Going off script: how the $1.7b Bunnings UK disaster unfolded
Before consigning its costly unsuccessful foray into Britain’s home improvement sector to a footnote in Wesfarmers’ largely illustrious history it is worth trying to understand how it got it so wrong.
It’s certainly something chief executive Rob Scott and his board will be working through given that Wesfarmers hasn’t ruled out another venture in offshore markets in future, despite the obvious near-term limitation to its licence to expand via large-scale acquisitions in new markets imposed by the Homebase disaster.
While there are some broad parallels with Woolworths’ disastrous attempt to challenge Wesfarmers’ Bunnings dominance of the local home improvement sector, the core reasons for the costly – $1.7 billion – failure of Bunnings in the UK are quite different to those that destroyed the Masters experiment.
Masters was a joint venture with Lowe’s, a big North American retailer supposed to bring home improvement expertise and supply arrangements to Woolworths but which failed to recognise that the seasons in Australia are different to those in its home markets. Sydney Morning Herald – Read more…