Woolworths has confirmed it’s closing thirty Big W stores over the next three years, amid persistent rumours the embattled department store is scoping for a buyer.
The news debunks previous reports suggesting Big W could close a third of its store network (i.e ~60 stores), incurring around $759 million in costs.
Today’s announcement follows significant management review, with closures also affecting two distribution centres – a $270 million hit to Woolworth’s earnings.
Additional impairments of $100 million also mount, adding to several years of write-offs and associated costs.
Whilst Q3 Big W sales are up 6%, Woolworths warns profitability improvement will take longer than forecast.
Despite this, the group expects Big W to post a full-year loss [before interest and tax] of $80 million – $100 million for fiscal year 2019, down from $110 million the year prior.
The news follows a $8 million loss for Big W for H1FY19.
Woolworths asserts it will seek to provide affected team members alternate roles within the group where possible.
As a positive for investors, Woolworths has also announced it completed the $1.7 billion sale of its petrol group to EG Group, enabling the retailer to commence a $1.7 billion off-market share buyback.
The buyback offer will start from April 16.
Shares in Woolworths Group are trading 2.3% higher to $31.10, shortly after market open.
