In a move that has sent ripples through the Australian e-commerce landscape, Wesfarmers has announced the closure of the popular online retailer Catch.com, signalling a significant shift in the digital marketplace and leaving nearly 200 employees facing an uncertain future.
Catch.com, once a thriving hub for bargain hunters and a beacon of Australian entrepreneurial spirit, will cease operations amid a tumultuous period of spiralling losses and fierce competition from international e-commerce giants such as Temu and Shein. This decision comes as a stark reminder of the volatility of the online retail sector and the challenges local businesses face in a globalised market.
Wesfarmers, a household name in Australian retail, acquired Catch for a hefty sum of $230 million in 2019, with high hopes of expanding its digital footprint. However, the conglomerate has now decided to wind down the platform, citing an increasingly difficult competitive environment as the primary reason for its demise. The company’s statement to the ASX outlined plans to redistribute Catch’s assets across the business, with e-commerce fulfilment centres transitioning to the Kmart Group and other digital capabilities, including specialist personnel and supplier relationships, being absorbed by various divisions.
The closure of Catch is not just a business decision; it’s a human story. While approximately 100 roles will be repurposed within the Wesfarmers family, a further 190 jobs will be lost, leaving many employees to navigate the challenging job market. The wind-down is estimated to cost Wesfarmers between $50 million and $60 million, a significant financial hit that underscores the gravity of the situation.
Catch is projected to report an operating loss of up to $40 million for the first half of the 2024-25 financial year. Wesfarmers’ managing director, Rob Scott, stated that the decision was made with shareholders’ best interests in mind and would allow for better use of the assets and capabilities developed through Catch. ‘Despite Catch’s financial challenges, we have gained valuable insights and capabilities that have helped accelerate the group’s digital transformation and contributed to the development of the OnePass membership program,’ Mr Scott explained.
The Australian e-commerce sector has seen a dramatic increase in competitive intensity, with international players leveraging their global scale, networks, and technologies to offer heavily discounted products. This has put immense pressure on local businesses, including Catch, to maintain profitability and growth prospects.
Local retail magnate Gerry Harvey has voiced his concerns, calling for an inquiry into the practices of these international competitors. He highlights the challenges Australian retailers face, such as the lack of tax contributions and employment opportunities provided by these foreign entities, which operate with a significant advantage over homegrown marketplaces.
As Wesfarmers navigates this transition, the company has pledged to offer redeployment opportunities ‘where possible’ to those affected by the closure. This commitment to its workforce is a silver lining in an otherwise sombre announcement.
As Catch.com closes its doors, the future of Australian e-commerce faces new challenges. What are your thoughts on this shift in the retail landscape? Have you been impacted by the closure? How do you think local online retailers can adapt moving forward? Share your thoughts in the comments below!
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