Mitre 10 head office loss narrows to $11.18m as cloud spend reaches $250m

Mitre 10 chief executive Lindsay Rowles is feeling optimistic about the summer trading period ahead. Photo / Mitre 10

Mitre 10’s head office has narrowed its losses for the third straight year, but its IT-related costs have ballooned to $250 million.

The company reported a loss after tax of $11.18m for the year ended June 30, 2026, down from $27.13m in 2025 and $98m in 2024.

target=”_self” rel=”” title=”https://www.businessdesk.co.nz/companies/retail/flash-and-find-mitre-10-lights-the-way-for-shoppers/XSQ2BR3WQVOSBOJIBQ6BJ6QFQQ/”>Mitre 10 New Zealand Ltd operates as a cost centre providing centralised services to the individually owned stores across the country.

The company’s financial results released today said revenue rose by 8% year on year to $324.5m.

Chief executive Lindsay Rowles emphasised that the group is focused on supporting the retailers’ customers by providing “great ranges, prices, and great strong store execution”.

“We’ve done a lot of work on making sure that we lower our costs as retailers do. So yes, our costs haven’t gone down overall. That’s important, but certainly we’ve shortened the loss by a significant amount.”

IT upgrade

The report said the group expensed $19.99m on cloud software this year, up from $18.2m the previous year, while only nine of the 87 stores currently run on SAP.

The retailer has been rolling out cloud-based SAP ERP (Enterprise Resource Planning) software since 2019.

The total spend was “circa $250m to date”, Rowles said, “That’s part of a wide range of initiatives … But as a programme, that was the number that has been invested today”.

Rowles said he didn’t have a deadline for when he wanted the other stores to live on that SAP.

“Many businesses take very long periods of time to roll these types of software changes out, and it would only be the wrong thing if you didn’t get the right experience for your team and for your customers.”

The companies’ report said this expenditure “has led to the Group generating losses for several years and negative operating cash flows”, and that the group relies on its debt facility to finance operations.

The report also noted that the group relies on the debt facility to finance its ongoing operations, and that the financial statements were prepared on a going concern basis with no material uncertainties.

Cost management

Rowles said the group has benefited from stronger retail and trade performance as well as the contributions its members make to fund strategic and infrastructure investments.

“In terms of costs and cost management, you know, as a retailer we have to manage that constantly, good times and bad.”

He said the support centre company did not have a goal of making a profit and instead focused on the long-term growth of the business.

“We’re working through strategy at the moment. I’m less concerned about whether this part of the entity is profitable or not. It is a support function. It’s not a profit centre per se.

“These large infrastructure investments are required to be a successful retailer. So, whilst you would like the balance sheet to always be strengthening, and that is certainly the agenda, it always starts with customer and store.”

Services and levies to members grew by 19% to $80.9m, against 5% growth in sales of goods, the report said.

“For independent owner-operators, the strength of the co-operative is the ability to access these systems and processes that, as independent operators, they might not be able to access. So they’re very much aware that those things are significant and have a cost. And it’s our job to make them as beneficial and strengthen those locally operated businesses.”

Rowles said customers’ needs and expectations are “changing faster than ever”, with digital shopping options being a large part of that.

“I think the most notable thing is there are more touchpoints for a customer to engage with your business.”

Outlook

Despite a challenging operating environment amid cost pressures affecting households, businesses and the construction industry, Rowles said the group is optimistic. “The stores are in great shape, and customers are responding to them really well.”

He said the group’s focus on the customer and following trends “is paying off, and we’re looking forward to a really strong summer trading season”.

“Performance is strong, and we’re seeing customers get engaged with the range, and there’s some great innovations in colours and trends, particularly in outdoor furniture over summer.”

When asked whether the introduction of Ikea to the New Zealand market almost a year ago has had any impact on Mitre 10, Rowles said, “From my perspective, the team are doing their job.

“I’m really excited about any good global competitors entering this market; it’s a fantastic opportunity for New Zealand as a whole. What comes with that is Kiwis who love their homes just get more engaged in our category and segment.

“The way we look at it is, you know, somebody buys an article, they engage with their space in their room. They buy a lamp or a light fitting, they paint the room, and they just engage in that space in an enthusiastic way.

“That’s an opportunity for everybody in the segment in the industry.”

Rowles noted a key part of Mitre 10’s co-operative model is having stores across New Zealand, locally owned and operated.

“It’s an important part of our story that we are in those communities. We are serving them with product that isn’t always necessarily easy to ship around the countryside.”

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