Stephen Tindall, Adamantem Capital eye The Warehouse Group

It is understood Stephen Tindall wanted to pivot The Warehouse towards becoming a third player in the NZ supermarket industry. Picture: Bloomberg

Private equity firm Adamantem Capital Partners is understood to have been working behind the scenes on a possible buyout of one of New Zealand’s most iconic companies, The Warehouse Group.

DataRoom understands Adamantem, founded by former Pacific Equity Partners executives Anthony Kerwick and Rob Koczkar, has been assessing the move with Stephen Tindall, who started The Warehouse in 1982 and remains a major shareholder. Tindall and the Tindall Foundation own more than 50 per cent of the business.

It is understood Tindall wanted to pivot The Warehouse towards becoming a third player in the NZ supermarket industry. Woolworths, with Countdown supermarkets, is one of the two major grocery companies, rivalling Foodstuffs, which owns Pak n Save, New World and Four Square.

There are concerns about the stranglehold the major players have on the NZ industry. The government launched a grocery code of conduct last year.

The plan to sell more groceries through The Warehouse comes at a time when NZ is in recession and the cost of living has risen sharply.

Taking on the grocery chains has been a long-held ambition of Tindall. In 2006, he made a similar effort to privatise The Warehouse through a $1.6bn bid funded by PEP.

Tindall wanted to extend its product offering from general retail into grocery and fresh food, threatening the dominance of Woolworths and Foodstuffs. However, Foodstuffs and Woolworths each took 10 per cent blocking stakes in The Warehouse and he abandoned the bid.

Known as The Red Shed, The Warehouse has become one of NZ’s most iconic retailers. Tindall’s son Robert serves as a director on the board.

The shares were worth more than $NZ7 in 2007 but now trade at around $1, with its market value at $NZ365m ($328m).

For the 2023 financial year, The Warehouse generated $NZ29.8m in adjusted net profit, down from $NZ89.3m in the previous year, and it has $NZ48.1m net debt.

The group already sells some grocery items, contributing to 18.7 per cent of its revenue.

The company in the past financial year had 246 stores, including 88 The Warehouse stores, 66 Warehouse Stationery stores, 67 Noel Leeming stores and 25 stores of Torpedo7, which it sold earlier this year for $NZ1 following poor performance.

DataRoom earlier reported that Adamantem is in divestment mode. Its NZ smallgoods business Hellers is for sale through Luminis Partners, while its laundries business Linen Services Australia has been shopped around for the past year.

Other assets in its portfolio include NZ-based Heritage Lifecare, Hygain Holdings, Zenitas community health and Boost Juice owner Retail Zoo.