Masters stock now 95% off as staff watch Woolies’ failed hardware chain take last breaths

Masters – A failure of corporate governance?

Masters Home Improvement stock is now up to 95% off as the hardware chain enters its final four days of trading, with Woolworths looking to recoup close to $700 million in the liquidation sale.

After a relatively brief five-year journey, Woolworths announced its plans to close Masters in August and GA Australia took control of liquidating all stock, with an end date set for December 11.

In the final days customers will be able to pick up the last pieces of stock for as little as five percent of their original retail prices.

December 11 still looks set to signal last drinks for the failed hardware business. The Australian reports this week that Woolworths has netted a positive result from the drawn out sale process, with an expected return of at least 90 cents in the dollar on the $700 million of products sold over the past four months. This compares to the retailer’s original expectation of recovering approximately $500 million from the sale process.

The Masters closure has involved no shortage of conflicts over the future of the relatively new warehouse sites, the execution of the liquidation sale and the pressure staff have been under since Woolworths announced plans to exit the chain in August.

Read more: Masters employees speak out about “aggressive” customer behaviour and “brutal” conditions in fire sale

At the time the retail giant promised to assist the more than 5000 Masters staff members with their future career plans, including the option to be redeployed into other Woolworths businesses. At the company’s annual general meeting in November it announced 3,600 individuals had participated in the process to assist them into new roles, and it’s understood around 1700 workers have been able to find new jobs. Management also expressed disappointment that they were unable to find a buyer for the chain, despite being able to sell its Home Timber and Hardware oeprations to Metcash.

Meanwhile, other retailers have had their eyes on the soon to be empty Masters sites, which Home Consortium purchased in the exit deal in August with a view to create big-barn style homemaker retailers including a number of brands. This has taken its own series of twists and turns, with landlords for the sites reported to be considering legal action as recently as mid-November over whether Masters had the right to hand the stores across to Home Consortium.

Woolworths has spent the past few months locked in a legal battle with its venture partner Lowes over the closure, after Lowes launched action in the High Court for “oppressive conduct” of its partner in the termination of the joint venture. This issue was then sent to confidential arbitration.

Staff “stronger” for the journey

The internet product portal and customer service phones have been shut off at Masters over the past month, raising the ire of some shoppers who have had to go into store to determine what liquidation stock was still available. At the time, staff said this put further pressure on the already falling morale of teams across the country, many of whom were staring down unknown futures in the lead up to Christmas.

Masters employees have previously told SmartCompany that working for the chain during the closedown period has been a stressful and confusing process due, in part, to the nature of the liquidation sale, which meant individual item pricing was put well out of their control.

Some customers have complained about rudeness and poor attitudes from workers, while other employees and their family members have pointed out some of the ridiculous requests made by customers at a time when the whole business was about to fold.

Last night on social media, one family member of a Masters employee penned an open letter of support for workers at the hardware chain, explaining that news about the future of the chain changed multiple times over the past couple of years, and that the shutdown process has affected the families and communities of all involved.

“The last 3 months have been the worst. The wonderings of the future – will we survive? We might survive! There’s a prospective buyer – oh no it’s fallen through? and then the final word, this is it, doors are closing 11/12/16,” Keira Skeet wrote on Facebook.

“Be it cost to family, emotions, physical or mental wellbeing, all of it has been a cost in some way or another.”

Skeet, whose sister worked for the chain, says many employees have been strengthened by what they’ve seen over the past few months, despite it being a very taxing experience.

“All of the ups and downs, tears, sweat, blood…its [sic] all been worth it, to watch her become the soldier that she is now, irregardless [sic] of the emotion she will show on Sunday when the door is closed for the final time!”

Masters social media team thanked Skeet for her support in the final days, while several other shoppers, aware of the aggression and complaints received by Masters employees throughout the sale, have sent support to the staff members.

Over the past four months experts have told SmartCompany the closure process for a business as large as Masters is a very complicated process that is difficult from a stock management, employee morale, legal and strategic perspective.

The most important thing to maintain momentum with staff over these events is to ensure they look to the future, HR experts told SmartCompany at the beginning of the process.

“If [employees] know that you’re willing for them to take the next step, they know you’re not saying ‘you’re going to work really hard through this period with no next steps’,” Intercept Consulting HR specialist Louise Jensen told SmartCompany in September.



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