Woolworths Group will shut about a sixth of its loss-making discount department stores over the next three years. These Big W shops which sell items like clothing, camping gear, kitchen appliances and televisions have been a drag on Woolworths' profitability since their falling profits in 2014 turned to mounting losses three years ago.
The division has been in turnaround mode since, without gaining much traction. According to investors, the announced exit from 30 stores at a cost of A$270 million ($192 million) illustrates both missteps along the way and the toughness of the market According to research firm IBIS World, compared with about 20 per cent for Big W, first-half earnings of the group slipped at previously outperforming rivals, Kmart and Target, which are owned by Wesfarmers and have a market share of nearly 50 per cent.
The division lost A$110 million in the 2018 financial year - less than the A$150.5 million it lost a year earlier. Woolworths expects the loss to narrow further this year but also flagged a A$100 million non-cash impairment owing to the gloomy outlook.
