RETAIL TRADE – AUSTRALIA

Wind down Masters, Woolworths told

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Original article by Sue Mitchell
The Australian Financial Review – Page: 26 : 22-Oct-15

The Masters Home Improvement joint venture is expected to post a loss of $A236m in the next year, following a loss of $A245m in fiscal 2015. Deutsche Bank estimates that Woolworths could boost its profits by around five per cent by exiting the Masters venture. It could also make a net cash gain of $A161m, while joint venture partner Lowe’s would make a gain of $A80m. Woolworths has invested $A2.2bn in Masters to date.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, LOWE’S COMPANIES INCORPORATED, DEUTSCHE BANK AG, MORGAN STANLEY AUSTRALIA LIMITED, CITIGROUP PTY LTD

7-Eleven pumps $200m from petrol

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Original article by Adele Ferguson, Sarah Danckert
The Sydney Morning Herald – Page: 21 : 20-Oct-15

The wage exploitation scandal has prompted 7-Eleven Stores to propose increasing the fuel commission paid to franchisees. Owners of outlet that sell petrol are currently paid $A0.01 for every litre they sell. Head office has proposed lifting this to $A0.015 per litre, although some franchisees are pushing for $A0.03 per litre. Internal documents show that head office’s gross income from fuel sales was $A197.5m in 2014-15, while franchisees were paid $A18.3m in fuel commissions.

CORPORATES
7-ELEVEN STORES PTY LTD

Investors in the pink as Baby Bunting shares surge up

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Original article by Sue Mitchell
The Australian Financial Review – Page: 27 & 38 : 15-Oct-15

Shares in Baby Bunting Group reached an intra-day high of $A2.02 on 14 October 2015, with the stock ending its first day of trading at $A1.86. The retailer’s shares were issued at $A1.40 apiece in a $A52m IPO which received strong support from investors. Baby Bunting expects sales to rise by 21 per cent to $A218.5m in 2015-16, while it aims to aggressively expand its network of stores over the next five years.

CORPORATES
BABY BUNTING GROUP LIMITED – ASX BBN, TDM ASSET MANAGEMENT PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, MORGANS FINANCIAL LIMITED, BABYCO, MOTHERCARE AUSTRALIA LIMITED, KATHMANDU HOLDINGS LIMITED – ASX KMD, COLES GROUP LIMITED, SHELL COMPANY OF AUSTRALIA LIMITED

Termination changes for 7-Elevens worry franchisees

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Original article by Adele Ferguson, Sarah Danckert
The Australian Financial Review – Page: 5 : 13-Oct-15

Australian Greens MP Adam Bandt wants an amendment to the Fair Work Act in the wake of the wage exploitation scandal at 7-Eleven. His private members’ bill would make a franchisor liable if a franchisee fails to pay staff the correct wages. Meanwhile, 7-Eleven franchisees in Melbourne are concerned that they will not gain much from a proposed change in the way profits are split with head office. They also fear that new termination clauses could be exploited by head office.

CORPORATES
7-ELEVEN STORES PTY LTD, AUSTRALIAN GREENS

Woolworths, Lowe’s tip $105m into Masters

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Original article by Sue Mitchell
The Australian Financial Review – Page: 15 : 13-Oct-15

Australian-listed Woolworths and joint venture partner Lowe’s have invested $A3.32bn in Masters Home Improvement to date. They invested an additional $A105m in the hardware venture on 30 September 2015. US-based Lowe’s has now invested $A1.11bn in Masters over the last six years. A put option to sell its 33 per cent stake in the venture to Woolworths can be exercised on 20 October. Woolworths and Lowe’s are progressively introducing a new store format for Masters in a bid to boost sales.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, LOWE’S COMPANIES INCORPORATED, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, HOME TIMBER AND HARDWARE, HYDROX HOLDINGS PTY LTD, BIG W DISCOUNT STORES, CITIGROUP PTY LTD, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

7-Eleven operators to face court amid wage scandal

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Original article by Adele Ferguson, Sarah Danckert
The Age – Page: 3 : 12-Oct-15

The Fair Work Ombudsman will prosecute Yiran Gu and Haiyao Xu over allegations that they underpaid staff at a 7-Eleven store in the Melbourne suburb of Parkville. They potentially face fines of up to $10,200 for every breach of workplace laws, while their private company could be fined up to $A51,000 for each offence. The Parkville store and 19 other 7-Eleven outlets were raided by the FWO in September 2014. Gu and Xu are also accused of falsifying payroll records.

CORPORATES
7-ELEVEN STORES PTY LTD, AUSTRALIA. FAIR WORK OMBUDSMAN, HIYI PTY LTD

Woolworths ‘treasure chest’ ready to open

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Original article by Catie Low
The Australian Financial Review – Page: 15 : 9-Oct-15

Bank of America Merrill Lynch analyst David Errington estimates that Woolworths could unlock about $A3bn worth of capital by streamlining its operations. He argues that Woolworths should focus on its core food and liquor business, while retaining its gaming division and offloading Big W and exiting the loss-making Masters hardware joint venture. The Masters business in particular may come under scrutiny when Woolworths completes its board renewal process.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, BANK OF AMERICA AUSTRALIA LIMITED, MERRILL LYNCH (AUSTRALIA) PTY LTD, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, BIG W DISCOUNT STORES, LOWE’S COMPANIES INCORPORATED, CITIGROUP PTY LTD, TESCO PLC, KELLOGG COMPANY, RESERVE BANK OF AUSTRALIA

Supermarkets cut prices in private-label drive

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Original article by Catie Low
The Australian Financial Review – Page: 27 : 8-Oct-15

Research by Deutsche Bank shows that Woolworths reduced the cost of its private-label grocery products by nine per cent in the September 2015 quarter. Rival Coles in turn reduced its house brand prices by seven per cent during the period. Meanwhile, the prices of branded products at Woolworths fell by 0.8 per cent and rose by 5.7 per cent at Coles. Woolworths says it has invested some $A250m on price reductions since early 2015.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, COLES SUPERMARKETS AUSTRALIA PTY LTD, DEUTSCHE BANK AG, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, AUSTRALIAN BUREAU OF STATISTICS

Woolworths now cheaper than Coles for trolley of groceries: analyst

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Original article by Patrick Hatch
The Australian Financial Review – Page: 15 : 6-Oct-15

An analysis of grocery prices in Australian supermarkets shows that Costco has the lowest prices for 36 items. Morgan Stanley analyst Tom Kierath also found that the same items were 29 per cent more expensive at Woolworths. However, Coles’ prices were higher than those of Woolworths on 20 items, while its prices were lower on 13 products and the same on three products.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, COLES GROUP LIMITED, COSTCO WHOLESALE AUSTRALIA PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED

Chairman, CEO quit 7-Eleven board

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Original article by Adele Ferguson, Sarah Danckert
The Australian Financial Review – Page: 4 : 1-Oct-15

Former Australian Institute of Company directors chairman Michael Smith will succeed Russ Withers as chairman of convenience store group 7-Eleven. Withers and CEO Warren Wilmot resigned on 30 September 2015. Smith believes that the problem of wage fraud is more far-reaching than just at 7-Eleven, and he favours an amnesty for international students who have been caught up in the scandal. He also suggests that visa rules could be changed to allow them to work for more than 20 hours a week.

CORPORATES
7-ELEVEN STORES PTY LTD, AUSTRALIAN INSTITUTE OF COMPANY DIRECTORS, FAIRFAX MEDIA LIMITED – ASX FXJ, AUSTRALIAN BROADCASTING CORPORATION