First Big W store closures unveiled

Three Big W stores in Sydney will close as Woolworths begins shutdowns of the struggling brand.

About 30 Big W stores are expected to close over the next three years. Picture: AAP

Woolworths has unveiled the first batch of Big W store closures, as part of its strategy to slash the discount department store’s network of sites across Australia.

Three stores in Sydney will be the first to be shut.

Big W staff were being briefed this morning on the closures, with stores in Sydney’s Chullora, Auburn and Fairfield to close their doors in January 2020. They will continue trading for the next six months.

This week The Australian reported exclusively that Woolworths would announce as early as this week which Big W stores it plans to close first, as it attempts to resurrect profits at the loss-making retailer.

Woolworths chief executive Brad Banducci announced in April that following a review of the struggling Big W, it had identified roughly 30 stores it would close over the next three years, as well as two distribution centres.

Analysts had predicted Woolworths could be forced to close down one-third of its 183 Big W stores at a cost of almost $800 million as losses at the network mount.

Woolworths told The Australian this morning that the purpose of the review was to build a strong, profitable and more sustainable store and distribution centre network that reflects its customers’ needs and the rapidly-changing retail environment.

“These are not decisions we take lightly and we regret the impact the closures will have on affected team members,” said David Walker, managing director of Big W.

“We would like to acknowledge the support of the communities of Chullora, Auburn and Fairfield and the hard work and commitment of our store team members.

“Supporting our team remains our priority and we are committed to doing the right thing by them,” said Mr Walker.

“Over the next six months, we will support our team and explore redeployment opportunities with team members who choose to continue their career at Big W or with other Woolworths Group brands in the months ahead.”

Big W also said it will continue to work with landlords over the coming months as part of the network review.

The Australian revealed this week that shopping centre landlords are already in talks to bring new tenants into empty Big W stores on Woolworths’ hit list.

With the first closures now confirmed, several shopping centre landlords in NSW and Victoria are preparing a charm ­offensive to allay the fears of nervous retail tenants who could suffer if a nearby Big W shuts.

The agents have begun talks with national chains and while at this stage no leases have been signed, the documentation is in train to ensure a smooth transition as the Big W stores close and vacant spaces begin opening up in regional shopping centres.

Big W posted a full-year loss of $110m for the 2018 fiscal year and a loss of $151m in 2017.

Big W recorded a loss of $8m for the first half of this year. The underperforming general merchandise chain is forecast to report a loss again for fiscal 2019, with the guidance indicating it would be under the $110m loss recorded in 2018. The chain in April booked $100m in asset ­impairments for the 2019 financial year, reflecting its poor trading performance.