Catch Group the business that Wesfarmers paid $230M for in 2019 has bled another $163M in losses and despite various management attempts to turn the Wesfarmers owned online operation around the losses keep mounting.
The business that has already undergone mass sacking of staff saw revenues decline almost 30% to $733 million during the past year,
The loss of $163 million for the year, including restructuring costs of $40 million relating to inventory provisions, more team member redundancies and asset write-offs.
Wesfarmers management claim that Catch’s disappointing financial performance was impacted by changing customer demand, poor margin outcomes in the in-stock range and elevated supply chain costs.
Restructuring actions and changes to management commenced late in the first half and were implemented through the second half of the 2023 financial year.
Performance in the second half reflected progress from restructuring activities, with losses reducing relative to the first half, but significant further progress is still required.
Investments made in Catch in recent years are being leveraged across the Group to provide some centralised e-commerce fulfilment capabilities and strengthen digital marketing programs.
Six months ago, Catch confirmed the loss of 100 jobs.
“Like many eCommerce brands, Catch has made the difficult decision to reduce its workforce as the business adjusts to changes in online demand that has occurred following the Covid period. We want to be as efficient as possible to drive value for our customers” a spokesperson said at the time.
Gabby Leibovich was the co-founder of Catch Group, which when sold appeared to be struggling with Catch reporting a loss of $4.3m in fiscal 2018, down from a loss of just over $17m in 2017.
In 2018 revenue rose more than 40 per cent to $262m then along came Wesfarmers with a pot of Gold for the former owners, brothers Gabby Leibovich and Hezi Leibovich.
When the business was acquired, they had 800 staff.
Wesfarmers bought Catch only months before Covid-19 struck, which was a period that delivered a surge in online trading, but despite this Catch was not able to ride the online wave that saw online sales at retailers such as JB Hi Fi and The Good Guys surge.
For the 2022 full year Catch posted a 1.6 per cent lift in transaction value to $989m but losses almost doubled to $88m.
To help stem the flow of losses and improve its performance, Wesfarmers announced in April last year a restructure of the loss-making Catch that would see jump from being part of its Kmart division to join Wesfarmers new data and digital division, now called Wesfarmers OneDigital.
The move saw departure of Catch managing director Pete Sauerborn at the end of June 2022, having only joined the company in May 2020.
Catch was handed over to former Wesfarmers executive Nicole Sheffield, a former executive at Australia Post and News Corporation.
