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Thread: 60 Big w stores tipped to close

  1. #1
    Join Date
    29th Dec 2007
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    Default 60 Big w stores tipped to close

    Came across this along my web travels

    From https://www.bhg.com.au/big-w-closing-60-stores

    Struggling bargain chain store Big W could be forced to close a third of their 183 stores Australia-wide due to falling profits.

    Macquarie Wealth Management revealed the news in a client note today, stating that they may close 60 stores Australia wide after losing $110 million last financial year and $8 million in the first half of 2019.

    Partial closure of the most unprofitable and shorter lease stores is more likely, Macquarie said in the note, revealed in The Australian.

    Given significant closure costs for the portfolio, a more likely scenario is Woolworths to close up to one-third of its stores (60 stores), in our view. This cost could be around $759 million.

    One thing that could stand in the way of the mass store closures, however, is the massive costs the company would incur due to the existing $2.7 billion in lease commitments.

    Macquarie went on to say that the final cost would come down to the lease term remaining on these problematic sites and whether the landlord would accept a discount given potential for alternate use, etc.

    It was also revealed that half of Big Ws stores were located in challenging regional areas, which some believe could be hit by store closures if they were to happen.

    It is unlikely these locations will enable Big W to regain the momentum required for profitability, Macquarie said.

    In a challenging retail environment, we see a reduction in store count as the most likely outcome from the review. Given the format of Big W stores, we believe it would be difficult to reduce space as Myer is doing and that outright store closure is more likely.

    A spokeswoman for Woolworths, who own Big W, said a final decision had not been made as yet.

    At our half-year results in February we announced a national review of our Big W store and distribution centre network, she said.

    The review is ongoing and no decisions about our network have been made. We will update our team members and the market once the review has been completed.

    UPDATE:

    Macquarie Wealth Management first announced the possibility of closing 60 stores Australia wide on March 15 after reviewing Big Ws business in the wake of the company losing $110 million last financial year and $8 million in the first half of 2019.

    Partial closure of the most unprofitable and shorter lease stores is more likely, Macquarie said in the note, revealed in The Australian.

    Given significant closure costs for the portfolio, a more likely scenario is Woolworths to close up to one-third of its stores (60 stores), in our view.

    And while Macquarie didnt specifically name which Big W stores would be affected by the possible closures, it did say that regional areas could be hit hardest.

    It is unlikely these locations will enable Big W to regain the momentum required for profitability, Macquarie said.

    At present, there are around 30 stores located in rural and regional areas around Australia - leading local papers to question whether the Big Ws situated in their specific areas will be affected. If so, the below 25 regional stores are among the most likely to be affected.

    QUEENSLAND

    Dalby, QLD

    Gladstone, QLD

    North Rockhampton, QLD

    Yeppoon, QLD

    Emerald, QLD

    Warwick, QLD

    NSW

    Inverell, NSW

    Armidale, NSW

    Tamworth, NSW

    Muswellbrook, NSW

    Cessnock, NSW

    Singleton NSW

    Mudgee, NSW

    Erina, NSW

    Dubbo, NSW

    Richmond, NSW

    Katoomba, NSW

    Bonnyrigg, NSW

    Liverpool, NSW

    Bathurst, NSW

    Orange, NSW

    Parkes, NSW

    Tweed Head, NSW

    SOUTH AUSTRALIA

    Renmark, SA

    Port Augusta, SA

    WESTERN AUSTRALIA

    Bunbury, WA

    VICTORIA

    Bendigo, Vic

    Echuca, Vic

    Wangaratta, Vic

    Shepparton, Vic

  2. #2
    Join Date
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    Default

    This is just a broker report so it's pure speculation. Some stores may close but the exact number and locations are anyone's guess.

  3. #3
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    This report is from March 2019 so is hardly up to date. Also, I don't see how Liverpool and Bonnyrigg in NSW can be considered 'regional' when they are in the Sydney metro region.
    If I want your opinion, I'll give it to you

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  4. #4
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    I know in Townsville Big-W is pretty strong and two of them go directly (same mall) up against Target which is a total basket case in both, the other is a lone wolf in the K-Mart/Target/BigDizzub market, so imho they will most likely be safe up here. Now, having typed that "fact" the two targets up here are not listed for closure or re-branding as per the news articles about Target to K-Mart or full closure. This is the way. Sadly for the employees of these stores that are no longer sustainable, I think these last couple of months has made retailers more aware of consumers' actions than ever.
    I still function.....................while killing threads. ;-)

  5. #5
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    Quote Originally Posted by Fungal Infection View Post
    This report is from March 2019 so is hardly up to date.
    I thought it sounded familiar. I said the same thing back then when it was first posted here. Woolworths ended up stating they would close 30 stores.

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