Woolworths to shut 30 Big W stores across Australia
Thirty Big W-occupied stores and two distribution centres will be shut by parent company Woolworths over the next three years.
The industrial sites are in Monarto, south-east of Adelaide, which is expected to close in 2021, and in Warwick, in Queensland, in 2023.
Details of which outlets will close have not yet been decided.
Currently, Big W trades from 183 stores nationally.
A Woolworths share announcement said the group expects to pay about $270 million in lease and exit costs, contributing to a $370 million hit to the company’s profits.
Woolworths chief executive Brad Banducci said the company will begin to negotiate with landlords to determine which stores make the most economic sense to close.
According to Macquarie Wealth Management, Woolworths has about $2.9 billion in lease commitments.
Various analysts are reported as saying Big W may need to shut more than 30 stores.
The discount variety store competes with Wesfarmers owned K-Mart, which under the management of Guy Russo, several years ago adopted a successful marketing strategy of smaller stores, stocking less brands.
In January, CBRE represented Woolworths, selling a development site in Melbourne’s Mernda, permit-ready to become a mixed-use town centre, for $50 million, to Land Capital. Woolworths paid $28.4 million for 24.9 hectare site in 2010.
Late last year Woolworths also sold retail investments in regional New South Wales and Perth for more than $72 million.
It also assigned the lease of a Melbourne industrial property no longer required since the closure of its failed Masters hardware brand in 2016, via agency Savills.
