Woolworths pulls the pin on hardware two years too late

He then said it was clear the Masters business can not afford to continue losing $200 million a year.

“In keeping with the spirit of the joint venture we have actively been engaging with our partner, Lowe’s, on this issue”, he said. The business will continue to trade through the period.

Woolworths chairman Gordon Cairns said in a statement today the company could not “sustain” Masters’ losses and it would be sold or wound up.

Woolworths has been battling a step-up in competition brought about by new entrants such as Aldi, contributing to three profit forecast downgrades past year.

“The agreement requires this to happen before Woolworths may exercise its call option.

As a result, Woolworths intends to exercise its call option to acquire the 33.3% stake held in by Lowe’s, which will allow us to control the exit process”, the release said.

“Woolworths’ top priority is to do the right thing by our employees, suppliers, customers and shareholders, and we will act quickly and openly to minimise the impact of this decision”.

Six month ago at the Parafield Airport’s store’s sod-turning ceremony, Treasurer Tom Koutsantonis was upbeat about Masters’ plans to expand throughout Adelaide.

Aside from leaving a potentially enormous hole for Bunnings stores to fill, the hardware giant is thought to already be eyeing key Masters sites for its own expansions.

In a statement Woolworths said the sale would allow it to focus on its core business of food, liquor and general merchandise.

It was the ninth Masters store to be opened in NSW and at opening employed more than 100 staff.

Masters has 59 stores in Australia, with its biggest presence in Melbourne and Sydney metro areas.

Wesfarmers is buying Homebase, the British home improvement retailer and garden centre, for £340 million ($704 million).