Macquarie reports the final cost would ‘come down to the lease term remaining on these problematic sites and whether the landlord would accept a discount given potential for alternate use, etc.’
Locations for potential closures remain unconfirmed, but regional areas are expected to be hit hardest.
‘It is unlikely these locations will enable Big W to regain the momentum required for profitability,’ Macquarie said.
‘In a challenging retail environment, we see a reduction in store count as the most likely outcome from the review. Given the format of Big W stores, we believe it would be difficult to reduce space as Myer is doing and that outright store closure is more likely.’
Parent company Woolworths has advised that no final decision has been made yet.
‘At our half-year results in February we announced a national review of our Big W store and distribution centre network,’ said a rep.
‘The review is ongoing and no decisions about our network have been made. We will update our team members and the market once the review has been completed.’