Private equity firms, including KKR & Co and TPG Capital, are reportedly interested in buying discount department store, Big W, from Woolworths.

Bloomberg reports that investors have held early talks with Woolworths and the chain could be valued at about $1.5 billion.

Woolworths chairman, Gordon Cairns, who was appointed in August, is currently leading the search for a new CEO for the supermarket giant.

In FY15 Woolworths suffered a 12.5 per cent slide in its full year profit, reporting a net profit of $2.15 billion down from $2.45 billion in FY14.

In August, Alistair McGeorge, then-MD of Big W, resigned after 14 months at the helm of the chain.