Woolworths this morning announced it would exit both its Masters JV and Home Timber & Hardware businesses.
First thing this morning, Aussie time, Woolworths announced that it would "commence an orderly process to exit its home improvement businesses, Masters Home Improvement and Home Timber & Hardware ... through a prospective sale or wind-up process."
While finding a ready buyer for the total home improvement business seems unlikely, it's clear that certain Masters stores would be quickly snapped up for re-use as Bunnings and we hear around the traps that the relatively successful Home Timber & Hardware business is also still attracting interest.
The Woolworths statement says:
"Our recent review of our operating performance indicates it will take many years for Masters to become profitable. We have determined we cannot continue to sustain ongoing losses from this business.
"Lowe’s has given us notice of its election to be able to exercise its put option under the joint venture agreement. As a result, Woolworths intends to exercise its call option to acquire the 33.3% stake held in by Lowe’s, which will allow us to control the exit process.
"This important decision allows us to focus our energy and resources on strengthening and executing our plans in our core businesses of Food, Liquor and General Merchandise."
Woolworths' home improvement vehicle Hydrox Holdings currently operates 63 Masters big-box home improvement stores and 275+ stores in the mainly trade facing Home Timber & Hardware chain.