By Claire Reilly

Despite announcing yesterday that it would be spending $300 million to officially extricate itself from the failed Dick Smith electronics franchise, Woolworths Limited has found success elsewhere, reporting stellar sales for its home improvement/appliance retail offering, Masters.

According to the company’s half-yearly results statement, Woolworths is making “good progress” on the Masters business, which is a joint venture with American home improvement giant, Lowe’s.

“Home Improvement sales increased 16.4 per cent to $412 million for the first half and increased 26.6 per cent to $224 million for the second quarter,” the statement read, citing figures for the first half of the 2011-12 fiscal year.

“Our first Masters store commenced trade during September 2011, with seven stores open at the end of the half and a further eight are planned to open before the end of the financial year,” the statement continued. “Customer feedback has been very positive in relation to the new home improvement offering and trade is progressing well.

“Of the 150 sites we plan to secure over 5 years, there are over 100 sites in the pipeline. At the end of the half, there were a further 18 stores under construction.

In addition to the retailer’s physical presence, Woolworths is also executing plans for Masters’ “multi-option project,” announcing that “a fully transactional website [will] be launched in 2012.”

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Looking ahead, Woolworths also outlined the costing for the continue rollout of Masters stores across Australia.

“Woolworths plans for future growth, through expansion into the circa $40 billion Home Improvement market,” the company said. “We anticipate start up costs for Masters in FY12 of up to $100 million.

"The amount of the start up costs is dependent upon a range of factors, particularly the pace of our new store roll out.

“We anticipate trading will continue to be subdued over the remainder of the year as a result of the prevailing external conditions.”

Despite this, Woolworths noted it was “well positioned in all its market segments” to weather difficult retail conditions, thanks to “a strong and sustainable business model geared towards the less discretionary retail segments.”

The company has predicted growth of between 2 and 6 per cent for the 2011-12 financial year, excluding the $300 million provision for exiting the consumer electronics category, and “subject to the uncertainty in prevailing external conditions”.