Exiting the home improvement business by Woolies has not only left thousands of employees with an uncertain future, but also around 63 empty Masters Warehouses. No one knows what the fate of these huge stores is going to be. Will competition buy them? Will global retailers use this as an opportunity to either enter into or expand in this market, or whether, they will stay there abandoned forever. Let’s find out.
News.com.au reports that on an average Masters stores are around 13,000sq m in size. The chain has an unfinished store in Nowra in New South Wales, which is worth $14 million approximately. There are 62 other stores out there. The website believes that they form interesting assets for anyone (domestic or international player) trying to enter or expand their business in Australia.
Trevor Evans, Chief Executive, National Retail Association told news.com.au that it will be interesting to observe the kind of players that come forward to snap up the space. “I think the closure of Masters is potentially a big opportunity for a lot of people, including domestic players and international companies who are watching Australia and might be considering opening their first store here,” he said.
Bunnings is a serious contender in this race. According to Sydney Morning Herald, a merger between Danks and Mitre 10 is the only way to clamp down competition from Bunnings. In fact, John Dahlsen, Former Woolworth’s Chairman has urged the Australian Competition and Consumer Commission (ACC) to give their nod in case Metcash’s Mitre 10 offers to buy Woolworths’ Danks and Home Timber & Hardware businesses. However, as of now, there is no confirmation on this merger.
The rationale behind this request is that Bunnings is set to become a massive player in the DIY market. This will mean an end to small or medium sized independent players. It might also result in suppliers not getting good deals from the chain.
The Australian reports that Bunnings is already eyeing 15 Masters’ sites, should Woolworths decide to liquidate the chain. Supermarket chain Costco and Swedish retailer Ikea may also be gearing up for a shopping fest. In addition, retailers like Harvey Norman, Fantastic Furniture and Chinese property developers, wanting to build apartment complexes and towers could join the race for Masters’ sites.