Masters flags early closure as fire sale wraps up

THOSE unhappy with Masters’ sale so far will be chuffed to know it’s now slashing prices by up to 70 per cent off on new deliveries.

WITH exactly five weeks until Masters shuts its doors for good, liquidators are ramping up discounts to 70 per cent and offering bargains on last-minute deliveries of summer goodies like BBQs and patio furniture.

The official final trading day for Woolworths’ failed hardware chain is scheduled for 11 December, but Mike Whitfort, spokesman for liquidators GA Australia, said it would be a “miracle” if it lasted that long.

Regardless of when the stores actually close, all Masters staff will be paid up until December 11, meaning many will get an early Christmas holiday. Woolworths has offered to deploy all 7700 Masters employees into other parts of the business.

Mr Whitfort said just under 75 per cent of stock had been sold. GA Australia is a subsidiary of Great American Group, which purchased Masters’ stock for $500 million in a deal announced in August.

“We are actually well ahead of schedule,” he said. “I’ve been quite surprised how well the stock has sold down across all categories. They haven’t given me the final dates yet but at the current run rate we’re going to run out of stock certainly before five weeks.”

Mr Whitfort said the minimum discount in-store was now 40 per cent going up to 70 per cent, with around 15-18 per cent of stock discounted at the highest level. He said discounts would ramp up past 70 per cent soon.

“I’m assuming we’ll get to the point where we just need to get everything out of the store and [will] discount appropriately,” he said. “We can’t be far away from that.”

Mr Whitfort said the timing of deliveries ahead of BBQ and outdoor season and just before Christmas meant customers would walk away happy.

“There’s still a lot of good stuff,” he said. “A lot our last deliveries were things like BBQs, patio furniture, tools, so there’s a lot of good stock left but we are well progressed on the sale.”

But he said GA and Woolworths were doing their best to limit any negative effects of the fire sale.

“A lot of stuff at 40 per cent off you never get a discount on anyway in any retail outlet,” he said. “Some of the BBQs, tools and power tools, generally they don’t discount a lot.

“We’re in some ways trying to protect the suppliers that normally don’t discount at all. We’re trying our best to maintain the relationships by not going too deep at this stage.

“We don’t have an obligation there but we’re trying to be a good citizen. Woolworths do have ongoing business. This is a closing down sale, but Woolies are certainly not closing down, so it’s being handled a whole lot differently to what you’d probably call a Dick Smith-type closing down sale.”

He said provided things progressed as they were, GA would walk away with a profit. “We’re the last fed, I suppose,” he said. “Really it’s up to the last component [of the sale] what we finish up with.

“But certainly all the guarantees with Woolworths that were promised will be met. They’ll certainly have an outcome that is as reported or possibly better.

“Everybody should be happy at the end of the sale. All the stock will be gone, GA will make some money provided we finish the way we’ve been going, and the general public walk away with good bargains. In these circumstances that’s a good outcome.

“A lot of experts were saying sausage sizzles were the way to sell down products, that we weren’t doing deep enough discounts, and so on. I think the results are going to prove that the process has been very professional and very good.”

On Masters staff being abused by dissatisfied customers, Mr Whitfort said there had been “isolated incidents but nothing that’s been a major concern”, and security staff had been deployed in stores.

During Wesfarmers’ first-quarter trading update last month, Bunnings boss John Gillam said it was still unclear what effect the Masters sale would have on its bottom line in the second quarter.

“It’s a hard one to predict,” he told analysts. “In February we talked about the risks of an unprecedented liquidation event, we thought [at the time it] would be in May-June.

“There’s unquestionably an unprecedented element to what’s going on and there is no transparency over what is being liquidated. Your guess is as good as ours as to what comes next.”

Bunnings’ total sales for the quarter were $2.7 billion, up 7.4 per cent year-on-year, despite the impact of Masters’ liquidation. Total store sales for the quarter increased 7.3 per cent, while same-store sales growth was 5.5 per cent.

“Across many parts of Australia, trading in the quarter was tempered by wetter and cooler weather conditions relative to the prior corresponding period,” the company said.

“As foreshadowed at the time of the full-year results release, the latter part of the quarter was also affected by the stock liquidation activities of the Masters business, with this disruption continuing in the second quarter.”

Mr Gillam had earlier confirmed the hardware chain’s “beat it by 10 per cent” price guarantee would not apply during Masters’ fire sale.

“It may be unlawful, and is not responsible, for us to price match or beat stock liquidation prices where large volumes of stock are sold below cost,” he said in August.

“We believe this undermines our focus on delivering long-term value for customers, and may damage competition in the industry as a whole.

“Our price guarantee has supported our policy for over two decades, so ‘if you happen to find a lower price on a stocked item, we’ll beat it by 10 per cent’. This has always excluded trade quotes, stock liquidations and commercial quantities.”

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