Woolworths is finalising its exit from the home improvement category through three separate contracts, which the conglomerate has said will generate proceeds of $1.5 billion.
The supermarket giant has confirmed all Masters stores will cease trading on or before December of this year.
Wholesale distributor, Metcash has acquired the Home Timber & Hardware Group for $165 million. Woolies will retain three residual leases for three HTHG sites Metcash didn’t wish to take up involding two company-owned stores and a distribution centre.
GA Australia has been appointed to manage the sell-down of Masters inventory, which after GA provided an underwritten recovery, determined could yield approximately $500 million.
Home Consortium, which includes Aurrum Group, Spotlight Group and Chemist Warehouse, has proposed to purchase the Masters properties which includes 40 Masters freehold trading sites, 21 freehold development sites and 21 leasehold sites.
Home intends to repurpose the sites into multi-tenant large format centres.
“When I was appointed CEO in February, I said exiting the Home Improvement business was a top priority,” said Brad Banducci, CEO, Woolworths.
“The agreements provide certainty to our Masters team, suppliers and customers. It is the right resolution for our shareholders.”
Updated: 25/8 12:15pm AEST
Following the confirmation of Woolies plans to exit its home improvement businesses and the Home Consortium’s plans to turn the sites into multi tenant large format centres including the likes of The Good Guys and JB HiFi Home, John Winning, CEO of Winning Group issued the following statement to Inside Retail.
“It’s not surprising that they are discussing this approach. As a retail Group with different businesses, the multi tenant format allows them to house their own brands whilst providing customers with the convenience of other complimentary retail offerings.
“It’s an existing formula that makes sense. However, it’s important to acknowledge that Australians don’t want more of the same thing. Customers crave new brands and experiences that raise the bar and exceed expectations.
”After much of the same, hopefully we will see the centres house some new brands that customers can get excited about.”
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