Australia's Woolworths to close Masters DIY stores

Woolworths is closing its Masters hardware stores after the home improvement chain made losses of more than $600 million over four years.

The supermarket giant's chairman, Gordon Cairns, made the announcement in a statement on Monday.

'Our recent review of operating performance indicates it will take many years for Masters to become profitable. We have determined we cannot continue to sustain ongoing losses from this business,' he said.

Mr Cairns said Woolworths intends on buying out U.S.-based company Lowe's Companies Inc of its 33.3 per cent share of their joint venture, which runs Home Timber & Hardware, so the supermarket can sell off the business or close it.

It will take 'several months' before the situation is resolved but Woolworths assured trading would continue as per usual.

'Woolworths will honour all gift certificates, product warranties, returns, and lay-bys and the completion of any contracted home improvement projects such as kitchens, bathrooms and floor coverings,' Monday's statement read.

'Any gift cards can already be used at other Woolworths Group stores.'

Masters is a joint venture between U.S.-based company Lowe's Companies Inc, which holds a 33.3 per cent share of the business

There are 63 Masters stores located across Australia.

As for employees who will be out of the job, the supermarket giant said it would seek to find positions for staff within the group.

Retail expert Gary Mortimer, from the Queensland University of Technology, told Daily Mail Australia the move by Woolworths to dump Masters would not impact prices in the hardware sector but the supermarket sector.

'The business has not made a profit since it launched in 2011. I think Woolworths has been fighting fires trying to launch Masters,' he said.

'The move to dump Masters is good. It [Woolworths] will move now to focus on its core market – it's food.

'What we will see is a reinvigorated market... which will lead to lower prices and a lot more competition, and hopefully they [Woolworths] will be able to look to repair their general merchandise division, their Big W business.'

Meanwhile Masters' main competitor, Wesfarmers-owned Bunnings is planning to expand its fleet of stores by buying up 265 stores in the U.K. from British home improvement chain Homebase for AU$705 million (£304 million).

The deal is unanimously supported by Homebase's board, Home Retail Group, and is expected to be finalised in March this year.

It comes just four days after Wesfarmers confirmed it had made on offer on the home improvement franchise.

Read the press release from Woolworths here.

Read the press release from Lowe's here. 

Source : Louise Cheer – Daily Mail Australia
www.dailymail.co.uk/news/article-3404190/Woolworths-close-Masters-hardware-stores-600-million-loss.html