End of an era? Woolworths takes a $370M hit as it shuts down 30 Big W stores across Australia
- Woolworths will close 30 Big W stores over the next three years
- The decision was made to help 'maintain a strong and profitable store network'
- Loss includes a $270M in exit costs plus $100M non-cash asset impairments
- The stores account for 16 per cent of its department store network
Woolworths has announced it will take a $370million hit in its full-year results after deciding to close 30 Big W stores and two distribution centres over the next three years.
The supermarket giant says the move was prompted by 'current trading and the outlook for the broader sector, including the continued customer shift to online.'
It also confirmed a $1.7billion share buyback following the sale of its fuel operations, and says the hit will be composed of $270million in lease and exit costs for closing about 16 per cent of its department store network, plus $100million of non-cash asset impairments.
Woolworths has announced its plans to close 30 Big W stores and two distribution centres over the next three years
The closures account for 16 per cent of the store's department store network
The company has not revealed which specific stores will be closing but confirmed the distribution centres in Monarto in South Australia and Warwick in Queensland will be shutting down.
Woolworths Group CEO Brad Banducci said in a statement it will try to avoid employee layoffs by offering staff 'alternative employment options' within the Woolworths Group where possible.
'This decision will lead to a more robust and sustainable store and DC network that better reflects the rapidly changing retail environment,' Mr Banducci said.
'It will accelerate our turnaround plan through a more profitable store network, simplifying current business processes, improving stock flow and lowering inventory.'
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The company revealed the speed of conversion to earnings improvement was taking longer than expected and a 'review was undertaken to help BIG W maintain a strong and profitable store network.'
There are currently 186 Big W stores across the country which have been around for four decades.
END OF AN ERA: HISTORY OF BIG W DEPARTMENT STORE
The first Big W store opened in Jesmond, New South Wales in 1964 as a division of the Woolworths Group.
The store's name was meant to stand for 'warehouse' from Woolworth's original name of 'Woolworths bargain basement warehouse.'
Big W store signage in Brisbane, Queensland
The department store was intended to be a one-stop-shop selling a broad range of general products.
As of 2015, there are a total of 186 Big W stores across the country and 22,000 employees across Australia and Asia.
There are currently 63 stores in New South Wales, 34 in Victoria, 46 in Queensland, 17 in Western Australia, two in Northern Territory, 17 in South Australia, three in Tasmania and five in the Australian Capital Territory.
The company announced on April 1 that it would be shuttering 30 Big W stores - 16 per cent of its department store network - and two distribution centres in South Australia and Queensland.
Prior to announcing the closures, Big W had faced some financial troubles as recently as 2017.
Former CEO Sally Macdonald resigned from her position just ten months into her role in November 2016.
Big W later reported a $150.5M loss from 2016 to June 2017.
