Woolworths insists the sale of its beleaguered hardware chains will go ahead as planned despite its partner in the venture, US hardware giant Lowe’s, fronting court on Monday accusing the company of acting in “bad faith”.
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Two sites in Ballarat – Masters Home Improvement at Wendouree and Davies Rural and Hardware at Creswick – depend on the deal.
Woolworths moved on Monday afternoon to quell concerns Lowe’s Federal Court Action would scupper the deal, which saw the company’s home hardware interests sold off to investors including Mitre 10 owner Metcash.
Lowe’s owns about 33 per cent of the Masters joint venture company Hydrox Holdings.
Under the deal announced by the retail giant last week, Home Timber and Hardware would be sold to Metcash as an ongoing concern while Masters stores would close by December 11.
The majority of the Masters sites, including the Masters at Wendouree, would be sold to Home Consortium and repurposed as large-format, multi-tenant retail stores.
A spokesperson for Woolworths said both the sale of HTH and inventory clearance of Masters to auction house GA Australia would proceed as planned.
The sale of Woolworths’ hardware businesses is expected to make the company about $1.5 billion.
The exact date of closure for the 63 Masters stores is unknown, and will depend on how quickly stock is cleared.
Lawyers for Lowe’s on Monday requested the court appoint an independent liquidator to "oversee the equitable and orderly wind up" of the joint venture company Hydrox Holdings.
In a statement, Lowe’s said Woolworths had managed Hydrox in “a manner oppressive and unfairly prejudicial to Lowe's, including by wrongfully and in bad faith seeking to terminate its joint venture agreement.”
A spokesman for Home Consortium said the company remained confident in its contract for Hydrox Holdings, and that the timeframe for the projects was unchanged.
Home Consortium announced the purchase of Hydrox, including about 80 Masters stores, on the same day Woolworths announced Masters’ closure.
The company expects to re-open the sites as large-format retail stores in the second quarter of next year.
More detail on the site plans is expected to be released in late September.