19 January 2016
Woolworths to close down Masters Hardware
Woolworths has decided to pull the plug on its Masters experiment and will seek a sale or closure of its home improvement business, which includes Masters and Home Timber & Hardware.
Woolworths said in a statement on Monday it was ready to sell or wind up Masters after heavy losses. The decision puts at risk over 7000 jobs across the chain’s network of stores –Masters has 63 stores in Australia.
Woolworths Chairman Gordon Cairns said in the statement that the company’s “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 added.
Woolworths bought out joint venture partner Lowe’s Companies Inc.’s stake. Mr Cairns explained that “as a resolute of our engagement with Lowe’s, it has advised that it intends to exercise the put option which is available to it under the joint venture agreement. The agreement requires this to happen before Woolworths may exercise its call option. Following the exercise of our call option, we intend to pursue an orderly prospective sale or wind-up of the business. This enables full ownership of the business by Woolworths in a shorter timeframe and gives us access to the widest range of exit options.”
Woolworths shares were up 6.8 per cent at $24.50 AUD on Monday morning.