Online marketplace Catch to be shut down amidst ongoing losses
Wesfarmers will close its online marketplace Catch after ongoing losses and increased competition from global giants like Amazon and Temu. The decision comes as Wesfarmers shifts focus to other retail strategies.
Transaction snapshot
Deal value: N/A
Deal multiples: N/A
Deal type: Business closure following losses
Investors: Wesfarmers
Catch, acquired by Wesfarmers in 2019 for $230 million, reported a $96 million loss in the last financial year. Competition from Amazon, Shein, and Temu, which offer low-cost products across a broad range, has eroded Catch’s ability to deliver sustainable returns.
Wesfarmers CEO Rob Scott stated that the closure was in shareholders’ best interests, citing intense competition impacting Catch’s profitability. Temu, owned by China’s PPD Holdings, and Shein are among the key players dominating Australia’s online retail market.
Catch’s struggles have raised questions about Wesfarmers’ ability to operate in the Ecommerce space. Amazon and Temu’s growth may increase pressure on profit margins for Wesfarmers’ other brands, such as Kmart, Target, and Officeworks.
Catch has faced a long decline since its pandemic-era valuation of $2 billion. During the COVID-19 lockdowns, Catch flourished as online shopping surged. However, shifting consumer behaviour and competition led to losses. Wesfarmers integrated Catch into its OneDigital division in 2022, aiming to centralise its digital operations, but it failed to stem the financial losses.
Wesfarmers expects to incur one-off costs of $50–$60 million to close Catch, in addition to its half-year operating loss of $38–$40 million as of December 2024. OneDigital, excluding Catch, is projected to report a $70 million loss this year.
The Catch fulfilment centres will be repurposed for Kmart, and some business components will be integrated into Wesfarmers’ broader retail operations. Wesfarmers plans to focus on developing a retail media business, leveraging shopper data for targeted advertising, as part of its OneDigital strategy.
Ruslan Kogan, CEO of Kogan.com, expressed disappointment at the closure. Kogan.com had offered to acquire Catch, but Wesfarmers declined. He noted Catch’s significant role in Australian Ecommerce and criticised the decision as a missed opportunity.
Retailers like Gerry Harvey, chairman of Harvey Norman, have raised concerns about global players like Temu and Shein dominating the local market while paying minimal taxes and employing few Australians. Harvey called for a federal inquiry into the practices of these companies to level the playing field for domestic retailers.
