Woolworths closes all Masters hardware stores by mid-December

Former Woolworths Chief Executive Michael Luscombe targeted in 2011 to open up to 150 Masters outlets across the country to compete with Bunnings and Mitre 10. Facebook/Masters Home Improvement

Besides releasing its annual report on Thursday, Australian supermarket giant Woolworths announced a $1.5-billion three-part deal to facilitate its exit from home improvement. The deal includes closing all Masters hardware stores before the end of 2016.

Woolworths would sell 82 Masters hardware stores to the Home Consortium which would distribute the business to its three partners, Arrum Group, Spotlight Group and Chemist group. The hardware would stop trading on Dec 11 but would honour employees’ entitlements and customers’ rights.

Herald Sun reports that Woolworths would have a net proceed of $500 million from the sale. Home Consortium, in turn, would transform the 61 Masters outlets and 21 development sites into large-format retail centres.

Among the retailers which would be part of the large-format retail shops are Spotlight, Anaconda, Chemist Warehouse, JB Hi-Fi, The Good Guys, Super Amart, Bunnings Warehouse and Woolworths. Ahead of the mid-December closure target date, Woolworths would begin selling down its current inventory in the coming months. Bunnings, Masters’ main competitor, says the liquidation of inventory would have an impact on its operations and even on small businesses in the hardware business.

Part of the firm’s exit from the business was the sale of its Home Timber & Hardware chain to Metcash for $165 million. Metcash, owner of Mitre 10, expects to finalise the deal by October.

In a statement, Woolworths says it would try to find jobs for Masters employees within the group or pay full redundancy is no suitable roles are available. It would continue to honour all customer gift cards, product warranties, returns, lay-bys and contracted home improvement projects.

The Australian estimates about 8,000 jobs would be lost in “one of the biggest corporate misadventures in recent history” with Woolworths’ foray into the hardware business in 2011. Former Woolworths Chief Executive Michael Luscombe targeted in 2011 to open up to 150 Masters outlets across the country to compete with Bunnings and Mitre 10.

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