Masters Home Improvement

Masters Home Improvement
Subsidiary
Industry Retail, Home Improvement
Founded 2011
Defunct Closing December 2016 (2016-12)[1]
Number of locations
 62
Area served
 Australia
Key people
 Grant O'Brien (Woolworths Limited CEO), Matt Tyson (Managing Director, Home Improvement), Melinda Smith (Director, Masters)
Revenue IncreaseA$1.1 billion (2016)[2]
DecreaseA$ -234 million (2016)[2]
Parent Woolworths Limited
Website www.masters.com.au

Masters Home Improvement is the trading name of an Australian home improvement chain operated by retailer Woolworths Limited.[3] Masters was created as a way for Woolworths Limited to enter the hardware retail space, which has been historically dominated by Bunnings Warehouse, owned by rival Wesfarmers. The two companies already compete with each other with groceries, liquor, fuel and general merchandise.

The first Masters outlet was opened in Victoria in September 2011.

In January 2016 Woolworths announced they would exit the hardware business, selling or closing the Masters Home Improvement chain.

In August 2016, it was announced all stores would close by mid-December that year.[1] The subsidary is being sold in three phases: a number of stores are being sold to rival Bunnings Warehouse, the remaining stores are being sold to various companies including Chemist Warehouse and remaining stock is being sold to a private equity. Masters later stated that all stores would cease trading on, or before, 11 December 2016.

History

Masters was initially conceived as a joint venture between Australian retailer Woolworths Limited and U.S. based hardware chain, Lowe's.[3] The brand name was announced on 2 May 2011,[4] coinciding with the launch of a website at masters.com.au.[5] Hans Hulsbosch, who has designed brand identities for Woolworths and Qantas designed the Masters brand and logo.[6]

The first outlet, located in Braybrook, Victoria, opened to tradesmen on 31 August 2011, and the general public on 1 September 2011.[4] In the Sydney Morning Herald, CEO Don Stallings is attributed as saying that staff will be trained for at least 100 hours, and the stores will offer over 35,000 products.[7] Ways in which Masters will differentiate from its competitors include stores which are more brightly lit, more colourful with polished concrete, large colour signage and store displays, it aims to place more emphasis on attracting female shoppers. Buzzers scattered around the store, which, when pressed, will send a nearby staff member to that location to help out a customer, pagers handed to customers which enables them to continue shopping while their paint is tinted, selling more 'non hardware' lines such as whitegoods as well as having McDonald's restaurants and McCafés in selected stores. In June 2012 Masters launched their transactional website that offers more than 30,000 products nationwide. This gave Masters Home Improvement the title of Australia's first online hardware and home improvement retailer.

The first Masters store in South Australia opened in Mount Gambier in August 2012, followed by Adelaide Airport in December 2014.[8] Two more were then built in Noarlunga Centre & Parafield but both never opened.

Sale or windup

On 18 January 2016 Woolworths announced that it intended to "either sell or wind up" all its home improvement area, including the Masters hardware chain. Chairman Gordon Cairns said that it would take years to become profitable and that the ongoing losses could not be sustained.[9] The windup will involve Woolworths buying back a 33.3 per cent interest in the venture, held by the Lowe's subsidiary WDR Delaware Corporation.[10]

Big box international retailers are now assessing whether Masters stores are adequate for their use.[11]

As of 28 August 2016 all stores are due to cease trading on, or before, 11 December 2016.[12]

Operating Results

A Masters Home Improvement store in Canberra, Australian Capital Territory.

According to Woolworths Limited annual reports,[13] Masters results were:

Financial Year Sales A$ millions +or- % Prior Year EBIT A$ millions Stores open at end of FY
2011-2012 $146 NA ($117.4) 15
2012-2013 $529 262% ($156.6) 31
2013-2014 $752 42% ($176.0) 49
2014-2015 $930 24% ($227.4) 62

References

  1. 1 2 Letts, Stephen; Morgan, Elissa (2016-08-24). "Woolworths to shut Masters by year end, Metcash buys Home Timber and Hardware". ABC News. Retrieved 25 August 2016.
  2. 1 2 Sales report. "Full Year Results - Financial Year 2015, Page 21" (PDF). Retrieved 16 November 2015.
  3. 1 2 "Masters Plan For DIY Market". Melbourne: theage.com.au. 3 May 2011. Retrieved 18 May 2011.
  4. 1 2 Speedy, Blair (3 May 2011). "Woolworths reveals plans for hardware venture". theaustralian.com.au. Retrieved 18 May 2011.
  5. ↑ "Masters Website". Masters Home Improvement. Retrieved 18 May 2011.
  6. ↑ "Billion dollar battle for DIY". australiancreative.com.au. Retrieved 18 May 2011.
  7. ↑ "Woolies aims to master hardware". smh.com.au. 3 May 2011. Retrieved 18 May 2011.
  8. ↑ "$80m shopping complex opens". borderwatch.com.au. 10 Aug 2012.
  9. ↑ "Woolies winds up Masters". Courier Mail. News Corp. 17 January 2016. Retrieved 17 January 2016.
  10. ↑ Ryan, Peter; Janda, Michael (17 January 2016). "Woolworths to exit doomed Masters hardware venture". ABC News. Retrieved 11 July 2016.
  11. ↑ Low, Catie (9 October 2015). "Woolworths could unlock 'treasure chest' by dumping Masters". Sydney Morning Herald. Fairfax. Retrieved 11 July 2016.
  12. ↑ "Woolworths Update On Home Improvement Exit". Masters News. Masters Home Improvement. 28 August 2016. Retrieved 5 September 2016.
  13. ↑ woolworthslimited.com.au
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