Masters is struggling with its wind down

Photo: Ben Rushton/Getty Images.

Masters Home Improvement has tried to cancel supplier orders in recent weeks amid criticism Woolworths’ failed hardware chain has not cut prices fast enough or deep enough to move stock as part of its closing down sale.

One supplier, who would only speak on the basis of anonymity, said Masters’ attempt to cancel orders suggested the fire sale was not going as well as expected.

“I understand week one of the sale went really well, the first week straight after the announcement, but after that it’s been pretty terrible,” he said. “What they had to do was go hard in the first week so people would buy and then tell their friends.”

Masters has taken down all pricing information from its website and cut off its telephone lines to its stores. Customers calling the corporate helpline are told they must visit a store to check prices.

The supplier said there was also a view within Woolworths that stock divestment specialist Great American Group Australia (GA), which is responsible for the inventory sell-down, had moved too slowly and failed to capitalise on shopper excitement about the closing down sale.

Hardware consultant Geoff Dart said the problem for Masters was its discounted stock was still more expensive than similar products in Bunnings in many instances.

“Masters has never understood, in my view, price architecture or positioning, whereas Bunnings just nails it with its good, better, best pricing,” Mr Dart said.

​”GA has made the decision not to have a liquidation sale and you can understand the slow burn but what you do is disengage with consumers and when they’re disappointed they are reluctant to return.”

Suppliers also claim Masters has tried to bring forward the delivery date for existing orders and warned it may not accept stock received after this new deadline which would free Woolworths from having to buy the products and limit the risk to GA of even more unsold stock.

Masters confirmed it has tried to bring forward supplier orders in recent weeks, but a Woolworths spokesman claimed this was only to give it more time to clear stock.

“It’s not [on the basis that] if you can’t bring the order forward it’s cancelled,” he said. “[It’s] better for Masters, they have more time to clear stock and better for the suppliers, they get paid earlier.”

A spokesman for GA said the only reason suppliers had been asked to bring forward orders was because the sale was going so well and it expected to get a big uptick in sales now the football grand finals were over.

“Suppliers have been asked to bring things forward because they need more stock in store,” he said.

“The discounts are picking up now at up to 50 per cent on items and we are hopeful that there will be a surge now the NRL and AFL grand finals are finished.”

Disappointed customers have taken to social media to express their frustrations about an apparent lack of bargains at Masters.

Masters claims one product has been retailing for $70 since November last year and it’s at half price or $35 as part of the closing down sale.

Woolworths stands to reap “gross proceeds” of about $500 million from its deal with GA to sell off inventory valued at as much as $900 million, however reports that the deal was brokered on a return of 90¢ in the $1 for Woolies have been dismissed.

GA claims the firesale is ahead of schedule and the chain may shut down ahead of the December 11 deadline announced in August along with the sale of the Home Timer & Hardware chain to Metcash and the $800 million property deal with Chemist Warehouse owner the Gance family and the owners of the Spotlight and Anaconda retail chains Morry Fraid and Zac Fried.

Woolworths has since become embroiled in a legal dispute with its hardware joint venture partner Lowe’s and the US retailer’s failed bid to appoint a liquidator to the Masters chain.

However, the closing down sale is not just stock on the floor at Masters or in distribution centres, it’s also understood there are as many as 5000 pallets “on the water” which have not hit Australian ports yet, let alone distribution centres or stores.

This article originally appeared on SMH’s Business Day. Read the original here or follow Business Day on Facebook.

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