Owner of Coles and Bunnings, Wesfarmers, (ASX:WES) announced it is writing down the loss-making Bunnings UK and Ireland business and retailer Target, which is expected to be included in the group’s 2018 half year financial results.
Bunnings UK expects a loss of £97 million for the first half of 2018.
The company expects a non-cash impairment of £454 million before tax of Bunnings UK and Ireland due to the lower performance of its Homebase brand.
The company expects a non-cash impairment of $306 million before tax, after the retailer significantly reduced its cost base and inventory levels.
Wesfarmers Managing Director Rob Scott says the Homebase acquisition has been below expectations and adds the impairment of Target reflects difficult trading conditions in an increasingly competitive market.
Shares in Wesfarmers (ASX:WES) are trading 4.28 per cent lower at $42.36.