Masters $500M Sale Starts To Hurt
The impact of the 500 million Masters fire sale starting to be felt with tens of thousands cramming into the Woolworths owned stores in the last week.
According to specialist liquidation firm GA Australia who was bought in to run the giant sale the company is confident that they will clear over $100 million worth of appliances and $400 million worth of hardware stock.
According to Harvey Norman and The Good Guys management sales of house brand appliances which compete head-on with similar appliances sold by Masters have already weakened.
In what is one of the biggest closing down sales in recent retail history the impact is set to be felt across multiple retail groups due to the timing of the sale which comes during the peak renovation period running into the peak Christmas New Year sales period.
Last month Richard Goyder, the chief executive of Perth-based conglomerate Wesfarmers, which owns leading hardware retailer Bunnings, said the Masters fire sale was likely to lead to some “turbulence” as it washed through the sector.
The sale is being run as Woolworths and its joint venture partner Lowe’s face off in a courtroom battle over the winding-up of Masters, which includes the sale of its inventory, the acquisition of 82 Masters sites and properties by a consortium of investors led by former UBS Australia boss David Di Pilla and the sale of its Home Timber & Hardware business to ASX-listed Metcash for $165m.
Lowe’s raced to the Federal Court last month when Woolworths revealed its liquidation plans for Masters, which should raise about $1.5bn, and is seeking an immediate wind-up of Masters and an equitable divvying up of its assets. Lowe’s owns a one-third stake in Masters and is yet to negotiate a price to hand over that stake to majority owner Woolworths the Australian newspaper said.
Reflecting the acrimonious split up between the former partners, Lowe’s has accused Woolworths of “oppressive conduct’’ and acting in “bad faith’’.
Lowe’s had a victory in the Federal Court last week when it won access to documents relating to Woolworths dealings with its failed hardware chain Masters that could include planning and strategy documents and communications about the fire sale of the business.
Woolworths and Lowe’s will again square off against each other in court on Thursday.