Woolworths officials have confirmed today that 30 Big W stores across Australia will be closing over the next three years as the company looks to shed costs, despite an overall improvement in profits.
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Officials stated that 30 Big W stores – representing 16% of the company’s total – will be shut down over a three-year period, which will result in the company taking a $370 million overall hit due to lease and exit expenses and other factors.
Woolworths officials also confirmed they would shut down two Distribution Centres as part of the closures.
The store scuttlings come despite an overall trading recovery for Big W, who have been a struggling arm of Woolies’ operations for quite some time. Increased revenue has not translated to the profit improvement company officials had been hoping for, and thus the decision has been made to close the stores.
Woolworths chief executive Brad Banducci confirmed the closures in a trading update issued this morning.
As foreshadowed at our half-year 2019 results, while the recovery in trading for Big W is encouraging and there remains further opportunity for improvement, the speed of conversion to earnings improvement is taking longer than planned.
This decision will lead to a more robust and sustainable store and DC [distribution centre] network that better reflects the rapidly changing retail environment. It will accelerate our turnaround plan through a more profitable store network, simplifying current business processes, improving stock flow and lowering inventory.
Company officials did not confirm when the store closures would begin, nor what locations would be affected. The mass store closures will likely result in the loss of scores of jobs.
