Strategic Alliance with Australia's Largest Retailer, Woolworths, to Create Comprehensive Network of Stores
First Stores Expected to Open in 2011
MOORESVILLE, N.C., Aug. 24 /PRNewswire-FirstCall/ -- Lowe's Companies, Inc. (NYSE: LOW) announced today the company has entered into a joint venture agreement with Australia's largest retailer, Woolworths Limited (ASX: WOW), to develop a network of home improvement stores for consumers in Australia. Under the agreement, Lowe's will be one-third owner of the destination home improvement chain, which is slated to open its first store in the 2011 fiscal year.
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"This is a tremendous opportunity to enter the A$24 billion ($20 billion USD) and growing home improvement market in Australia, at a time when the sector is underserved," explained Robert A. Niblock, Lowe's chairman and CEO. "By partnering Lowe's home improvement knowledge with the retail expertise of Australia's largest retailer, Woolworths, we expect to develop destination home improvement stores that offer consumers the products and services they need for their homes and businesses in an environment that is comfortable and easy to shop."
Woolworths, founded in 1924, is the 23rd( )largest retailer in the world with expertise across grocery, consumer electronics, liquor, petroleum and general merchandise retailing. With 2009 fiscal year revenues of A$49.4 billion ($37 billion USD), the company has more than 3,000 retail outlets and is the largest private sector employer in Australia.
"The Australian love of property and high levels of home ownership mean that maintaining and improving homes is an important part of everyday life," said Michael Luscombe, Woolworths chief executive. "We're very pleased to be working with Lowe's, a leading global retailer in home improvement, and very proud of the unique and collaborative agreement we have put in place."
Lowe's and Woolworths plan to share best practices to create a leading destination home improvement business in Australia. The partners have a target to secure more than 150 store sites over the next five years, with the first store expected to open in late 2011. The locations will be large-format stores, greater than 100,000 square feet, and will offer products and services for both the do-it-yourself homeowner and the trade customer. Already, Woolworths has secured entitlement to 12 sites and is currently in final negotiations to secure a further 15 sites for Greenfield development.
In addition, the joint venture has made a recommended takeover offer for all the shares in Danks Holdings Limited (ASX: DKS), Australia's second largest hardware distributor.
