Wesfarmers has announced plans to wind down its Catch business, ceasing standalone operations in the fourth quarter of the 2025 financial year. The move will see Catch’s e-commerce fulfilment centres and digital capabilities integrated into Wesfarmers’ retail divisions, marking a strategic shift to enhance omnichannel offerings across the Group.
Rationale Behind the Decision
Wesfarmers Managing Director Rob Scott explained that this decision aligns with the company’s broader goals to optimise shareholder value and better leverage Catch’s assets.
“Catch has faced financial challenges in a competitive e-commerce environment. However, its integration will strengthen our retail divisions’ digital capabilities, supporting our omnichannel strategies and OnePass membership program,” Mr. Scott said.
Wesfarmers’ retail and health divisions recorded over $3 billion in e-commerce sales and 220 million monthly digital interactions in FY2024, positioning them as leaders in non-food omnichannel retail in Australia.
Transition Plans for Catch
Key aspects of the transition include:
- Fulfilment Centres: Catch’s e-commerce fulfilment centres in Moorebank, NSW, and Truganina, VIC, will be transferred to Kmart Group. This move is expected to enhance efficiency and improve customer experience, while addressing underutilisation issues.
- Digital Capabilities: Select Catch digital assets, including specialist personnel and supplier relationships, will be integrated into Wesfarmers’ retail divisions to bolster their omnichannel strategies.
- Team Members: Wesfarmers will aim to redeploy affected Catch team members within the Group where possible.
Kmart Group Managing Director Ian Bailey noted, “This transition builds on a successful partnership with Catch and will allow Kmart Group to better utilise fulfilment assets, deliver faster customer deliveries, and reduce unit costs.”
Financial Impact
- One-Off Costs: Wesfarmers anticipates one-off costs of $50–$60 million related to the Catch wind-down, including $25–$30 million in non-cash costs.
- Catch Losses: Catch is projected to report a pre-tax operating loss of $38–$40 million for H1 FY2025, excluding wind-down costs.
- Future Earnings: The transition is expected to have a modest positive impact on Kmart Group earnings in FY2026, with benefits growing as online sales increase.
OneDigital Update
Wesfarmers reaffirmed its commitment to the OneDigital platform, which integrates data analytics and digital initiatives across the Group’s retail and health divisions.
- OnePass Membership: Continued success of the OnePass program is driving higher shopping frequency and incremental sales.
- Data Capabilities: Wesfarmers’ shared data asset now includes over 12 million customer records, enhancing personalisation, customer insights, and cross-shopping opportunities.
- Retail Media Network: Investment will accelerate in shared systems and data to commercialise retail media across divisions, creating new revenue streams.
The operating loss for OneDigital (excluding Catch) is forecast to be $70 million in FY2025, reflecting investments in retail media and other digital initiatives.
Looking Ahead
An update on the Catch wind-down and OneDigital’s progress will be provided at the Wesfarmers Strategy Briefing Day in May 2025.
Wesfarmers remains focused on strengthening its retail and health divisions through enhanced digital integration, leveraging the valuable insights and capabilities gained from Catch.
