Australian conglomerate Wesfarmers has revealed that it will terminate the operation of its online retail business Catch in the fourth quarter of the fiscal year 2025 (FY25).
Catch’s e-commerce fulfilment centres will be integrated into Kmart Group, with digital capabilities from Catch absorbed into Wesfarmers’ retail divisions.
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The shift aims to eliminate the losses from Catch operating independently while enhancing the omnichannel offerings of the retail divisions.
Wesfarmers managing director Rob Scott stated: “The recent increase in competitive intensity in the Australian e-commerce sector has affected Catch’s financial performance and growth prospects. In this environment, the group’s retail and health businesses, with their leading omnichannel offerings and trusted brands, are better positioned to respond as the market and customer expectations evolve.
“These businesses are supported by extensive store networks, leading e-commerce platforms, the group’s shared data asset and complementary loyalty and membership programmes, including OnePass. Together, these elements provide the opportunity to cost-effectively scale the group’s customer propositions, helping create shareholder value.
The transition will involve transferring Catch’s e-commerce fulfilment centres located in Moorebank, New South Wales and Truganina, Victoria, to Kmart Group during the fourth quarter of FY25.
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By GlobalDataThe shift to centralised fulfilment is expected to boost both customer experience and operational efficiency in Kmart Group’s e-commerce operations.
Kmart Group managing director Ian Bailey said: “Kmart Group can better utilise Catch’s fulfilment centres, which are currently less than 50% utilised. The transition will result in faster deliveries to customers at a lower unit cost while relieving pressure on our busy stores.”
The impact on Kmart Group earnings in 2026 is projected to be positive yet modest, and is anticipated to grow as online sales increase.
Post-wind-down, select digital capabilities from Catch, including specialist personnel and supplier networks, will be assimilated into other retail divisions within Wesfarmers.
Wesfarmers plans to provide a detailed update on the Catch wind-down process at its Strategy Briefing Day in May 2025.
The company forecasts one-off costs ranging from A$50m ($31.16m) to A$60m related to Catch’s closure and transition, which will be reflected in the second half of its FY25 results.
These figures do not account for operating losses incurred during trading in that period. Between A$25m and A$30m of these costs are expected to be non-cash expenses.
Catch is also projected to report an operating loss before tax of A$38m to A$40m for the half-year ending 31 December 2024. These figures exclude any one-off costs linked with the wind-down and transition.
