Macquarie report says up to 60 Big W stores may need to close

Woolworths Group may need to consider closing up to a third of its Big W locations if the discount offering continues to underperform, a Macquarie Wealth Management report said.

According to the report, as first reported last week by The Australian, Woolworths Group’s review into the Big W store and distribution centre network is likely to end with up to 60 store closures, given the challenging retail environment.

A Woolworths spokesperson told IR that the review is still ongoing and that no decisions about the network have been made.

“We will update our team members and the market once the review has been completed,” the spokesperson said.

But Macquarie noted that half of Big W’s stores are in challenging centres, many of which are regional centres, and that these locations are unlikely to give the brand the sales it needs to return to profitability.

Woolworths Group announced the national review into its Big W store and distribution centre network in February, when the discount department store chain reported a loss before interest and tax of $8 million over the first half of the year, despite comparable sales growth of 5 per cent.

Woolworths said it is expecting further losses from the brand over the remainder of the year, but that it was not expected to be as severe as the FY18’s $110 million loss.

Access exclusive analysis, locked news and reports with Inside Retail Weekly. Subscribe today and get our premium print publication delivered to your door every week.

Comments

Comment Manually

Twitter

When Crumpler CEO Adam Wilkinson stepped up to lead the Tigerlily brand earlier this year, he asked customers for f… https://t.co/cGtmSxgHkj

3 hours ago

The supermarket giant has received the highest ever fine issued by the Australian Communications and Media Authorit… https://t.co/7DW7PRoizS

24 hours ago

Kathmandu's sales have risen sharply over the past six weeks, but CEO Xavier Simonet remains cautious about the ret… https://t.co/nwniA7wcmE

24 hours ago