Reject Shop opens new DC near Brisbane

Reject Shop opens new $16 million DC near Brisbane to service 90 northern-state stores

By Rob McKay | June 22, 2010

The Reject Shop opened its $16 million Queensland distribution centre officially today after more than three years of planning and development.

Located in Walker Corp’s 335ha Citiswich Industrial Estate near Ipswich, the facility covers 26,600sqm.

The Reject Shop took out a 10-year lease with Walker Corp in 2008 and the facility, near the intersection of Brisbane Road and the Warrego and Cunningham highways, was handed over in February.

It will service 90 northern-state stores initially but has capacity for 200.

Described by Managing Director Chris Bryce as a "cornerstone of our future growth in this state", it is part of the Reject Shop’s strategy to build its Queensland presence from 24 to more than one hundred stores.

It will also service stores in NSW.

The DC, which is expected to reduce an unquantified amount in freight costs, complements the Reject Shop’s Melbourne Airport DC which opened in 2006.

"Ipswich was the logical location for our new Distribution Centre because of strong labour market and strategic location on road networks," Bryce said in a statement.

The Reject Shop has 196 stores at present in all regions bar the Northern Territory and plans to expand that to about 400.

Its February half-yearly results showed the company’s intention to significantly build its shop portfolio over the long term, with Tasmania leading the way, rising from one to 25.

It was a similar story in other states, with Western Australia (14 to 30), NSW and the ACT (74 to 129) and Victoria (60 to 100) destined to outstrip South Australia’s modest projected growth of 20 to 25.

After trailing the market last year, listed Reject Shop shares have surged ahead since February, when the company recorded a 21.7 percent rise in net profit in the first half to $18.9m.

Its capital expenditure is expected to rise from $13.2m to last financial year to an expected $32.8m this financial year before easing to $31.2m and 28.7m in following years.

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