Yahoo Finance One third of Big W stores could be forced to close
Up to a third of Big W stores could be forced to shut their doors should the major retail’s poor performance fail to improve.
A new report from Macquarie Wealth Management warned Woolworths Group would need to close 60 Big W stores, The Australian reported.
But as Big W will be profitable in the future, the firm shouldn’t close the business entirely.
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“Partial closure of most unprofitable and shorter-lease stores (is) more likely,” Macquarie said in a client note.
“Given significant closure costs for the portfolio, a more likely scenario is Woolworths to close up to one-third of its stores in our view.”
Macquarie observed that a large proportion of Big W stores are also in regional areas.
“It is unlikely these locations will enable Big W to regain the momentum required for profitability.”
Woolworths is set to provide a trading update in the next few weeks about Big W.
Big W lost $110 million in the last financial year and another $8 million in the first half of 2019.
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