Cloud ERP and EPM together with inventory modules from Oracle's retail vertical.

The transformation goal is to provide an end-to-end operational platform of systems and common processes through which the brands can accelerate their competitive differentiation.

A modern, single platform, unified data model and real-time inventory were must-haves to improve back office efficiency and the customer experience, especially as online sales surged during the pandemic.

The group modernisation, which was is expected to be completed in the early 2023 financial year, would drive efficiency and common processes, supported by a technology stack that enabled migration from batch processing to real-time financial operations.

"Over the next three years we will enhance our master data management, build and deploy enterprise management systems which tie together a multitude of business processes and enable the flow of data between them," Grayston said. 

"We will also optimise our supply chain systems and processes to include providing more options to flex between speed and cost of online fulfilment options for our customers."

During the year a focus on inventory management enabled the group to drive a reduction in aged inventory from 28.1 per cent in 2020 to 16.1 per cent.

Online shopping continued to grow with sales of $393.1 million, up 5 per cent on last year and accounting for 11.5 per cent of total group sales.

2021 capital expenditure at the group was $85 million, lower than initially budgeted, but higher than the average last three years of $65 million.

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Tags retaile-commercenoel leemingthe Warehouse groupERP enterprise resource planning



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