Long-running online deals website Catch will soon be shut down after losing more than $350 million in the past three and a half years.Owner Wesfarmers, which also runs Kmart, Target, Bunnings and Officeworks, announced the closure this morning as it looks to cut costs.The site will stop selling products on April 30.
Online sale retailer Catch. The website will shut down at the end of April. (Catch)Catch was one of Australia's earliest successful online retailers, having been founded in 2006 as Catch of the Day by brothers Hezi and Gabby Leibovich.From its initial five staff, it grew into a business with hundreds of employees and was bought by Wesfarmers in 2019 for $230 million in cash.Not long after, analysts JP Morgan valued the company at more than $1 billion, but it has proved to be a consistent loss-maker for Wesfarmers.The retailer made losses of $88 million in 2022, $163 million in 2023 and $96 million last year, the latter even as the entire Wesfarmers group made $2.6 billion in post-tax profit.Catch is also set to report a before-tax operating loss of around $40 million for the first half of 2024-25, with Wesfarmers pointing the finger at increased competition in the online retail sector for the site's financial struggles.
Wesfarmers managing director Rob Scott said the decision to close Catch was due to increased competition in the online retail sector. (Dominic Lorrimer)"While Catch's financial performance has been challenging, we have gained valuable insights and capabilities that have accelerated the group's digital transformation," Wesfarmers managing director Rob Scott said"The recent increase in competitive intensity in the Australian e-commerce sector has affected Catch's financial performance and growth prospects," he added."In this environment, the group's retail and health businesses, with their leading omnichannel offerings and trusted brands, are better positioned to respond as the market and customer expectations evolve."Catch's fulfilment warehouses in Sydney and Melbourne, which are currently sitting half-empty, will be taken over by Kmart.Australia's most trusted and distrusted brandsView Gallery"Kmart Group can better utilise Catch's fulfilment centres, which are currently less than 50 per cent utilised," Kmart managing director Ian Bailey said."The transition will result in faster deliveries to customers at a lower unit cost, while relieving pressure on our busy stores."Scott said Wesfarmers will offer Catch staff new job opportunities elsewhere within the group "where possible".
