As reported on ABC’s The Business last night (video above), Woolworths has confirmed that it will walk away from its disastrous foray into hardware and close all of its 61 Masters stores by December, following losses of $200 million a year.
The cost to Woolworths’ shareholders of closing the Masters stores is estimated at $1 billion, once sale costs are included.
Masters’ inventory will be sold for $500 million, with $833 million to be recovered from the sale of Masters’ sites to a consortium made up of aged care provider Aurrum, the Spotlight Group and Chemist Warehouse, subject to agreement from Woolworths’ US-based joint venture partner Lowe’s.
15 of these sites will then be on-sold to Wesfarmers for new Bunnings stores.
And to complete the exit from hardware, Woolworths will also sell its Home Timber and Hardware to Metcash for $165 million.
There will be significant job losses, too, with 7,700 staff employed in the home improvement area; although some will be redeployed within the Woolworths Group.
