Woolworths could walk away with $1 billion in cash to plough into its struggling food and discount department store chains, after chairman Gordon Cairns abandoned the retailer's ambitions of becoming a force in the $45 billion home-improvement market.

Mr Cairns confirmed on Monday that Woolworths would sell or wind up the loss-making Masters chain and look for buyers for the profitable Home Timber & Hardware business, once it had bought out its US-based joint venture partner, Lowe's Companies.