Australia, insurance, car, home, live, holidays

“There has been a significant increase in competitive intensity in the Australian e-commerce sector,including from the entry and expansion of international competitors,which has impacted Catch’s ability to generate satisfactory returns over the long term.

“Standalone,broad-based marketplaces require significant scale and traffic to achieve profitability. International players are better able to leverage their global scale,networks and technologies compared to Australian-owned broad-based marketplaces.”

Wesfarmers’ other retail brands,which include Target,Officeworks and Priceline,have a more scalable and cost-effective offering than Catch as they have both physical and online stores,he added.

Catch’s e-commerce warehouses in Moorebank,NSW and Truganina,Victoria,will be transferred to discount giant Kmart,a move aimed at improving the experience for customers and lifting efficiency.

“Kmart Group can better utilise Catch’s fulfilment centres,which are currently less than 50 per cent utilised. The transition will result in faster deliveries to customers at a lower unit cost while relieving pressure on our busy stores,” said Kmart managing director Ian Bailey.

Wesfarmers purchased Catch.com.au in June 2019 for $230 million,and revenue and profits have slumped since then. Catch’s revenue in the 2020 financial year was $364 million,but this figure had fallen to $227 million for 2024. It is expected to report losses before tax of $38–40 million for the first half of the 2025 financial year.

Wesfarmers chief executive Rob Scott said Catch’s closure was in the best interest of shareholders.Credit:Trevor Collens

Wesfarmers will incur one-off costs of $50– $60 million for the wind-down that will be recorded in its second-half results. More details about the closure will be announced at the company’s strategy briefing in May.

Wesfarmers shares were 1.3 per cent higher,at $72.64,in late morning trading.

Phillip Kimber,an analyst and executive director of consumer and research at E&P,said Catch had struggled to be profitable,with losses peaking at $161 million in the 2023 financial year.

“Wesfarmers has been actively working to reduce the losses stemming from the Catch business;however,increased competition from other online marketplaces has made this increasingly difficult.”

The $82.1 billion ASX-listed giant is also in the process of trialling a new beauty retailer,Atomica,which is poised to challenge long-standing pharmacy chain Priceline.

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