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One third of Big W stores could be forced to close

Image: AAP

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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