30 Big W Stores To Close In The Next Three Years!
Post by Tuba Qureshi | Apr 01, 2019
The Leading Department Store Chain In Australia - Big W Is To Shut Two Distribution Centers And 30 Store In The Next Three Years!
In order to create more sustainability and profitability, Big W is in lieu of changing its retail environment by shutting down its two major distribution centers and approximately 30 stores in the coming three years.
The number is less than 60 stores closure that Macquarie Wealth Management has predicted in its previous month's report.
The decision is supposed to witness about 16 percent shrink, that will cost about $270 million business in lease and store exit costs. This will indeed impact the FY19 fuller-year result of Woolworths Group alongside the cash impairment of $100 million, as identified in the review.
Brad Banducci, The chief executive of Woolworths Group said in a note to investors "While the recovery in trading for Big W is encouraging, and there remains a further opportunity for improvement, the speed of conversion to earnings improvement is taking longer than planned,”
He further adds, “This decision will lead to a more robust and sustainable store and DC network that better reflects the rapidly changing retail environment. It will accelerate our turnaround plan through a more profitable store network, simplifying current business processes, improving stock-flow and lowering inventory.”
According to last month's report, Macquarie noted that half of Big W’s stores are located in quite a challenging centers, most of them are regional, and such locations are unlikely to provide the brand sales in return of profitability.
Woolworths expects that its department store business a loss before tax and interest for FY19 of $80 to $100 million, which is slightly below the $110 million loss felt in FY18.
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