Australia's Woolworths to close MyDeal customer website to cut losses
June 27 (Reuters) - Australia's largest supermarket chain Woolworths (WOW.AX), opens new tab on Friday announced plans to close its majority-owned customer website MyDeal by the end of September, in an effort to reduce operating losses in its marketplace business.
Woolworths CEO, Amanda Bardwell, said the decision was a response to the intensely competitive environment and the superior economics of marketplaces integrated into retail brands.
"The closure of MyDeal will lead to a meaningful reduction in Woolworths MarketPlus operating losses once completed."
The company anticipates cash closure costs between A$90 million and A$100 million ($58.91 million to $65.46 million), and non-cash impairment charges of A$45 million related to MyDeal's assets.
"We estimate MyDeal represented ~A$20 million of our A$65 million forecast loss for the MarketPlus and HealthyLife segment in FY25. The closure should therefore result in lower losses for this segment from FY26," Citi analysts said in a note.
Woolworths offered to buy an 80% stake in the online retailer in a deal worth A$217.4 million in May 2022. The acquisition, completed in September that year, was a bid to compete with online retail giants operating in the country, including Amazon.com.
MyDeal was among the Australian firms to have suffered cyberattacks since late September 2022. The online retailer identified that a "compromised user credential" was used to access its systems, exposing email addresses, phone numbers and delivery addresses of about 2.2 million customers.
Separately, Australia's biggest non-food retail group Wesfarmers (WES.AX), opens new tab said in January that its loss-making online retailer, Catch, would cease to operate as a stand-alone entity in the fourth quarter of fiscal 2025, as it struggled to adapt to the changing market landscape.
($1 = 1.5277 Australian dollars)
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