Retail update
Hastings Co-op store closures
Tool Kit Depot is building its first Tasmanian store and Tradelink up for sale
Mon Apr 15 2024
Hastings Co-op in the mid north coast of NSW has closed three of its stores: Mitre 10 & CRT Wauchope, Kew Rural Store and Comboyne Rural Store.
Its general department store in Wauchope will close in August. Co-op chief executive Nick De Groot said keeping the stores open would have cost more than $5 million over the next five years. He told ABC News:
It's a very difficult business climate at the moment. The three years of COVID, significant inflation, and then the interest rates movements have created a flat and fallen retail environment.
Mr De Groot said he could have ended up struggling with payment defaults if he did not close the three stores.
In Port Macquarie News, Mr Groot said that while he appreciated the announcement would affect staff, members and the wider community the Co-op's short and medium-term financial position demands immediate action.
A number of our businesses are under performing and, with the cost of doing business constantly increasing, and unavoidable unfunded capital expenditure in excess of $5 million over the next five years, we will not be in a position to continue operating without substantial structural reform.
Mr de Groot said the Co-op has begun consultation and offered transitioning support to affected staff.
Late last year, the Co-op was exploring options to tackle its financial challenges with one of those options being the sale of the Cedar Service Station and sale and leaseback of Wauchope IGA + Liquor. The future of the service station is still being considered but no immediate sale is planned.
Mr de Groot has previously spoken on the financial challenges when he first took on the CEO role in June 2023.
Related
Hastings Co-op has a new CEO - HNN Flash, April 2023Tool Kit Depot
A new Tool Kit Depot (TKD) store will be part of a retail complex that is already home to Bunnings, JB Hi-Fi, Officeworks and Petstock, in Launceston (TAS). It is expected to open by the end of 2024.
The Bunnings owned store will stock up to 10,000 products spanning tools, equipment, safety and workwear from brands such as Milwaukee, Makita, Husqvarna and Hard Yakka. It will also offer tool servicing and a repairs workshop. TKD general manager Trent Emmins said:
We're excited to confirm construction is underway for a new Tool Kit Depot store in Launceston.
It'll span over 1500sqm and create around 15 new jobs for Launceston locals who'll be on hand to help customers with expert advice. We know Launceston is home to many tradies who want the highest quality tools and work equipment at great value, and who are often fiercely loyal to their favourite brands.
Mr Emmins said TKD was excited to be adding to its 14 stores across Victoria, Queensland, South Australia and Western Australia.
We look forward to sharing more details with the community as construction progresses.
Tradelink
Speculation surrounds the possibility of Metcash acquiring bathroom and plumbing supplies business Tradelink after telling investors at its Investor Day that it saw significant growth opportunities in hardware, with complementary businesses and adjacent markets, and was focused on strategic growth opportunities for Mitre 10 and Total Tools.
According to a report in The Australian, it "stopped short of saying it was interested in buying Tradelink, but the plumbing supplies business ticks a lot of boxes for Metcash". It goes on to say:
The question, as always, is price, and whether it can succeed against industry heavyweight Reece. It is understood that industry groups Reece and GWA have already passed on the Tradelink opportunity, after being sounded out.
Background
Fletcher Building announced in February it would explore a sale of its plumbing supplies business Tradelink after telling the market that it had written down Tradelink's carrying value by NZD122 million (AUD114 million). At the time, it said further ownership of the business was not in line with objectives.
Tradelink competes with much larger rival Reece in the plumbing category and sells products such as vanities, bathrooms, toilet fixtures and fittings for bathrooms, kitchen and laundries. It remains the second-largest player in the market.
The business is valued by Fletcher at about NZD150 million (AUD141 million) and some industry analysts have suggested it could achieve a price of about AUD200-AUD300 million.
Fletcher inherited Tradelink as part of its acquisition of its Crane Group in 2010 for AUD740 million. Banking sources told The Australian that Tradelink being sold off comes after the company has made unofficial efforts to sell Tradelink in past years.
Related
Tradelink put on notice by Fletcher? - HI News, November 2016