Mas­sive Mas­ters sell-off be­gins

Australasian Timber - - NEWS -

MORE THAN half a bil­lion dol­lars of dis­count hard­ware will be off­loaded in a mas­sive fire sale after Wool­worths set a clos­ing date for its failed home im­prove­ment chain Mas­ters.

The su­per­mar­ket gi­ant drew a line un­der its dis­as­trous ex­per­i­ment with hard­ware on 24 Au­gust, an­nounc­ing the sale of its Home Tim­ber and Hard­ware chain to Mitre 10’s owner, Met­cash, and the sale of its Mas­ters Home Im­prove­ment stores.

Mas­ters stores will close their doors for good on or be­fore De­cem­ber 11, Wool­worths said. It first flagged its exit from the busi­ness in Jan­uary.

Ev­ery­thing from paint, tim­ber, bar­be­cues, vac­uum clean­ers and all other Mas­ters stock, worth be­tween $600 mil­lion and $700 mil­lion, will be sold off in a fire sale.

Wool­worths ex­pects to net $500 mil­lion from the dis­count sale.

The com­pany has ap­pointed the Great Amer­i­can Group, part of one of the world’s largest in­ven­tory divest­ment spe­cial­ists, to man­age the sell-off, with the sup­port of Mas­ter staff.

Wool­worths said it would hon­our cus­tomer gift cards, war­ranties, re­turns and lay­bys, and would com­plete any con­tracted in­stal­la­tion projects.

“Since the sale process be­gan, our 7700 staff in the Home Im­prove­ment busi­nesses have worked ex­tremely hard in an uncer­tain en­vi­ron­ment and we sin­cerely thank them for their com­mit­ment,” Wool­worths chief ex­ec­u­tive Brad Ban­ducci said.

“We will work hard to find Mas­ters em­ploy­ees jobs within the group or pay full re­dun­dancy where suit­able roles are not avail­able.”

Since 2009, Wool­worths and its joint ven­ture part­ner, US hard­ware gi­ant Lowe’s, in­vested $3.48 bil­lion in the home im­prove­ment pro­ject, in­clud­ing Mas­ters and the prof­itable Home Tim­ber and Hard­ware busi­ness.

Wool­worths an­nounced it was ex­it­ing hard­ware in Jan­uary, after it racked up losses of more than $600 mil­lion in the four years prior.

Home Con­sor­tium, whose own­ers in­clude the fam­i­lies be­hind the Chemist Ware­house and Spot­light, will buy the joint ven­ture ve­hi­cle, Hy­drox Hold­ings, for about $800 mil­lion in­clud­ing debt.

Home Con­sor­tium said it was al­ready in ne­go­ti­a­tion with re­tail­ers in­clud­ing Ana­conda, JB Hi-FI, Su­per Amart, BBQs Ga­lore, Wool­worths Su­per­mar­kets and Dan Mur­phy’s to take over the 61 prop­er­ties.

Bun­nings con­firmed it planned to take over 15 Mas­ters sites. Eleven of those would re­place ex­ist­ing stores.

Wool­worths will net $165 mil­lion by sell­ing Home Tim­ber and Hard­ware to Met­cash, al­low­ing it to merge with Mitre 10 and cre­ate a new $2 bil­lion player in the sec­tor.

Wool­worths said it would make gross pro­ceeds of $1.5 bil­lion by sell­ing out of its hard­ware as­sets.

The lat­est key points in Wool­worths home im­prove­ment exit (as at 24 Au­gust) were:

• Wool­worths Lim­ited (Wool­worths) has agreed three sep­a­rate con­tracts to fa­cil­i­tate its exit from Home Im­prove­ment for es­ti­mated gross pro­ceeds of $1.5 bil­lion • Mas­ters will cease trad­ing at all stores on or be­fore 11 De­cem­ber 2016 Wool­worths will work hard to find Mas­ters em­ploy­ees jobs within the Group, or will pay full re­dun­dancy where suit­able roles are not avail­able Wool­worths will hon­our all cus­tomer gift cards, prod­uct war­ranties, re­turns, lay-bys and con­tracted home im­prove­ment projects and will work con­struc­tively with all sup­pli­ers 1. Met­cash to ac­quire Home Tim­ber & Hard­ware Group (HTHG) for a head­line pur­chase price of $165 mil­lion, with the busi­ness con­tin­u­ing to trade

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