Sophie Ryan is online editor for the Business Herald

Woolworths to close six Countdown supermarkets

Six Countdown stores are to close across New Zealand. Waihi has already closed, Rangiora will follow but the others have not yet been named.
Six Countdown stores are to close across New Zealand. Waihi has already closed, Rangiora will follow but the others have not yet been named.

Six Countdown supermarkets will be closed before the end of their lease terms.

Australian parent company Woolworths announced to the ASX a A$1 billion plan to boost its bottom line that includes cutting 500 jobs in Australia.

Countdown spokesman James Walker said the six supermarkets to close in New Zealand includes Rangiora Central, which will close on October 2.

It did not include Countdown Waihi, which has already been shut.

He wouldn't name the other five supermarkets for commercial reasons.

"We have already informed our [Rangiora Central] team and are working with them to redeploy [them] to other Countdown stores nearby," he said.

One of the remaining five supermarkets will only close temporarily while a replacement would be built, Walker said.

Countdown has 184 stores across New Zealand and employs more than 18,000 people.

The number of staff affected by the closures was not given, but Walker said Countdown would work to transfer staff to other locations where possible.

"We close stores to enable the redevelopment of stores and build new stores.

"Countdown will open three new stores and two replacement stores in FY17, which will create new employment opportunities. We anticipate our employment numbers to continue to increase over the next financial year: we recently announced the creation of 600 new jobs."

Woolworths also announced it will "explore options" to sell clothing retailer EziBuy.

The retailer is separating its Big W and EziBuy business and is looking to sell the latter.

Ezibuy has stores in Auckland, Wellington, Palmerston North and Christchurch.

Woolworths chief executive Brad Banducci said it will be business as normal for EziBuy customers.

"Our decision has no impact on the current operation or trading of the business," Banducci said.

"EziBuy stores in New Zealand and its online and call centre operations will continue to enable customers to shop the latest in fashion and homewares with confidence in New Zealand and Australia."

He said the company was "committed" to doing the "right thing by our customers, team members and suppliers throughout the sale process".

EziBuy is one of the largest multi‐channel retailer in Australasia, and was bought by Woolworths three years ago.

"The synergies expected at the time Woolworths bought EziBuy were not realised and performance has been below our expectations," he said.

"As a result, we have separated BIG W and EziBuy and will look at options to sell EziBuy."

Woolworths bought EziBuy for NZ$350 million in August 2013 from founders Peter and Gerard Gillespie and Australian private equity firm Catalyst Investment Managers, with a view to learning from the New Zealand firm's success in selling through different channels.

EziBuy is expected to post an annual loss of between A$13 million and A$18 million before significant items when Woolworths reports its results on August 25. The separation and poor trading performance prompted the impairment charges on goodwill and other intangible assets.

The retailer said earnings before interest and tax from continuing operations were between A$2.55 billion and A$2.57 billion in the 2016 financial year.

The ASX-listed shares last traded at A$22.45 and have dropped 8.4 per cent this year.

- additional reporting from BusinessDesk and

- NZ Herald

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