Sep 15, 2009
Woolworth-Lowe's Australia venture gets store sites
Sep 15, 2009
MELBOURNE, Sept 15 (Reuters) - An Australian home improvement joint venture between Woolworths Ltd (WOW.AX) and Lowe's Companies Inc (LOW.N) has found sites for new stores, passing what analysts said was a major hurdle in its expansion.
Retail analysts have said the new venture could have trouble securing sites for its large due to Australian planning controls that have raised problems for other international retailers.
But Don Stallings, chief executive of the as yet unnamed venture, told reporters that has not been the case.
"There are plenty of A-plus sites out there that are available, local council has been extremely supportive," said Stallings.
The venture aims to have 150 stores open in its first five years, taking on rival Bunnings owned by Wesfarmers Ltd (WES.AX) in Australia's A$24 billion ($21 billion) hardware market.
Woolworths said it would spend A$400 million to build 30 stores in Victoria, the country's second most populous state, but the total capital investment in the venture has not been given.
Lowe's is the second large U.S. retailer to expand into Australia's tightly held market this year, after Costco (COST.O), whose warehouses sell everything from groceries to diamond rings, opened its first store in Melbourne. It took more than a year to secure a site in Sydney.
"There are always difficulties getting sites of that nature, (Woolworths and Lowe's) will be looking at all sorts of avenues, the rezoning of industrial land and so forth," said Fortis Investment Partners investment analyst Martin Duncan.
(Reporting by Victoria Thieberger; editing by Jonathan Standing)
© Thomson Reuters 2021 All rights reserved.