The supermarket giant will take a $370 million hit in its full-year results as a result of the store closures, which will include $270 million in lease and exit costs.
The news comes as it was confirmed last month that the company had lost $110 million last financial year and $8 million in the first half of 2019. It prompted Macquarie Wealth Management to suggest that closing a third of their stores could be on the cards.
Macquarie also suggested that regional stores would be most at risk, saying: ‘It is unlikely these locations will enable Big W to regain the momentum required for profitability.
‘In a challenging retail environment, we see a reduction in store count as the most likely outcome from the review. Given the format of Big W stores, we believe it would be difficult to reduce space as Myer is doing and that outright store closure is more likely.’
At present, there are around 30 stores located in rural and regional areas around Australia - leading local papers to question whether the Big Ws situated in their specific areas will be affected.
Said regional NSW paper the Daily Liberal: ‘Dubbo could soon be without Big W if a review finds the poor performing retail chain would be better off shutting up shop in the city.’
Added NSW’s Central Western Daily paper: ‘Could it be lights out for Big W in Orange?’
However, now Woolworths are claiming that all stores have been included in their review.
‘We want to emphasise this review has never been focused solely on our regional stores but our entire network. Details of store closure locations will not be released due to ongoing discussions with landlords. In the interim all BIG W stores will continue to trade as normal,’ their statement reads.
‘The majority of our store network is set to remain open and we’re committed to doing the right thing for our team in impacted stores.
‘We will inform our team members, customers and community stakeholders well in advance of changes to any specific store.'
