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Department store chain Big W could be forced to close up to a third of its stores around Australia.
Due to falling profits, the popular store is reportedly looking to shutter around 60 of its 183 locations.
Macquarie Wealth Management revealed the news in a client note last week, stating that they ‘may close’ 60 stores Australia-wide after losing $110 million last financial year and $8 million in the first half of 2019.
‘Partial closure of the most unprofitable and shorter lease stores is more likely,’ Macquarie said in the note, published in The Australian.
‘Given significant closure costs for the portfolio, a more likely scenario is Woolworths to close up to one-third of its stores (60 stores), in our view. This cost could be around $759 million.’
The company has not yet revealed which stores could be affected by the closures.
Woolworth Group, the parent company that owns Big W, said a national review of the store network and its distribution channels is underway.
‘The review is ongoing and no decisions about our network have been made,’ the company said in a statement.
‘We will update our team members and the market once the review has been completed.’
While the exact locations for closures is unconfirmed, regional areas are expected to be hit the hardest.
‘It is unlikely these locations will enable Big W to regain the momentum required for profitability,’ Macquarie added.
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