The acquisition of Noel Leeming and Torpedo7 has helped the Warehouse Group, New Zealand’s biggest listed retailer, boost first-quarter sales by 51 per cent.

Group sales rose to $NZ569.8 million ($A506.67 million) in the three months ended October 27, from $NZ377.3m a year earlier, before it bought Noel Leeming and Torpoedo7, the company said in a statement on Friday.

Sales growth in the Red Sheds unit, Warehouse’s biggest, didn’t translate into gross profit gains as CD, DVD and book sales declined and the stores went through major product range overhauls.

“The quarter has seen continued investment in our businesses and accelerated investment in new activities,” chairman Graeme Evans said.

“While we have seen positive sales results in our retail businesses in the quarter, we are incurring start-up costs as a result of all of these activities,” he said.

Mr Evans and fellow director Janine Smith will retire from Warehouse’s board at this year’s annual meeting as the retailer continues its transformation program under chief executive Mark Powell.

It is navigating through a tough retail environment and recovering some of its lost lustre after abandoning forays into grocery and Australia under its previous management.

The flagship Red Sheds unit lifted sales 8.8 per cent to $NZ354.5m in the quarter from a year earlier.

The Blue Sheds stationery unit, which has been the group’s strongest performer in recent years, boosted sales 10 per cent to $NZ56.9m, with same-store sales up 6.1 per cent.

The Noel Leeming unit contributed first-quarter sales of $NZ139.2m and Torpedo7 $NZ19.2m.

Noel Leeming increased its sales 12 per cent and same-store sales were up 6.1 per cent from the same period a year earlier, before Warehouse acquired the business.

BusinessDesk