Woolworths to close Masters stores in December
Woolworths’ ill-fated foray into Australia’s home hardware market will come to an end on December 11, with the retail giant to sell its embattled home improvement division in deals worth $1.5 billion.
Woolworths expects to spend about $1 billion winding down the business, it says in an announcement on Wednesday, with shareholder payments to be processed out of the remaining $500 million.
The Home Consortium, which comprises Aurrum Group, Spotlight Group and Chemist Warehouse, will buy the Masters properties, which include 40 freehold trading sites, 21 freehold development sites and 21 Masters leasehold sites. That deal is subject to consent from parent company Lowe’s Companies.
In the statement, Woolworths says Home Consortium plans to “repurpose the former Masters sites into multi-tenant large format centres”.
As part of Woolworths’ exit, rival Metcash will acquire its Home Timber & Hardware business for $165 million and continue to operate those stores.
These agreements are the result of an intensive seven-month process of reviewing all possible options for exit and extensive negotiation
Masters will now begin a mass selldown of its inventory, in a process to be managed by GA Australia that is expected to yield about $500 million.
Woolworths CEO Brad Banducci says the sale of its hardware arm will bring to a close seven months of uncertainty.
“When I was appointed CEO in February, I said exiting the Home Improvement business was a top priority. Today’s announcement delivers on that commitment,” he says.
“These agreements are the result of an intensive seven-month process of reviewing all possible options for exit and extensive negotiations.”
Woolworths vowed to find its 7700 home improvement employees other jobs within the group, or pay full redundancies if employment is not available.