Bunnings grows, Woolies loses home improvement. As Wesfarmers was this morning revealing more detail on its plans to export Bunnings to the Poms by buying UK do-it-yourself retailer Homebase for $705 million, rival Woolworths was revealing that it had been forced to buy its US partner out of their loss-making home improvement business, Masters, and raised that the hardware experiment would be ended this year in a flood of red ink and huge losses. Wesfarmers’ update (the deal was first revealed late last week) was upbeat and a sign that the Australasian market is now too small for the monster that Bunnings has now become. Woolies’ news was sort of expected (but not quite now) but US partner Lowes (America’s second biggest home improvement group) has obviously tired of the losses and lack of headway at Masters and had told its partner it wanted out.
The closure (and what about the hardware supply operations of Danks and Home Hardware, which are in the joint venture, but separate to Masters and are profitable?) of Masters and other parts of the home improvement business will cost Woolies and its suffering shareholders hundreds of millions dollars, if not more than a billion. And you, dear Crikey readers and taxpayers, will pay for part of these losses through tax write-offs wherever Woolies can find them. And you know, we can’t find a nasty trade unionist or regulator or government to blame for this disaster -- it's all Woolies’ own fault. -- Glenn Dyer