Big W Post $85M Loss Amid Store Closures
Embattled discount department store, Big W, has suffered a $85 million full-year loss, amid several store closures and rumours of a proposed sale by parent company Woolworths.
Back in April, Woolworths confirmed it was closing around 30 Big W outlets over the next three years, thereby boosting group profitability.
Sydney’s Chullora, Fairfield and Auburn are among the first to go, scheduled to close January 2020.
Despite a 4.2% lift in Big W FY19 sales, Woolworths has warned in the past profitability improvements would take longer than forecast.
The discount retailer’s FY19 loss fell within the $80 million – $100 million guidance, and is down from the $110 million loss in FY18, and $151 million loss the year prior.
The news comes after department stores [Kmart and Target] pulled down Wesfarmers results, hampering growth from Bunnings and Officeworks.
Looking to FY20, Big W claims it’s focused on further simplifying its store and support office business.
The retailer claims it has continued to refine its pricing, amidst sluggish local retail conditions and fierce online competition. It will also accelerate its apparel offering.
FY19 highlights include “significant improvement” in stock flow for key events e.g. Christmas and Toy Sale.
Parent company, Woolworths, has increased its final dividend by 14% after a 56% jump in annual profit to $2.7 billion.
The news comes as Woolworths continues to clamp down on its supermarket business, following the closure of its Masters hardware store, and forthcoming rumoured business sales.
Woolworths is reportedly in talks to spin-off its hotel, liquor and gaming businesses – combining Endeavour Drinks and ALG into a $10 billion business, which shareholders will vote upon in November.