Woolworths nails sale of Masters hardware chain holding company

Woolworths has issued a statement to mark the sale of its shares in the Masters hardware chain to property developers.

The site of the former Masters hardware outlet at Springfield. Picture: Richard Walker.

Woolworths has quietly put the final nail in the coffin of its failed hardware chain Masters, issuing a simple statement yesterday to mark the completion of the sale of its shares in Masters’ holding company to property developers that will turn the vacant Masters sites into new shopping locations.

After six years of rolling out Masters across Australia, billions of dollars in losses, messy court cases and the ejection of the chief executive who led the hardware strategy, Woolworths issued a one-paragraph statement to the ASX yesterday to announce it had exited the venture.

Although the last Masters store closed late last year in a massive $700 million fire sale of hardware stock, the company entity, known as Hydrox Holdings, still limped on as Woolworths and its former partner in the Masters chain, US hardware giant Lowe’s, fought over its closure and ­liquidation.

The spat went to court and then arbitration after Woolworths agreed to sell the Masters sites to property develop­ment group Home Consor­tium for $750m, handing over 82 sites for redevelopment.

An independent expert had to be called in to decide on the value of the 33 per cent stake of Hydrox held by Lowe’s, which Woolworths would buy back so it could sell 100 per cent of Hydrox to Home Consortium.

The one third share held by Lowe’s was acquired in August for $250.8m.

That sale has now been completed, with Woolworths exiting finally from the disastrous hardware venture that cost its shareholders more than $3.5 billion.

Woolworths had previously said the capital losses associated with the sale of Hydrox were about $1.8bn. The failure of Masters also cost then Woolworths chief executive Grant O’Brien his job, with other ­executives linked to the hardware chain also departing after years of promises that the stores would turn profitable never eventuated.

David Di Pilla, the former UBS Australia managing dir­ector and architect behind an ambitious plan to turn 82 Masters hardware sites into new shopping destinations, is preparing to refit the hardware stores to house retail chains such as JB Hi-Fi, The Good Guys, Amart Sports, Spotlight and Chemist Warehouse.