It’s taken five years but Wesfarmers boss Rob Scott has raised the white flag on the company’s expensive retail experiment which involved forking out $230 million to a couple of charmed entrepreneurs for online marketplace Catch.com.au.
In a case of buyer’s remorse but sellers’ delight, the Catch founders Gabby Leibovich and Hezi Leibovich walked away even wealthier while Wesfarmers struggled to post any profit from the online marketplace operator, sustaining years of losses.
Wesfarmers chief executive Rob Scott
So Wesfarmers has taken the decision to shut down Catch – and have its department store chain Kmart pick up the infrastructure scraps, including warehousing. It will no longer operate as a standalone marketplace, but it will be a painful memory of a strategic mistake.
Catch, which Wesfarmers bought in 2019, was supposed to inject expertise and a growth culture into the West Australian conglomerate’s retail brands.
Fast forward to 2025, and Catch is expected to report an operating loss of up to $40 million in the first half of the 2025 financial year, while Wesfarmers will report one-off costs of $50 million to $60 million associated with the Catch exit.
Wesfarmers may have garnered intelligence on what it didn’t know about online retailing. More likely, Scott learned how tough it is to operate in a highly competitive marketplace, where its brand isn’t the major player and its rivals like Amazon wrote the book on how to operate in this market and newer competitors like Chinese-owned Temu are gaining traction.
Wesfarmers’ traditional brands like Bunnings, Officeworks and even Kmart have dominant positions in their respective sectors. They call the shots while smaller competitors struggle.
The Catch foray is also a fascinating study in how traditional businesses respond to the threat of technology-based disruption.
Buying a company with expertise seemed like a good idea at the time – even if the eye-watering price tag challenged Wesfarmers’ renowned credentials as hard-headed asset trader and protector of shareholder funds.
