Big W begins to shut the first of 30 stores across Australia
Big W is starting to close the doors of up to 30 stores as it battles Australia’s retail woes. There are bargains to be had, indeed, but it has also angered customers.
With his kid in tow, Kamil Adhakary is on the hunt for a bargain. Problem is there’s not much to nab as he paces up and down the few remaining, and increasingly barren, aisles of his local Big W.
What’s left is a hardly enticing. On a shelf the only things to buy are a few scattered plastic champagne flutes and some craft glue – now 75 per cent off. They look like the discount department store equivalent of the last kids to be picked for the school soccer team. Lonely; a bit awkward.
“I’m looking for toys for my boy, but look at it, it’s all gone. It’s not good,” Mr Adhakary tells news.com.au at the almost empty store in Auburn, in Sydney’s west.
“I’m very disappointed it’s going.”
Another says the store now looks “sad”. One customer is more direct, accusing Big W of “abandoning” her neighbourhood, which will be left without a similar retailer.
RELATED: Suburban stores in Big W firing line
RELATED: Why so many retailers have gone bust
RELATED: Australia’s retail bloodbath as brands rocked by mass closures
The reason for the sorry looking state of the store is that it will shut for good in days. The Auburn store, along with two others nearby in Chullora and Fairfield, are the first three of as many as 30 Big W stores nationwide to be closed as the retailer attempts to turn around an $85 million loss in the face of savage competition from the likes of Kmart and H&M.
Around 90 staff in each store are affected, while the closure process will put a $370 million dent in the company’s profit.
Yet, almost 10 months after announcing the “store review”, Woolworths Group, which owns Big W, is still to name the remaining 27 branches that will close. Expect those locations to be revealed imminently.
It comes in the middle of a very unhappy New Year for Australian retail.
In January alone, speaker maker Bose and educational retailer Curious Planet announced all their Australian stores would close, discounter Harris Scarfe will axe 21 department stores, fashion retailer Bardot will close 58 shops and EB Games will exit 19 shopping centres. Just last week, mall staple Jeanswest entered voluntary administration.
Big W bigwigs insist the chain has a future and some pruning of the store network will help “to accelerate the path to profitability”.
The three doomed Big W stores will bring their shutters down for the final time on January 31. But in Auburn, the vast majority of the store is already sealed off.
Barriers prevent customers from getting any further than the aisles nearest the checkout.
One sign simply says “technology is now closed”. Beyond the barriers, the lights are still on and signage still hangs from the ceiling directing people to babywear, DIY and the lay-by counter. But the shelves have been stripped.
In one cranny was the optometrists, a market Big W entered to wrestle some share from the likes of OPSM and Specsavers. But there are no longer any specs to inspect.
Where customers can still browse is enough to make the fastidious have a fit. Some shelves are empty, elsewhere hundreds of books are haphazardly piled.
Other shelves are a mishmash of random unsold items – boxes of staples near poached egg rings, phone cases and dog toys.
One woman lazily picks up a pair of purple children’s sunglasses – just $2 – and then places them back on the shelf between a stack of licorice wheels and a printer cartridge.
“It looks awful,” said Diana Pazmino, who has hopped over from Chullora to visit her mum.
“I’m looking for something for my daughter. I usually come to Big W for toys and the books.”
She said the chain seemed to suffer because Kmart had become trendier.
“But I prefer Big W. The quality is better here,” Ms Pazmino said.
Mr Adhakary also cited the quality of Kmart as the reason he chose this store. If everyone thought like them, perhaps this store would not be closing.
In a corner are DVDs aplenty. There are stacks of the panned 2017 Amy Schumer and Goldie Hawn comedy Snatched – 36 per cent on Rotten Tomatoes. There are so many unsold copies, it seems almost plausible the film could be single-handedly responsible for dragging Big W into loss.
‘BIG W ABANDONED US’
If you’re in the market for home beer kits, ornamental ceramic birds or hundreds, possibly thousands, of boxes of sticky yellow dots (not red or blue dots, just yellow) – Big W Auburn is a goldmine of cut-price opportunity.
One woman clutches a can of Frizz-Ease and a DVD. She’s frustrated, angry even, that Big W is leaving town. “They’re abandoning us here in Auburn,” she said.
Another shopper’s haul includes a bra and some laminating pouches. “I don’t want it to close, I enjoy coming here. I feel sad,” they said.
Big W’s closure will leave a hole in the local shopping centre. The nearest Kmart is 30 minute’s walk away, this in a suburb with lower than average car ownership. Big W is hoping people will make the direct train ride to the nearest store – some people news.com.au spoke to said that wouldn’t be happening.
A Big W spokeswoman told news.com.au it recognised “closing any store isn’t easy on our teams and communities”.
She said staff were offered redeployment to other stores or Woolies supermarkets and most took up the offer rather than leave.
“The purpose of Big W’s store review, announced in April last year, is to build a strong, profitable and more sustainable store and distribution centre network that reflects our customers’ needs and the rapidly changing retail environment,” the spokeswoman said.
Last year, Woolworths Group CEO Brad Banducci was even blunter, saying there was “no alternative” but to shutter a slew of the stores. Although he stressed that closing the chain altogether was not on the cards.
LIKELY MORE THAN 30 STORES WILL CLOSE
Investment back Citibank has said it expected further closures beyond the 30 announced or mooted.
“The closure of 16 per cent of the Big W network is unlikely to be the end of the store rationalisation profile,” the 2019 note said.
But, for retail optimists, there are positive signs coming from Big W. Its $85 million full-year loss in 2019 was an improvement on the $110 million loss in the previous year. Sales were up 4.2 per cent last year helped by clothing, online and click and collect.
“Big W can confirm we are on track with our turnaround,” the spokeswoman said.
However, gaming and DVDs – we’re looking at you Snatched – were still a drag on the bottom line.
Big W’s not alone. In recent years, even Kmart’s halo has dimmed. Sales in 2019 barely edged up and profits – which include sister store Target – were down by 13.7 per cent. Nonetheless, it still managed to add $540 million to the bottom line of owner Wesfarmers.
Big W is being cagey about the next stores to be given the flick, although it may announce the next clutch at Woolworths’ half-year results in February. The choice of the first three locations may give a clue for the next.
All are in relatively small centres in secondary suburbs overshadowed by major retail hubs. Auburn is just a short train ride from Parramatta, which houses one of Australia’s largest shopping centres.
Brian Walker, who runs the Retail Doctor Group consultancy, told news.com.au last year that Australia simply had too many shops. Changes in shopping habits, such as the growth of online, and stagnant wage growth had closed wallets.
“It’s a pincher effect. Large centres like Parramatta will get bigger. At the other end we will see a resurgence of community hubs with butchers, bakers and candlestick makers,” Mr Walker said.
“It’s in the middle ground that’s in the firing line. These are centres that are too big to be small and too small to be big.”
A sign above the Big W entrance shows some of the staff and offers a “big hello from your Auburn store”. In just a couple of weeks, it’ll be goodbye from Big W to Auburn forever. Grab a copy of Snatched while you still can.
Urgent recall after sofa caught fire
A reclining armchair has been recalled by authorities after a sofa overheated from an electrical default and caught fire.
Buy Now Pay Later to face harsh regulations
New legislation is holding Buy Now Pay Later providers to Australian credit licence standards in an attempt to protect consumers.
‘Double dipping’: $7m family feud explodes
A $7 million feud between two cousins has exploded in the Supreme Court, with their once close relationship souring amid the fight over their fashion empire.