17 hours Ago By David Richards
Woolworths has a new CEO with Amanda Bardwell facing now facing a call to sell the struggling Bi W business which is failing to deliver returns and is seen as a “Basket case” by some investors. First Sentier Investors portfolio manager Dushko Bajic claims that the struggling supermarket group whose growth is trailing archrival Coles and the likes of Kmart, should ditch its discount chain Big W and spin off its New Zealand division. Speaking at an investor forum in Sydney this week Bajic claimed that Big W had only turned a profit twice over the past decade and delivered just $14 million of earnings on $4 billion of sales during the past financial year.
He said he hoped the new management would run down existing leases on the Big W stores, rather than hope for its profitability to rebound. Several suppliers to Big W claim that the Companies consignment model is not viable with some major consumer electronics suppliers refusing to supply Big W on their terms. Overall Woolworths sales growth has been slower than Coles and this has investors concerned especially as the business has been run by woke management who thought it was a good idea to not sell Australia Day memorabilia and fly aboriginal flags instead of the Australian flag on Australia Day.
The AFR reported that investors are complaining that the country’s largest supermarket operator is too complicated compared to its smaller rival, which has drastically simplified its operations to focus on groceries and liquor. Amanda Bardwell CEO Woolworths Now Woolworths’ new chief executive Amanda Bardwell is facing calls to divest the company’s Big W business, which has been up for sale before. The only problem is that those Company who did explore a purchase walked away declaring the business was not viable.
Bajic described Big W as a “business within the [Woolworths] portfolio that’s just destroyed capital”. Big W has struggled to generate strong returns for investors with management now desperate as their archrival Kmart delivers returns for Wesfarmers. Kmart is a key asset for Wesfarmers’ retail divisions having in the last year, expanding its popular Anko product range, which it designs and distributes to its stores and others.
Kmart sales rose 4.4 per cent to $11.1 billion in the 12 months to June 30, while earnings jumped 25 per cent to $958 million.
In contrast the Woolworths owned Big W saw profits fall 90% despite heavy promotions. The Company that recently saw several CE brands quite due in part to high theft rates saw EBIT declined 90% in F24 from $145M in 2023 to $14M at the end of the financial year 2024. Sales also fell 3.
9% to $4.685B from $4.785B in 2023.
SMs Bardwell, who had previously run the company’s e-commerce division, has taken the top job at Woolworths and is now responsible for cleaning up the mess left by outgoing CEO Brad Banducci. Recent Woolworths accounts show sales at its local supermarkets – which accounts for 88 per cent of the company’s earnings – had grown just 1.8 per cent in six months.
At Coles, they rose 5.2 per cent..
