Aussie online retailer to be shut down after haemorrhaging millions

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Catch, a well-established online deals website, will be closing down soon after incurring losses exceeding $350 million over the past 3 and a half years.

Owner Wesfarmers, which also manages Kmart, Target, Bunnings and Officeworks, announced the shutdown this morning as it seeks to reduce costs.

The site will stop selling products as of 30 April.

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Fair dinkum, Catch was one of Australia's first online retailers to have any real success, snagged in 2006 under the name Catch of the Day by brothers Hezi and Gabby Leibovich.

It started with just five employees, however, and later expanded to become a company employing hundreds of people. The business eventually changed hands and was purchased by Wesfarmers in 2019 for $230 million.

Not long after, JP Morgan analysts valued the company at over one billion dollars, but it has kept costing Wesfarmers money.

The retailer was in the red for $88 million in 2022, $163 million in 2023, and $96 million in the previous year, which is quite surprising given the entire Wesfarmers group turned a profit of $2.6 billion after tax.

Catch is also tipped to reveal an approximate pre-tax loss of about $40 million for the first half of the 2024-25 financial year, with Wesfarmers attributing the site's poor financial performance to increased competition within the online retail market.

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"While Catch's financial record hasn't been too flash, we've picked up some valuable insights and capabilities that've put the group's digital makeover on the fast track," Wesfarmers managing director Rob Scott said.

"The recent lift in competitive pressure in the Australian online shopping market has taken its toll on Catch's financial performance and future growth predictions," they said.

In this environment, the group's retail and health businesses, with their top-notch multi-channel services and respected brands, are well placed to respond as the market and customer expectations change.

Kmart will be taking control of Catch's underutilized warehouses in Sydney and Melbourne.

"Aussie Kmart says they'll get a better run out of Catch's warehouse centres, which are at the moment only using about half of their capacity," said Kmart managing director Ian Bailey.

The transition will mean quicker deliveries to customers at a better price, while taking some pressure off our busier stores.

Scott said Wesfarmers will provide Catch staff with new job opportunities elsewhere in the organisation "where possible".

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