Big W Tipped To Be Expanded To Take On Aldi
Roger Corbett, the former boss of Woolworths who often does an early morning walk along Balmoral Beach, has come out punching claiming that Masters was “A big mistake” and that key US retail partner Lowes experience in the hardware market an “Absolute disgrace”.
His comments came the same day that he quit the Woolworths board.
He also claims that Big W who recently parted Company with Sony in favour of Philips products in their consumer electronics category has a bright future and that they are in an excellent position to take it up to Aldi.
Woolworths is still trying to extricate itself from the Masters disaster, they are currently negotiating to buy back Lowe’s one-third stake in the business and then either sell the retailer or close it down completely.
Woolworths has been forced to write off more than $3 billion linked to the Masters experiment.
ChannelNews has been told that a decision has already been reached and that Woolworths will liquidate stock via “massive sales” in late November and December.
“Well, I had nothing to do with Masters, either in the consultancy arrangement or in its original (formation), but Masters was clearly a massive strategic mistake and it was extremely poorly executed, extremely poorly executed,’’ Mr Corbett told The Australian.
Corbett led Woolworths through its golden age when it outmanoeuvred Coles and ruled the supermarket sector.
Last week Big W was selling discounted TV’s, with the retailer currently in discussions with various house brand distributors regarding appliance and consumer electronics ranging.
Bi W believes that Aldi is currently turning over between $95 and $110M in appliances and that they have already snared 10% of the Australian appliance market.
Speaking to The Australian yesterday after declaring he would end his consultancy role with the Woolworths board after only seven months, Mr Corbett also said the retailer’s loss-making general merchandise chain Big W could beat German discounter Aldi at its own game.
Mr Corbett, a former director of US retail giant Wal-Mart, fired off a stinging criticism of Lowe’s, the US hardware giant that was supposed to help Woolworths succeed and navigate in the Australian hardware sector but failed in the most basic tasks, such as recognising seasonal differences between the northern and southern hemispheres that would impact what products needed to be sold during the Australian winter and summer.
“Lowe’s was a partner there, they were the hardware experts,’’ Mr Corbett said, “and I think … clearly Woolworths were relying on the expertise of Lowe’s and the execution was an absolute disgrace and it caused a terrible problem for (Woolworths) shareholders.’’ he told The Australian.
He said that his advice to the board — was to keep underperforming general merchandise chain Big W rather than dumping it.
He said Big W’s recent ills were caused by bad management.
“Big W has been an excellent asset in the past and there is no reason (it can’t succeed) if it’s well managed in the future. (Big W) had a wonderful position in the market and was clearly the market leader with everyday low prices. It was by far the biggest and most profitable out of Target, Kmart and Big W — and its only bad management that it put it where it is today.”
In the December half sales for Big W slid 3.9 per cent to $2.27 billion.