Woolworths to pull plug on MastersMasters has lost about $600m over the past four years. Photo: Glenn Hunt

Woolworths to pull plug on Masters

Sue Mitchell

Woolworths plans to pull the plug on its loss-making home improvement business Masters after buying out joint venture partner Lowe’s Companies Inc for an as-yet-undisclosed price.

Woolworths chairman Gordon Cairns said on Monday that Australia’s largest retailer would sell or wind up the home improvement business, which has lost more than $600 million over the last four years.

"We have determined we cannot continue to sustain ongoing losses from this business," Woolworths chairman Gordon Cairns. Photo: Louie Douvis “We have determined we cannot continue to sustain ongoing losses from this business,” Woolworths chairman Gordon Cairns. Photo: Louie Douvis

The decision follows the completion of a strategic review of the home improvement business, which includes Masters and Home Timber and Hardware, and Lowe’s move to exercise its put option.

“Our recent review of operating performance indicates it will take many years for Masters to become profitable,” said Mr Cairns.

“We have determined we cannot continue to sustain ongoing losses from this business,” he said.

“As a result of our engagement with Lowe’s, it has advised us that it intends to exercise the put option which is available to it under the joint venture agreement. The agreement requires this to happen before Woolworths may exercise its call option.”

“Following the exercise of our call option, we intend to pursue an orderly prospective sale or wind ‐up of the business,” he said.

This would enable full ownership of the business by Woolworths in a shorter timeframe and give the retailer access to the widest range of exit options, Mr Cairns said.

More to come

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