Why shareholders are celebrating.
Woolworths chairman Gordon Cairns notified shareholders this morning that the company has cut the ailing Masters chain loose.
“Our recent review of operating performance indicates it will take many years for Masters to become profitable. We have determined we cannot sustain ongoing losses from this business,” Cairns said in a statement to the Australian Securities Exchange (ASX).
Cairns said Woolworths would either pursue an orderly prospective sale or wind up of the business.
“This important decision allows Woolworths to focus its energy and resources on strengthening and executing its plans in our businesses,” he added.
While Cairns said that the company would move “as quickly as possible” he advised that the put and call options process will take at least two months to complete and following this a potential sale process or other exit process will take additional time.
“The business will continue to trade through this period. Our top priority is to do the right thing by all stakeholders,” Cairns concluded.
As a result of the news, Woolworths shares are up 5.1% on Monday at lunchtime while the stock price of Bunnings’ parent company Wesfarmers is up 3.0%.
This story first appeared in Appliance Retailer.