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Woolworths will close approximately 30 Big W stores and two underperforming distribution centers over the next three years, following the increase in the number of online shoppers.
The supermarket giant, which announced Monday that it would touch $ 370 million due to the closure of its annual results, does not say which stores would close or how many jobs would be created.
A warehouse located in Monsarto, SA, will close during the 2021 fiscal year, another in Warwick, Queensland, two years later.
Woolworths is still negotiating with homeowners, but said Monday that closures would cost $ 270 million, including severance pay.
Chief Executive Brad Banducci said Woolworths would try to offer another job for the staff involved, but that decisions would be made on a case-by-case basis.
"We are determined to do what is required of our team," Banducci said.
Woolworths will also proceed with a $ 100 million non-cash writedown of Big W, reflecting trading conditions as more and more sales go online.
Woolworths has 183 Big W stores and the division has been working for years, losing $ 110 million in the past year.
Sales rose 6% in the first 12 weeks of the current fiscal year but "earnings improvement is slower than expected," Woolworths said.
The division is expected to record a loss before interest and taxes of $ 80 million to $ 100 million this year.
Mr. Banducci said that Big W had the wind in his sails and was still a company that Woolworth wanted to participate in.
The supermarket giant also confirmed Monday a $ 1.7 billion buyout of non-market shares following the sale of its fuel business to EG Group.
Woolworths said that if shareholders were selling with a discount of between 10 and 14% of the market price, tax implications meant that the offer would make sense to some.
The company said it would provide a tax calculator on its website.
Woolworths shares rose 2.25% to 31,085 USD from 1143 AEDT.
Australian Associated Press
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