Macquarie report says up to 60 Big W stores may need to close

Woolworths Group may need to consider closing up to a third of its Big W locations if the discount offering continues to underperform, a Macquarie Wealth Management report said.

According to the report, as first reported last week by The Australian, Woolworths Group’s review into the Big W store and distribution centre network is likely to end with up to 60 store closures, given the challenging retail environment.

A Woolworths spokesperson told IR that the review is still ongoing and that no decisions about the network have been made.

“We will update our team members and the market once the review has been completed,” the spokesperson said.

But Macquarie noted that half of Big W’s stores are in challenging centres, many of which are regional centres, and that these locations are unlikely to give the brand the sales it needs to return to profitability.

Woolworths Group announced the national review into its Big W store and distribution centre network in February, when the discount department store chain reported a loss before interest and tax of $8 million over the first half of the year, despite comparable sales growth of 5 per cent.

Woolworths said it is expecting further losses from the brand over the remainder of the year, but that it was not expected to be as severe as the FY18’s $110 million loss.

Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.

Comments

Comment Manually

I have read and agree to the Terms and Conditions and Privacy Policy.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Inside Retail Polls

As FY18 draws to a close, how would you describe your company's full-year results??

Twitter

.@Wesfarmers to purchase @catch_au for $230 million, with @Kmart_Australia and @Targetaus to benefit from the marke… https://t.co/RNsoNC7H0R

1 week ago

Australian brand house #Gazal acquired by @PVHcorp in order to have greater control over its brands, such as… https://t.co/lHAdi7mKmg

2 weeks ago

Two thirds of Aussies are looking for discounts online says @PayPalAU, while retailers seek to slow price markdowns… https://t.co/54hjxgpGax

3 weeks ago
x

SUBSCRIBE
FREE NEWS BRIEFS Get breaking news delivered