Mighty Ape has shut the Christchurch distribution centre it opened less than three years ago, and its revenue has fallen by almost a third, according to full year results released to the Australian sharemarket on Monday by its owner Kogan.com.
The Kogan Group told the ASX on 24 August that Mighty Ape turned over A$85.6 million in revenue in the year to 30 June 2026, down 30 per cent on the year before. Gross sales, which count the full value of goods sold through its marketplace as well as its own stock, fell 14 per cent to A$118.1 million. Gross profit dropped 23 per cent to A$26.1 million. On the company’s preferred measure of underlying earnings, Mighty Ape lost A$3.3 million over the year, and its statutory bottom line was a loss of A$5.1 million.
Buried in a list of cost-cutting measures was the line that will sting most in Canterbury. Operations have ceased at the Christchurch warehouse. The 5,500 square metre building near Christchurch Airport opened on 27 November 2023 and was the company’s first distribution hub outside Auckland. At the time chief executive Gracie MacKinlay said the point of it was to give the South Island the kind of service the North Island already had. “I think South Island customers haven’t got the same level of experience for ordering online for a long time and we want to change that,” she said. Morning orders from Christchurch were meant to arrive that afternoon.
Kogan did not say how many people lost their jobs when the warehouse stopped operating, and it did not put a figure on the savings. What it did say is that the closure, along with a range reset and a restructure it calls a One Global Team model, cut Mighty Ape’s fixed costs from A$4.9 million a quarter in the first three months of the financial year to A$3.4 million a quarter in the last three. Stock on hand went from about A$21 million to about A$10 million.
That is the argument the company is making. The revenue fall was not an accident, it was the plan. Kogan said the reset focused on “optimising inventory, rationalising unprofitable categories with an expected reduction in revenue, simplifying the cost base and applying elements of the Kogan.com operating model to the New Zealand market”. Sell less of the low-margin stuff, hold less of it, and stop paying to warehouse it in two islands.
There is one number that supports the story. In the final quarter of the financial year Mighty Ape made money again on the underlying earnings measure, its first positive quarter since late 2024. Sales through its higher-margin platform businesses, the Mighty Ape marketplace, the PRIMATE membership programme and the Mighty Mobile phone service, all grew.
The trouble is what happened next. Kogan also published its unaudited July figures. Mighty Ape’s gross sales for the month were A$8.6 million, down 17.1 per cent on July last year, and revenue was A$5.3 million, down 39 per cent. The New Zealand business is still shrinking, and shrinking faster than it was over the full year.
Founder and chief executive Ruslan Kogan struck an upbeat note in the announcement. “At Kogan.com, we continued to strengthen our customer proposition while growing profitability and expanding margins. At Mighty Ape, we have spent the year simplifying the business and improving its efficiency, creating a stronger foundation from which to deliver great value to New Zealand customers,” he said. He also said the group enters the new financial year “with a stronger and more efficient business”.
Investors were not convinced. Kogan shares closed at A$3.67 on Monday, down 18.6 per cent on the day, cutting the company’s market value to about A$352 million. That is despite a set of group numbers that on paper looked good. Group gross sales passed a billion Australian dollars for the first time, reaching A$1,042.3 million, up 12 per cent. The Australian Kogan.com business grew revenue 16 per cent to A$425.2 million and lifted its underlying earnings 22 per cent to A$45.1 million. The board declared a final dividend of 8 Australian cents a share, taking the year’s total to 16 cents, up 14.3 per cent.
The market’s read appears to be that the Australian half is doing the work and the New Zealand half is still a drag. Kogan bought Mighty Ape in December 2020 for A$122.4 million, near the top of the pandemic online shopping boom. Mighty Ape had started life in Auckland in 1999 as a shop selling Amiga computers, became an online games retailer, and by the time Kogan came knocking it was one of the best-known homegrown e-commerce names in the country, with a distribution centre at Silverdale and a genuinely loyal customer base.
Things went wrong after a platform relaunch in October 2024, which brought a wave of customer complaints about a site that had previously been one of the easiest in New Zealand to use. Sales have been falling ever since. The Christchurch warehouse, built for a business that was expected to keep growing, ended up being a fixed cost attached to a shrinking one.
The wider backdrop is not helping. New Zealand retail spending is soft. Stats NZ reported last week that retail sales volumes fell in the June quarter, the first fall in nearly two years, with higher fuel prices soaking up money that would otherwise have gone across shop counters and into online carts. Households buying less discretionary stuff is a problem for a retailer whose stock in trade is books, games, toys and consumer electronics.
For customers, the practical effect of the Christchurch closure is that South Island orders are once again coming from Auckland. Same-day delivery in Christchurch, the thing the warehouse was built to deliver, is gone. For Canterbury, it is another reminder that a distribution centre is only as permanent as the demand behind it.
Kogan says the priority for the coming year is to “build on the progress made through the operational reset and generate sustainable, profitable sales” at Mighty Ape. On the July figures, the sustainable part is still ahead of it.
Have you noticed a change in Mighty Ape’s delivery times since the Christchurch warehouse closed? Do you still shop there? Tell us in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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