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Masters to close in December

Masters logo 725 x 500

The Australian DIY chain Masters - a joint-venture between Australian supermarket chain Woolworths and American DIY chain Lowe’s – will close all of its stores by December 11th.  

Woolworths confirmed its intention to exit the home improvement business in January 2016, having experienced many years of trading losses.

By February, then-CEO Matt Tyson had announced his departure from the business and by June 2016, he was taken on by Wesfarmers to help with the Homebase turnaround

Woolworths has agreed to find roles in its other stores for affected staff and will pay redundancy payments to those it cannot redeploy.  Gift cards, warranties, returns and contracted home improvement projects will also be honoured.

The sale of stock is to be managed by inventory divestment specialist GA Australia, and is expected to achieve around $500 million.

It is expected that the closing down sales will net Masters around $1.5bn (AUS), with a final figure of around $500m once closing costs are factored in.

A Group named Home Consortium has agreed to the purchase of the 61 stores and 21 development sites owned by Masters, and will convert some of them into shopping centres. Australian retailers such as Spotlight, Anaconda, Chemist Warehouse, JB Hi-Fi, The Good Guys, Bunnings Warehouse and Woolworths are brands expected to take up residence in these centres.

In addition to selling its share of Masters, Woolworths has recently sold its other home improvement chain - Home Timber & Hardware – for $165 (AUS). Home Timber & Hardware was sold to Metcash, which owns the Mitre 10 chain. It was initially subject to an investigation by the Australian Competition and Consumer Commission and had to agree to sales terms for independent stores before the transaction could proceed.

The CEO of Woolworths, Brad Banducci, who has been in the role since February 2016 said: "This decision means management can focus on driving the momentum in our core businesses,".

He explained that the sale to Home Consortium was reliant on approval by Lowe’s and that it had taken around several months of reviewing and negotiating options to get to this stage.

Source : Insight DIY 

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25 August 2016

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