Woolworths have announced that they will not be continuing with their Masters home improvement concept (Monday 18/1/2016). After spending around $2billion setting up this major competitor to industry leader, Bunnings, in the home improvement category, the business will be sold or shut down.
Woolworths will also be exiting the Home Timber & Hardware business after re-evaluating its future and establishing that bringing Masters to profit was going to take longer than expected. Shareholders seemed to like the announcement with Woolworths defying a steep share market slide to close 4.4% up. Stores will continue to trade as management work through a complex exit strategy which is likely to take some time. It is expected that the disposal of Masters will generate significant funds that Woolworths will be able to channel into other parts of their business.
On the same day rival Wesfarmers announced the purchase of UK home improvement chain, Homebase. It is expected that 256 Homebase stores in the UK and Ireland will be re-branded Bunnings over the next three to five years.