Three years and one pandemic later,Catch’s growth story is looking more like a saga. Since its purchase,the business reported an inaugural full-year profit of just $1 million in 2020,before posting a $46 million loss in 2021 and a $44 million loss in the first half of fiscal 2022. And though the business’ revenue started strong,in the last half it fell by 4.3 per cent.
Last week,Wesfarmers announced Catch’s managing director - former Amazon executive Pete Sauerborn - would depart and the business would be moved out of its Kmart division into a new data and digital arm called OneDigital.
From the outside,it appears Wesfarmers is moving to restructure and hopefully stem its losses at Catch. But a key question remains:why,during a period whenonline shopping has seen rampant growth,is a business like Catch struggling at all?
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The answer,according to some familiar with the business beforeWesfarmers’ purchase, is an erosion of the very start-up culture lauded by Scott. Like many start-ups,Catch was tightly focused on costs and ran as a very lean business - a stance inherently at odd with a heavily corporatised,governance-focused conglomerate such as Wesfarmers.
Following the purchase,a steady stream of new managers and consultants were brought in to help run the business and manage its new requirements as an entity of one of Australia’s largest listed businesses. These new hires,all on respectable salaries,rapidly increased Catch’s headcount and its costs,eating away at the business’ bottom line.
It was also,reportedly,difficult to get Wesfarmers’ different divisions - the operations of which are famously kept very separate to each other - to come to the table to discuss how Catch could benefit the broader group,something that the conglomerate may now have acknowledged with the move to put Catch under OneDigital.