“We as a board have determined that we cannot sustain, or continue to sustain these losses”, Mr Cairns told analysts on a conference call on Monday.
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Mr Cairns said Woolworths would take full ownership of the business, which “gives us access to the widest range of exit options”.
As the stores are operated through a joint venture with USA business Lowe’s, Woolworths announced it would first acquire Lowe’s stake to simplify the wind down.
It is thought the venture has lost $700 million in the past four years.
Investors were relieved, with Woolworths shares defying widespread falls on the stock market to climb $1.18, or 5.2 per cent, to $23.84 by 1146 AEDT. Masters has been an enormous capital drain and management distraction for a company that needs to focus on fixing its core supermarkets business and restoring shareholder value.
“As a result of our engagement with Lowe’s, it has advised us that it intends to exercise the put option which is available to it under the joint venture agreement”.
Cairns stated that it will take at least two months to complete the put and call options process and additional time to finalise a potential sale or other exit process.
There are 63 Masters stores located across Australia. In contrast to the ailing Masters brand, Wesfarmers is looking to roll out its Bunnings home improvement chain in the United Kingdom within the next five years.
Masters chain which has racked up more than $600 million in losses since it started in 2011 and has sucked in more than $3 billion in investment from its partners will close following a review of the business by Woolworths chairman Gordon Cairns.
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Wesfarmers has agreed to buy 265 Homebase stores for STG340 million ($A705 million) from Home Retail in the United Kingdom, with plans to rebrand the chain, Bunnings.
