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Highlights
- Wesfarmers (ASX:WES) announces plans to end Catch by FY25.
- E-commerce capabilities to be reallocated within the company.
- Transition to strengthen omnichannel offerings and customer value.
Wesfarmers (ASX:WES) has made headlines with its decision to close the operations of Catch, an e-commerce platform acquired in 2019. The strategic move underscores a shift in focus towards enhancing omnichannel capabilities across Wesfarmers’ retail divisions, marking a significant change in the company’s digital strategy.
Transition Plan for Catch
Catch, currently operating as an online-only retailer, will cease operations by the fourth quarter of FY25. Wesfarmers plans to repurpose Catch’s fulfilment centers in New South Wales and Victoria to support its Kmart Group. Select digital assets developed through Catch will also be integrated into Wesfarmers' broader retail divisions, ensuring these advancements contribute to future growth.
This transition aims to offset the consistent losses reported by Catch while optimizing resources for Wesfarmers’ retail businesses. The move is expected to reduce inefficiencies, including better utilization of the underperforming facilities currently operating at less than 50% capacity. Kmart Group, in particular, stands to gain by using these facilities for faster and cost-effective customer deliveries.
OneDigital and Omnichannel Strategy
As part of its digital roadmap, Wesfarmers continues to emphasize its OneDigital initiative, which focuses on leveraging shared data assets and developing a retail media network. This includes data-driven customer personalization and cross-shop opportunities, enhancing the company’s ability to deliver value and efficiency through its loyalty program, OnePass.
Despite the closure of Catch, OneDigital remains pivotal to Wesfarmers’ strategy. Excluding Catch, OneDigital’s operating loss is expected to be around $70 million for FY25, reflecting investments aimed at long-term transformation.
Financial Impact and Outlook
Wesfarmers anticipates one-off costs related to the wind-down of Catch between $50 million and $60 million for FY25, in addition to Catch's forecasted operating loss of $38 million to $40 million for the first half of FY25. However, the company expects minimal financial impact on Kmart Group in FY26, with benefits potentially growing as online sales expand.
Strategic Rationale
According to Wesfarmers’ Managing Director, Rob Scott, increasing competition in Australia’s e-commerce sector has influenced Catch’s declining performance. However, Wesfarmers’ diversified retail and health businesses are better equipped to respond to evolving market demands, supported by strong omnichannel platforms and trusted brands.
While the closure of Catch marks the end of a chapter, it signals a sharper focus for Wesfarmers on scalable and cost-effective digital initiatives designed to strengthen its retail ecosystem and enhance shareholder value.
