Wesfarmers turned its Catch e-commerce division from profitable to loss-making and winding it down

Wesfarmers has announced significant operational changes and layoffs at its Catch Group e-commerce division, signaling the end of Catch as a standalone entity by the fourth quarter of the 2025 fiscal year. This decision follows a series of missteps in management and strategy since Wesfarmers acquired Catch in 2019 for $230 million.

Reports from Inside Retail revealed that Catch Group quietly laid off 100 staff members in February 2023, coinciding with a significant drop in performance and ahead of Wesfarmers’ impending results announcement on February 15, 2023. These job cuts primarily affected the marketing, product and technology, and finance divisions, with departmental budgets slashed by up to 30%.

Catch’s financial troubles have been mounting over the years, with only a 1.6 percent year-over-year increase in Gross Transaction Value to $989 million reported in FY22. Despite the broader e-commerce boom during the COVID period, Catch has struggled to capitalize on this trend under Wesfarmers’ management. The company has consistently underperformed, leading to a reevaluation of its operational strategies and management changes, including the departure of key executives like Chief Executive Peter Sauerborn and Chief Product and Technology Officer Tomas Varsavsky.

Wesfarmers Managing Director Rob Scott cited the integration of Catch’s e-commerce fulfillment centers into Kmart Group as a strategic move to enhance the retail giant’s omnichannel offerings and stem the financial losses of Catch as an independent operation. However, the recent layoffs and operational downsizing raise concerns about the effectiveness of Wesfarmers’ management strategies and their impact on employee morale and brand reputation.

Due to the winddown, Catch is set to incur one-off costs between $50 million and $60 million, not accounting for the operational losses in the latter half of FY25. This financial strain highlights the continued challenges Wesfarmers faces in aligning Catch’s operations with its broader strategic goals. The winding down of Catch, coupled with the transfer of some of its digital capabilities to other retail divisions within Wesfarmers, suggests a move towards consolidation and an attempt to salvage valuable assets from the failing e-commerce operation.