Bunnings CEO Mike Schneider to retire, Rachel McVitty to take over; Wesfarmers results released
Updated ,first published
Kmart is planning to roll out more furniture and homewares-only stores across the country and introduce its popular in-house brand Anko to more customers in the Philippines.
Retail giant and Kmart owner Wesfarmers’ chief executive Rob Scott said K Home, the chain’s furniture and homewares showroom that opened in Melbourne in June, was performing strongly.
“We’re getting really good growth in the category that was only previously available online by putting that product into stores. We’re now making that available to more customers,” Scott told reporters on Thursday morning. “We are looking forward to opening more stores.”
Customers are not only buying furniture in the physical stores, but adding more items to their shopping baskets, he said. But there was more work to do.
“Whenever you launch a new store, you want to make sure you really get the model right, that you get it optimised before you ramp it up. So [Kmart managing director] Aleks [Spaseska] and the team still have a bit of work to do there,” Scott said.
He made the comments after unveiling Wesfarmers’ full-year results on Thursday morning. Kmart’s sales rose 2.8 per cent to $11.8 billion and profits grew 6 per cent to $1.1 billion in what Scott described as a “standout, exceptional result”, although warmer-than-expected weather meant clothing sales came in slightly below expectations.
Meanwhile, sister chain Target’s apparel range is “starting to resonate”, attracting new customers and selling less stock on discount, he said.
Elsewhere, Anko Global, the international spin-off of Kmart’s popular private-label brand that constitutes about 85 per cent of all Kmart products, had “started to slow down” as a result of retailer anxiety around impending tariffs.
“It [was] quite challenging to actually get a lot of foreign retailers to commit when there was so much volatility around the tariff situation, so we’ve really just doubled down on our activities in the Philippines,” said Scott. Anko has opened six stores in the Philippines. “Subject to the performance of those, we will consider ramping it up over the coming years.”
Revenue across the Wesfarmers conglomerate rose 3.4 per cent to $47.3 billion in the year to June, and net profits excluding significant items lifted 8.3 per cent to $2.9 billion. The company also owns the Bunnings, Officeworks and Priceline chains, a chemicals, energy and fertiliser business, a health and pharmaceutical division, and an industrial supplies business.
Over the year, Bunnings grew sales by 4.1 per cent to $20.4 billion, driven by DIY home repairs and renovations as it broadened its range of tools, pet and automotive offers.
The company said Bunnings chief executive Mike Schneider will retire in February, with chief customer officer Rachael McVitty set to take over the role. Schneider joined the hardware chain in 2005 as a state operations manager and became managing director in January 2016.
Scott said Schneider was leaving Bunnings in excellent shape with the gratitude of the board and the team.
“Mike has been an outstanding leader of Bunnings, leading the business across a decade of consistent growth in sales and earnings while strengthening Bunnings’ strong culture and trust with the community,” Scott said.
McVitty has been appointed deputy managing director and will step into her new role on February 1.
Scott said Wesfarmers’ retail businesses had focused on mitigating cost pressures and delivering better value to customers by lowering prices on thousands of items.
“Bunnings and Kmart Group’s everyday low prices continued to drive sales and earnings growth. Disciplined execution of strategies helped offset cost pressures and delivered operating leverage across both businesses,” he said.
Wesfarmers will pay a fully franked dividend of $1.20 per share, bringing the total shareholder payout for the year to $2.22 per share.
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Jessica Yun is a business reporter covering retail and food for The Sydney Morning Herald and The Age.Connect via X or email.