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.
Related story: Shoppers: Are you guilty of making this $384 mistake?
Related story: How to make some fast money by KonMari-ing your home
Related story: 6 suburbs where Aldi’s biggest rival is landing
“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.
Make your money work with Yahoo Finance’s daily newsletter. Sign up here and stay on top of the latest money, property and tech news.