The seven month sale process.
January 18: Woolworths cuts Masters loose
Woolworths chairman Gordon Cairns notified shareholders that the company has cut the ailing Masters chain loose to either pursue an orderly prospective sale or wind up of the business.
“Our recent review of operating performance indicates it will take many years for Masters to become profitable. We have determined we cannot sustain ongoing losses from this business,” Cairns said in a statement. “This important decision allows Woolworths to focus its energy and resources on strengthening and executing its plans in our businesses.”
August 24: Woolworths announces exit from home improvement
Following a seven month sale process, Woolworths agreed three separate contracts to facilitate its exit from home improvement for estimated gross proceeds of $1.5 billion. After estimated wind-down costs, Woolworths expects approximately $500 million prior to any shareholder payments.
GA Australia has provided an underwritten recovery for the value of Masters inventory and has been appointed to manage sell-down. It is subject to certain adjustments and is estimated to deliver gross proceeds of approximately $500 million. Woolworths will honour all customer gift cards, product warranties, returns, lay-bys and contacted home improvement projects and will work constructively with all suppliers.
Masters will cease trading at all stores on or before 11 December, 2016. Woolworths aims to shift employees to other jobs within the Group, or will pay full redundancy where suitable roles are not available.
August 26: Bunnings secures Masters sites
Bunnings has entered into an agreement with Home Consortium for seven freehold Masters sites. There are six freehold trading locations and two freehold development sites covered by the Bunnings/Home Consortium agreement.
In relation to the six freehold trading locations, Bunnings will enter into new leases directly with Home Consortium. Work to reformat these locations is expected to take up to five months from the date of completion, at which time the stores will then open as Bunnings Warehouses.
August 29: Hardware association welcomes Masters closure
Hardware Australia, the peak industry body for independent hardware retailers and suppliers, said the decision to close Masters will have significant impacts on employees, suppliers and customers.
Hardware Australia executive officer, Scott Wiseman said this decision, coupled with the unification of Mitre 10 and Home Timber & Hardware, could result in independent stores being able to claw back some market share.
September 12: Woolworths and Lowes go head to head
Woolworths has been ordered to produce documents sought by Lowe’s about the wind up of the Masters business. The barrister for Lowe’s said his client wanted to see documents in case they showed evidence of “a stitch up” at the board meeting where it was voted to end the Masters joint venture, according to an article in The Australian.
September 21: Woolworths was keen to offload stake
One month before Woolworths decided to wind up its Masters business, it wanted joint venture partner Lowe’s to buy half its stake for $580 million and tried to sell its Home Timber & Hardware business for $100 million more than it was worth. This information was detailed in court documents obtained by Australian Financial Review released from suppression orders this week.
October 10: Masters flies under radar
Masters Home Improvement has reportedly tried to cancel supplier orders in recent weeks as complaints continue to roll in about prices not being sufficiently cut to move stock as part of its closing down sale.
Masters has taken down all pricing information from its website and cut off its telephone lines to its stores. Customers calling the corporate helpline are advised to visit a store to check prices.
November 9: Spotlight Group plans Masters future
Owners of the Spotlight retail group, Zac Fried, and his uncle Morry Fraid, have gained control of the majority of Masters’ development portfolio. They have secured exclusive rights to begin building homemaker centres from May 2017.
Home Consortium snatched up 61 stores and 21 development sites when Woolworths offloaded them in August. Spotlight Property Group had picked up 19 of the 21 development sites, with the two remaining sites in Sydney staying with Home Consortium.
December 14: Employees find new roles within Woolworths
More than 1,500 former Masters employees have found new jobs within Woolworths, following the end of the hardware chain’s fire sale on Sunday.
About 1,650 Masters staff of the former workforce of 6,000, have accepted new roles at Woolworths supermarket chain, that equates to just under half the number of people who were offered alternative jobs, according to an article in the Sydney Morning Herald. An additional 600 workers have taken roles through Woolworths’ outplacement program instituted when the retail giant announced plans to cease trading.
