Woolies ‘mistake’ Lowe’s fault: Roger Corbett

Roger Corbett labels Lowe’s claims of hardware experience a “disgrace”, after ending his Woolworths role.

Roger Corbett says Lowe’s claims of hardware experience were an ‘absolute disgrace’.

Roger Corbett, who led Woolworths through its golden age when it outmanoeuvred Coles and ruled the supermarket sector, has labelled the retailer’s disastrous foray into hardware through Masters a “massive ­strategic mistake”.

However, Mr Corbett sheeted most of the blame on to Woolworths’ US partner Lowe’s, labelling its claims of experience in the hardware sector an “absolute ­disgrace’’.

Speaking to The Australian yesterday after declaring he would end his consultancy role with the Woolworths board after only seven months, Mr Corbett also said the retailer’s loss-making general merchandise chain Big W could shine once more and that the leading supermarket retailers — Woolworths and Coles — could beat German discounter Aldi at its own game.

Mr Corbett said he was unable to continue his consultancy arrangement because of the major expansion of Mayne Pharma, of which he is chairman. Yesterday Mayne outlined a plan to acquire a portfolio of US generic drug products for $880 million.

He even had a kind word for former Coles boss Ian McLeod, whose leadership and transformation of the once struggling grocery chain from 2008 to 2014 helped supercharge Coles’ earnings to the point where Woolworths is now staring at posting its first full-year loss in 23 years.

But the former retailer turned company director saved his harshest criticism for Woolworths’ decision seven years ago, under former chief executive ­Michael Luscombe, to break into the hardware market through a joint venture with US giant Lowe’s, which proved a costly ­fiasco for shareholders.

“Well, I had nothing to do with Masters, either in the consultancy arrangement or in its original (formation), but Masters was clearly a massive strategic mistake and it was extremely poorly executed, extremely poorly executed,’’ Mr Corbett told The ­Australian.

Woolworths is still trying to extricate itself from the Masters misadventure, negotiating to buy back Lowe’s one-third stake in the business and then either sell the retailer or close it down completely. Woolworths has been forced to write off more than $3 billion linked to the Masters experiment.

Mr Corbett, a former director of US retail giant Wal-Mart, fired off a stinging criticism of Lowe’s, the US hardware giant that was supposed to help Woolworths succeed and navigate in the Australian hardware sector but failed in the most basic tasks, such as recognising seasonal differences between the northern and southern hemispheres that would impact what products needed to be sold during the Australian winter and summer.

“Lowe’s was a partner there, they were the hardware experts,’’ Mr Corbett said, “and I think … clearly Woolworths were relying on the expertise of Lowe’s and the execution was an absolute disgrace and it caused a terrible problem for (Woolworths) shareholders.’’

Current Woolworths chairman Gordon Cairns appointed Mr Corbett as an adviser to the company’s board in November last year, with directors and senior executives hoping some of the shine from his years as boss of Woolworths during its golden age would rub off on the retailer.

His position was then described as a “mentor to senior management”, having been chief executive of the supermarket giant from 1999 to 2006. Mr Cairns yesterday said Mr Corbett had assisted him in the role “and has provided the benefit of his vast experience and passion for Woolworths”.

Mr Corbett said he believed Woolworths’ struggling supermarkets business could be turned around to once again be competitive with arch rival Coles, and he also hinted that his preference — and advice to the board — was to keep underperforming general merchandise chain Big W rather than dumping it.

He said Big W’s recent ills were caused by bad management.

“Big W has been an excellent asset in the past and there is no reason (it can’t succeed) if it’s well managed in the future. (Big W) had a wonderful position in the market and was clearly the market leader with everyday low prices. It was by far the biggest and most profitable out of Target, Kmart and Big W — and it’s only bad management that it put it where it is today.”

In the December half sales for Big W slid 3.9 per cent to $2.27 billion.