Lexi Webster
Masters Home Improvement was an Australian home improvement chain that was established as a joint venture between Woolworths and Lowe's. The venture aimed to compete with Bunnings Warehouse, which was owned by Wesfarmers, Woolworths' competitor in the hardware retail market. Despite ambitious plans, Masters Home Improvement ultimately failed, accumulating losses of over $3.2 billion over a seven-year period. The failure was due to various reasons, including a lack of product localisation, leadership changes, and a flawed workplace culture. By December 2016, all Masters stores had ceased trading, and the venture was considered one of the biggest disasters in Australian retail history.
| Characteristics | Values |
|---|---|
| Status | Closed |
| Closure Date | 11 December 2016 |
| Number of Stores at Closure | 63 |
| Ownership | Woolworths (66.6%) and Lowe's (33.3%) |
| Reason for Closure | Accumulated losses of over $600 million |
| Competitors | Bunnings Warehouse, Paddington Hardware |
| Planned Number of Stores | 150 |
| Number of Additional Planned Development Sites | 21 |
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What You'll Learn
- Masters Home Improvement was owned by Woolworths and Lowe's
- The joint venture was a failure, losing Woolworths over $3.2 billion
- Masters struggled to compete with Bunnings, which had a near-monopoly
- Masters failed to understand Australian market seasonality
- Masters' workplace culture was reportedly flawed
Masters Home Improvement was owned by Woolworths and Lowe's
Masters Home Improvement was an Australian home improvement chain owned and operated by two retailers: Woolworths and Lowe's. Woolworths, a conglomerate, aimed to enter the hardware retail market, which was historically dominated by its competitor Wesfarmers' Bunnings Warehouse. Woolworths believed that the existing category for home improvement in Australia was underserved and that there was a genuine opportunity to bring competition and grow the sector.
On 25 August 2009, Woolworths announced a joint venture with the US-based hardware chain Lowe's. The plan was to develop 150 stores within five years. The Masters brand name was announced on 3 May 2011, and the first outlet opened in Braybrook on 31 August 2011. Masters aimed to differentiate itself from competitors by having brightly lit and colourful stores, using polished concrete and large colour signage. They also intended to attract female shoppers and sold more 'non-hardware' lines such as white goods.
However, Masters struggled to compete with Bunnings Warehouse. A key reason for this struggle was the lack of product localisation to the Australian market, with product schedules based on Northern Hemisphere seasons. For example, lawnmowers were sold in the depths of winter. Other reasons for Masters' failure include leadership changes, product line adjustments, a flawed workplace culture, and a lack of understanding of the seasonality inherent in hardware products.
By 2013, it was clear that the company was struggling, and Woolworths announced its exit from the home improvement business in January 2016. Masters accumulated losses of over $3.2 billion over a seven-year period, and all stores were closed and sold off by 11 December 2016. This failure is considered one of the biggest disasters in Australian retail history, leaving Bunnings with a near-monopoly in the retail hardware market in Australia.
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The joint venture was a failure, losing Woolworths over $3.2 billion
Masters Home Improvement was an Australian home improvement chain that was operated by two retailers: Woolworths and Lowe's. Woolworths' decision to enter the hardware retail market was driven by its desire to compete with Bunnings Warehouse, which was owned by its competitor Wesfarmers. Woolworths believed that there was a genuine opportunity to bring competition and grow the sector.
The joint venture between Woolworths and Lowe's, however, proved to be a costly failure, accumulating losses of over $3.2 billion over a seven-year period. The failure is considered one of the biggest disasters in Australian retail history.
There were several reasons for the joint venture's failure. Firstly, Masters struggled to understand the Australian market and failed to localise its product offerings. For example, they sold products that were out of season in the Australian market, such as lawnmowers in winter.
Secondly, Masters had a flawed workplace culture and failed to create a positive customer experience. In contrast, Bunnings encouraged staff to be innovative and challenge the boss, whereas Masters had rigid policies that may have stifled innovation. Weekend barbecues and activities for kids at Bunnings also made it a popular family outing, whereas Masters failed to engender the same level of enthusiasm.
Leadership changes and product-line adjustments were attempted, but these did little to improve the company's performance. In August 2014, the store roll-out plan was revised, and the final store opened in Penrith in December 2015.
In January 2016, Woolworths announced it would exit the home improvement business, and by December 2016, all Masters stores had ceased trading. The failure of the joint venture resulted in significant losses for Woolworths and marked the end of its attempt to challenge Bunnings' dominance in the hardware retail market.
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Masters struggled to compete with Bunnings, which had a near-monopoly
Masters Home Improvement was an Australian home improvement chain operated by Woolworths and Lowe's. It was established to enable Woolworths to enter the hardware retail market, which was historically dominated by Bunnings, owned by Wesfarmers.
Another factor contributing to Masters' struggle was the strong brand loyalty that Bunnings enjoyed among Australians. Bunnings encouraged staff to 'challenge the boss' and present new ideas, fostering a culture that Masters failed to replicate. Visiting Bunnings became almost a day out for many families, with weekend barbecues supporting local charities and activities for children. In contrast, Masters' rigid workplace culture and lacklustre store experience failed to engender the same enthusiasm.
Masters also faced challenges due to high barriers to entry into the hardware market, selling the wrong products, and a flawed workplace culture. The company's attempt to differentiate itself by attracting female shoppers, providing buzzers for customers to call for assistance, and selling non-hardware lines like white goods fell short of keeping the company afloat.
The failure of Masters resulted in accumulated losses of over $3.2 billion over a seven-year period for Woolworths, causing the company to exit the hardware market and sell off all Masters stores by 11 December 2016.
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Masters failed to understand Australian market seasonality
Masters Home Improvement was an Australian home improvement chain operated by Woolworths and Lowe's. The joint venture was an attempt by Woolworths to enter the hardware retail market, which has been historically dominated by Bunnings, owned by their competitor Wesfarmers.
One of the key reasons for the failure of Masters was its inability to understand the seasonality of the Australian market. Woolworths' ties with Lowes USA meant that stock was often out of season in Australia. The company's product schedules were based on the Northern Hemisphere seasons, which did not align with the Australian climate and customer needs. This resulted in Masters having the wrong products at the wrong time of the year, leading to a loss of customers and sales.
In addition to the issues with seasonality, Masters also faced high barriers to entry into the market, a flawed workplace culture, and a lack of customer satisfaction. The rapid rollout of stores across Australia, particularly in Victoria, led to the cannibalisation of their own market. The company also failed to replicate the successful store layout and customer experience of Bunnings, which offered a unique and enjoyable shopping experience for Australian families.
The failure of Masters Home Improvement is considered one of the biggest disasters in Australian retail history, with Woolworths losing billions of dollars and ultimately exiting the hardware market. The inability to understand the seasonality of the Australian market and adapt their product offerings accordingly was a crucial factor in the company's demise.
To avoid such failures in the future, companies entering the Australian market must thoroughly research and understand the local climate, customer needs, and seasonality patterns. This knowledge will enable them to align their product offerings with the demands of the Australian market, ensuring customer satisfaction and long-term success.
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Masters' workplace culture was reportedly flawed
Masters Home Improvement was an Australian home improvement chain operated by Woolworths and Lowe's. The joint venture was ultimately a failure, accumulating losses of over $3.2 billion over a seven-year period, and all stores were closed and sold off by 11 December 2016.
The failure of Masters Home Improvement is considered one of the biggest disasters in Australian retail history. A key reason for the failure was the lack of product localisation to the Australian market from company leadership. The product schedules were based on Northern Hemisphere seasons, which did not align with Australian seasons.
Despite the business's eventual failure, many employees reported positive experiences working at Masters Home Improvement. Reviews on Indeed.com mention good pay, hours, culture, training, and management. One employee noted that the workplace was positive and drama-free, with flexible scheduling and full benefits offered depending on the position. Another employee praised the company's rational management, which helped achieve the highest service for customers and employees and contributed to the rapid spread of the company and its services.
However, some reviews also mentioned long hours and a challenging work-life balance. One employee shared that they often worked 7 days a week and up to 15 hours a day due to the store's long operating hours. Additionally, during tough times, casual staff were let go, leaving full-time staff to run the stores with insufficient support.
Overall, while Masters Home Improvement ultimately failed as a business, many employees reported positive aspects of the workplace culture, including flexibility, positive work environment, good management, and comprehensive training. However, the challenging hours and work-life balance were also noted as areas of concern.
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Frequently asked questions
No, Masters Home Improvement was owned by the conglomerate Woolworths, in a joint venture with US-based hardware chain Lowe's.
Masters Home Improvement closed due to a combination of reasons, including high barriers to entry, selling the wrong products, a flawed workplace culture, and a lacklustre customer experience. The venture accumulated losses of over $3.2 billion over a seven-year period, leading Woolworths to exit the hardware market.
Woolworths announced its exit from the home improvement business on 18 January 2016, and all stores were closed and sold off by 11 December 2016.
Home Consortium, a private joint venture, acquired the Masters property portfolio, which included 40 freehold trading sites, 21 freehold development sites, and 21 leasehold sites. Some sites were converted into Bunnings stores, while the remaining sites were reformatted into multi-tenant format centres. Woolworths also acquired three freehold sites and took assignment of 12 leases.
