Wesfarmers (ASX:WES) Announces Strategic Wind Down of Catch
Wind Down Announcement
Wesfarmers (ASX:WES) has declared the decision to cease Catch’s operations as a standalone business by the fourth quarter of the 2025 financial year. This strategic move involves the transfer of Catch’s e-commerce fulfilment centres to Kmart Group and select digital capabilities to its retail divisions. The transition aims to eliminate losses associated with Catch and enhance the omnichannel services offered by Wesfarmers’ retail divisions.
CEO Commentary
Wesfarmers Managing Director Rob Scott stated, “While Catch’s financial performance has been challenging, we have gained valuable insights and capabilities that have accelerated the Group’s digital transformation.” He added that the current competitive e-commerce landscape positions the Group’s retail and health businesses better for market and customer evolution, capitalising on extensive store networks and shared data assets.
Transition Details
The e-commerce fulfilment centres located at Moorebank, New South Wales and Truganina, Victoria will transition to the Kmart Group by the end of the fiscal year. Kmart Managing Director Ian Bailey remarked that the move optimises the currently under-utilised fulfilment centres, leading to faster deliveries and a better customer experience.
Cost and Performance Outlook
Wesfarmers anticipates one-off costs associated with the wind down of Catch to range between $50 million and $60 million, which will affect the second half of the 2025 financial year. Catch is projected to report an operating loss before tax of $38 million to $40 million for the first half of 2024.
OneDigital Update
The Group’s OneDigital initiative continues to enhance its data and digital strategies across the retail and health divisions. The OnePass membership program is driving increased shopping frequency and sales, aided by a shared data asset featuring over 12 million customer records. OneDigital is also advancing the development of a retail media network, with an expected operating loss of approximately $70 million for the 2025 financial year, reflecting increased investments in retail capabilities.
Motley Fool contributor Abbie Stokes has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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