A New Zealand retail group has agreed to offload its financial services business, which includes car, house, travel, and health insurance, to an SBS Bank subsidiary.
The Warehouse’s financial services business – branded Warehouse Money – will be acquired by Finance Now for $18 million, in a deal the retailer said will likely result in a $16 million impairment to its annual results which will be released on September 22.
The retailer said people who take out insurance from The Warehouse or have a Visa card issued by the company shouldn’t see any immediate changes from this recent development, and the company will continue to sell its products under its own brand in its stores.
The Warehouse chief executive Nick Grayson said that while the company had been pleased with the data the business had provided, the sale, for which documentation will be finalised over the next five weeks, is aimed at taking the risk off its balance sheet,
Fairfax Media reported.
In a statement to the NZX, The Warehouse said the sale would let The Warehouse focus on more urgent things, such as “fixing our retail fundamentals and investing in our digital future.”
The Warehouse boss said the retailer would continue to offer its existing services under the Warehouse Money brand and that he was not aware of any planned changes at this point.
Diners Club New Zealand would not be part of the sale, the company said in a statement to the NZX.
“Final details are yet to be confirmed, however the purchase price of $18 million, subject to asset-based adjustments, is expected to result in a non-cash impairment of software assets of approximately $16 million in the 2017 financial results,” it said.
The company said it will release more details once the deal has been finalised.
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