Wesfarmers

Last updated

Wesfarmers
Type Public
ASX:  WES
Industry Conglomerate
Founded1914;107 years ago (1914)
Headquarters Perth, Western Australia
Area served
  • Australia
  • India
  • Ireland
  • New Zealand
Key people
RevenueIncrease2.svg $30.8 billion (2020) [1]
Decrease2.svg $1.6–2.1 billion (2020) [1]
Total assets $25.4 billion (2020) [1]
Number of employees
107,000 (2020) [1]
Subsidiaries
  • Bunnings Group:
    Bunnings Warehouse, Bunnings, Bunnings Trade, Adelaide Tools
  • Kmart Group:
    Kmart, Target, Catch.com.au
  • Officeworks Group:
    Officeworks, Geeks2U
  • Wesfarmers Chemicals, Energy & Fertilisers:
    CSBP, Covalent Lithium, QNP, AGA, Australian Vinyls, Modwood, Kleenheat, Evol LNG, Decipher
  • Wesfarmers Industrial and Safety:
    Blackwoods, NZ Safety Blackwoods, Work Wear, CoreGas, GreenCap
  • Other:
    Coles (5%), flybuys (50%), BWP Trust (25%), Gresham (50%), Wespine (50%)
Website wesfarmers.com.au
Footnotes /references
Subsidiaries according to the Wesfarmers 2020 Annual Report [1]

Wesfarmers Limited is an Australian conglomerate, headquartered in Perth, Western Australia. It has interests predominantly in Australian and New Zealand, operating in retail, chemical, fertiliser, industrial and safety products. With revenue of A$30.8 billion in the 2020 financial year, [1] it is one of Australia's largest companies by revenue. Wesfarmers is also one of the largest private employers in Australia, with approximately 107,000 employees. [1]

Contents

Wesfarmers was founded in 1914 as a co-operative to provide services and merchandise to Western Australian farmers. It was listed on the Australian Securities Exchange in 1984 and grew into a major retail conglomerate.

History

1930s letterhead with company details of that time Wesfarmers 1930s letterhead.jpg
1930s letterhead with company details of that time

Westralian Farmers Co‐operative Limited was formed in 1914 as a cooperative company by the Farmers' and Settlers' Association of Western Australia, to acquire the assets of the West Australian Producers' Union, to be focused on the provision of services and merchandise to the Western Australian rural community. [2] [3] By 1919, more than 65 local co-operative companies were acting as agents for Westralian Farmers Limited. [4]

In 1924, it established the first public radio station in Western Australia with 6WF, before it passed into the hands of the Australian Broadcasting Commission in 1929, now called ABC Radio Perth

By the 1940s, the company's business included "being wheat and general merchants; country distribution for Commonwealth Oil Refineries; wool, livestock, skin and produce auctioneers; grain & fruit exporters; insurance underwriters; acquiring agents for the wheat pool of W.A." Known as Westralian Farmers Limited, it had premises in various locations within the Perth central business district. In the 1940s there were premises at 563-571 Wellington Street. It also had premises in Newman Street in Fremantle.

In 1949, Wesfarmers acquired Ashburton Transport, which at the time was lossmaking. The following year it also acquired its major competitor Gascoyne Trading, combining the operations of the two companies to supply the northwest of Western Australia. Along with wool and mail, it carted bananas from Carnarvon to Perth, returning with stores and mail from Perth. Gascoyne Trading introduced refrigerated transport to the region and three trailer road trains that now carry loads up to 115 tonnes. [5] [6] [7]

In 1984, Westralian Farmers Co-operative Limited formed Wesfarmers Limited, restructuring from a co-operative to a public company and listed on the Australian Securities Exchange on 15 November 1984. Initially the Co-operative retained 60% of the ordinary shares, guaranteeing that the co-op's farmer members retained control, and the rest was distributed to its members. [8]

In 1991, 19 m³ of the records of Westralian Farmers Co-operative were deposited with the J S Battye Library in Perth.

Rural business, Dalgety Farmers and Wesfarmers Landmark

Bought in January 1993 the integration of Dalgety Farmers with Wesfarmers proved more difficult than expected. For a time the merged rural agency and merchandise business was Wesfarmers Dalgety until renamed Wesfarmers Landmark in March 2001 after IAMA Limited was brought in. Landmark, Wesfarmers foundation business, was sold to AWB Limited (originally the Australia Wheat Board) in August 2003. [9]

Bunnings

An initial investment in 10 percent of Bunnings in February 1987 reached full ownership in January 1994. Bunnings bought UK retailer Homebase in February 2016 and Britain's first Bunnings store opened twelve months later in February 2017. [9] They were 265 well-located stores and Wesfarmers believed Bunnings' management would greatly improve their modest profits. The plan was to make changes gently but tactics changed and local management, perceived as under-performing, was removed and replaced by expatriate management. The expatriate management's changes alienated the existing customer base and, aided by a poor retailing climate, brought a rapid decline into losses. A strategic review by Wesfarmers resulted in the May 2018 sale of the Homebase business to Hilco Capital at a loss of (Australian) $1.96 billion. [10]

Australian Railroad Group

Australian Railroad Group begun in a joint venture with Genesee & Wyoming by the purchase of Westrail at the beginning of 2000. It was sold in 2006 to Babcock & Brown and Queensland Rail. [9]

End of co-operative ownership

In 2001, Wesfarmers become a freely-traded publicly listed company with open ownership. [8] After becoming a public company, Wesfarmers diversified its interests by acquiring other businesses.

Divisions

Home improvement and office supplies

This division is made up of Bunnings Warehouse, a retailer of home improvement and outdoor living products, servicing home and commercial customers in Australia and New Zealand, and Officeworks, a retailer and supplier of office products for home, business and education in Australia. There are 210 Bunnings "warehouse" (larger) stores, 67 Bunnings small-format stores, 36 Bunnings Trade centres and 150 Officeworks stores. Bunnings employs more than 33,000 staff and Officeworks employs more than 6,000 staff. [11]

In January 2016, Home Retail Group accepted an offer from Wesfarmers to acquire the British home improvement retailer and garden centre Homebase. Stores in the United Kingdom and Ireland began to be rebranded as Bunnings following the takeover. [12] However, following Wesfarmer's sale of Homebase to Hilco in May 2018, [13] it was reported that the 24 stores already converted would return to the "Homebase" branding. [13]

Kmart Group

In February 2016, Wesfarmers announced a restructure of its department store businesses into a single division named Department Stores, with each brand (Kmart and Target) continuing to operate independently. [14] The division was later renamed Kmart Group, and expanded to incorporate online retailer Catch.

Kmart

Kmart is a discount department store retailer in Australia and New Zealand. Kmart has more than 200 stores around Australia and New Zealand, employing more than 31,000 staff. [11] Kmart Tyre and Auto is no longer a part of Kmart after parent Wesfarmers sold the auto division to German company Continental AG. [15] Kmart Tyre and Auto has since been rebranded by Continental AG to MyCar.

Target

Target is a mid-level department store retailer in Australia. Target employs more than 24,000 staff. [11] In 2014, Wesfarmers was forced to write-down the value of Target by $680 million because of a fall in the company's profits. [16] Target Australia has no connection to the American retailer Target of similar name.

Industrials

In August 2015, Wesfarmers announced an organisational restructure to cluster its three industrial businesses, Chemicals, Energy & Fertilisers (WesCEF); Resources; and Industrial and Safety (WIS) into a single, new Industrials division. [17]

Wesfarmers Chemicals, Energy & Fertilisers

Wesfarmers Chemicals, Energy & Fertilisers (WesCEF) produces and markets chemicals, fertilisers and gas products. WesCEF has ammonia and ammonium nitrate production facilities in Western Australia, 50% of QNP ammonium nitrate production facilities in Queensland, sodium cyanide production facilities in Western Australia, PVC resin and specialty chemicals production facilities in Victoria, LPG and LNG distribution across Australia with LPG and LNG production facilities in Western Australia and fertiliser production and importation facilities in Western Australia. WesCEF employs more than 1,200 staff. [11] WesCEF businesses include CSBP, Australian Vinyls, AGR, QNP, Evol LNG, Kleenheat and Modwood.

Wesfarmers Industrial and Safety

Wesfarmers Industrial and Safety provides industrial and safety products and services in Australia and New Zealand. On 1 December 2014, Wesfamers Industrial and Safety completed the acquisition of the Workwear Group of Pacific Brands Limited. [18] Wesfarmers Industrial and Safety businesses include Blackwoods, NZ Safety, Greencap, [19] Bullivants, Coregas, Blackwoods Protector, Safety Source, Total Fasteners, Packaging House, King Gee, Hard Yakka, Stubbies and GotStock.

Other activities

Wesfarmers has a 50% interest in investment house Gresham Partners plus interests in Gresham Private Equity Funds, 50% interest in Wespine, a plantation softwood sawmill in Dardanup and a 24% interest in BWP Trust which mainly owns Bunnings Warehouses tenanted by Bunnings Group Limited. [11]

Other businesses

Wesfarmers has 100% interest in many other subsidiaries across Australia, New Zealand, India, New Caledonia, United Kingdom, Hong Kong, Indonesia, China, Bermuda and Singapore. These include BBC Hardware, Coles Ansett Travel, Coles Group Superannuation Fund, Coles Property Management, Comnet, Fosseys, Grocery Holdings Pty Ltd, Harris Technology, Howard Smith, Katies Fashions, Loyalty Pacific, Masters Home Improvement New Zealand, Morley Shopping Centre, now.com.au, Theo's Liquor, Tooronga Shopping Centre, Tyremaster, Viking Direct and World 4 Kids. [11]

Former interests

Insurance

On 16 June 2014, Wesfarmers completed the sale of its insurance broking and premium funding operations, including OAMPS Insurance Brokers in Australia, OAMPS UK, Crombie Lockwood in New Zealand, Lumley Finance and Monument Premium Financing to Arthur J. Gallagher & Co. [20] On 30 June 2014, Wesfarmers completed the sale of its insurance underwriting operations, including the WFI and Lumley brands, to the Insurance Australia Group. [21]

Coles

On 2 July 2007, Wesfarmers announced it was purchasing the Coles Group retail business for $22 billion making it the largest successful take-over in Australian corporate history. Wesfarmers took control of Coles on 23 November 2007, after paying almost $20 billion for the company. Wesfarmers had already purchased 13 per cent of the retailer in April. [22] [23]

Coles is a national supermarket, liquor, fuel and convenience retailer in Australia. As of September 2013, Coles operated 756 full-service supermarkets, 810 liquor outlets, 92 hotels, and 636 fuel and convenience stores. Coles employs more than 105,000 staff. [11] Coles' businesses include Coles Supermarkets, Coles Online, Coles Express, Vintage Cellars, 1st Choice Liquor Superstore, BI-LO, Coles Financial Services and Liquorland.

On 16 March 2018, Wesfarmers held a meeting to discuss its intention to demerge Coles, [24] [25] The demerger was effective from 21 November 2018 with Wesfarmers retaining a 15% shareholding. [26] During 2020 Wesfarmers reduced its equity in Coles to 4.9%. [27]

Wesfarmers Resources

Wesfarmers Resources owned and operated open-cut coal producing resources in Australia including the Curragh in Queensland. Wesfarmers divested its coal business, completing the process with the sale of its 40 per cent interest in the Bengalla Joint Venture to New Hope Corporation for $860 million on 3 December 2018. [28]

Wesfarmers Transport

In 1950 Wesfarmers purchased the Gascoyne Trading Company (GTC), growing it to become the largest transport operator in Western Australia. [29] [30] Until 1971 it held the sole rights for direct road transport between Carnarvon and Perth. [31] In 1973 a joint venture was formed with Downard to enter the interstate freight forwarding market between Western Australia and Victoria. [32]

In 1985, GTC purchased a 50% shareholding in Total West from Mayne Nickless. [33] In 1996, after taking full ownership of Total West, Wesfarmers merged it with GTC to form Wesfarmers Transport. [34] [35] In 2001 the business was sold to Toll Holdings. [36] [37]

Company executives

Chairmen [38]
Chief executives / general managers / managing directors [38]

Related Research Articles

Coles Supermarkets Australian supermarket chain

Coles Supermarkets Australia Pty Ltd, trading as Coles, is an Australian supermarket, retail and consumer services chain, headquartered in Melbourne as part of the Coles Group.

Hardware store Store that sells household hardware for home improvement

Hardware stores, sometimes known as DIY stores, sell household hardware for home improvement including: fasteners, building materials, hand tools, power tools, keys, locks, hinges, chains, plumbing supplies, electrical supplies, cleaning products, housewares, tools, utensils, paint, and lawn and garden products directly to consumers for use at home or for business. Many hardware stores have specialty departments unique to its region or its owner's interests. These departments include hunting and fishing supplies, plants and nursery products, marine and boating supplies, pet food and supplies, farm and ranch supplies including animal feed, swimming pool chemicals, homebrewing supplies and canning supplies. The five largest hardware retailers in the world are The Home Depot, Lowe's, Kingfisher of the United Kingdom, Obi of Germany, and Leroy Merlin of France.

Flybuys (Australia)

Flybuys is an Australian customer loyalty program equally owned by the Coles Group and Wesfarmers through joint venture Loyalty Pacific. Members can accrue points by shopping at Coles Group brands, certain Wesfarmers brands, and some third-party partners like HCF Insurance and Optus. Points can then be redeemed for money off purchases at Coles Supermarkets, Kmart, and Target stores, as well as vacations and household goods.

Homebase British home improvement retailer and garden centre

Homebase is a British home improvement retailer and garden centre with stores across the United Kingdom and Republic of Ireland. Founded by Sainsbury's and GB-Inno-BM in 1979, the company was owned by Home Retail Group from October 2006, until it was sold to the Australian conglomerate Wesfarmers in January 2016.

Bunnings Group, trading as Bunnings Warehouse, is an Australian household hardware chain. The chain has been owned by Wesfarmers since 1994, and has stores in Australia and New Zealand.

Kmart Australia Limited is an Australian-based chain of affordable retail stores owned by the Kmart Group division of Wesfarmers. The company operates 234 stores across Australia and New Zealand, consisting of 209 stores in Australia and 25 stores in New Zealand, with its head office located in Mulgrave, Melbourne. Kmart Group, the department store division of Wesfarmers, also owns and operates Target Australia and online retailer Catch.com.au.

Hardwarehouse was a home improvement chain in Australia. The chain was an offshoot of BBC Hardware, which was owned by Burns Philp and then Howard Smith Limited, and had stores in Australia and New Zealand. It was established by BBC Hardware as a way to implement and develop the adopted hardware warehouse concept which was based on overseas chains B&Q and Home Depot.

Habitat, is a brand of household furnishings in the United Kingdom and the main homewares brand within the Sainsbury's group.

Target Australia, formerly Lindsay's and later Lindsay's Target, is a mid-price department store chain owned by the Kmart Group, part of Australian retail conglomerate Wesfarmers. Target stocks clothing, cosmetics, homewares, electronics and books, and sells them through brick-and-mortar stores and Target Online. The company's head office is located in a purpose-built building in Williams Landing, Melbourne that opened in 2018.

Officeworks chain of office supply stores

Officeworks is a chain of Australian office supplies stores operated under parent company Wesfarmers.

Home Retail Group

Home Retail Group plc was a home and general merchandise retailer based in the United Kingdom. It was the parent company of Argos and Habitat, and once owned the do it yourself chain Homebase before selling it to the Australian retailer Wesfarmers in February 2016. Home Retail Group was listed on the London Stock Exchange, until it was acquired by the British supermarket company Sainsbury's for £1.4 billion on 2 September 2016.

Bi-Lo was an Australian supermarket chain owned by Wesfarmers. Once a chain of 180 outlets, Bi-Lo stores were progressively re-branded as Coles Supermarkets from 2006, or closed. On 30th of June 2017, the final store in Loganholme, Queensland closed.

Coles Group Limited is an Australian public company operating several retail chains. Its chief operations are primarily concerned with the sale of food and groceries through its flagship supermarket chain Coles, and the sale of liquor and petrol through its Coles Liquor and Coles Express outlets. Since its foundation in Collingwood, Victoria in 1914, Coles has grown to become the second-largest retailer in Australia after its principal rival Woolworths in terms of revenue.

Iluka Resources

Iluka Resources is an Australian-based resources company, specialising in mineral sands exploration, project development, operations and marketing. Iluka is the largest producer of zircon and titanium dioxide-derived rutile and synthetic rutile globally. Iluka mines heavy mineral sands and separates the concentrate into its individual mineral constituents rutile, ilmenite, and zircon. Some of the ilmenite is then processed into synthetic rutile.

Richard Goyder

Richard James Barr Goyder AO is an Australian businessman and sporting administrator who is the current chairman of the AFL Commission, the governing body of Australian Rules Football. He was previously CEO and managing director of Wesfarmers from 2005 to 2017. In October 2018, he became the new chairman of Qantas, replacing Leigh Clifford.

Fremantle Woolstores

Fremantle Woolstores were at least four large buildings on the southern side of Fremantle Harbour, in Fremantle, Western Australia.

John Bennison AM OBE was an Australian businessman known for his long involvement with Wesfarmers Limited. He began work at the company in 1954, and as managing director from 1974 to 1984 oversaw its transition from a farmers' cooperative to a publicly listed industrial conglomerate.

CSBP Company based in Western Australia

CSBP Limited is an Australian fertiliser and chemical company based in Kwinana, Western Australia. It is a subsidiary of WesCEF, which in turn is part of the industrials division of the Wesfarmers conglomerate.

Gascoyne Trading Company (GTC) was a transport company in Western Australia. It was established in 1924 by Keith Anderson and Charles Kingsford-Smith in Carnarvon. One of its early contracts was the mail run through the Gascoyne to Meekatharra. It expanded to serve industries between Perth and the Pilbara.

References

  1. 1 2 3 4 5 6 7 "2020 Annual Report" (PDF). Wesfarmers. Retrieved 15 December 2020.
  2. "Farmers and Settlers' Association of Western Australia". The Midlands Advertiser. Moora, WA. 7 November 1913. p. 3. Retrieved 14 January 2016.
  3. See Western Australian Farmers Federation for the relationship between the Co-operative and the CBH Group in its early history
  4. "Growth of the local co-op". Wesfarmers. Wesfarmers Limited. Retrieved 3 May 2016.
  5. "Acquisition of Gascoyne Trading". www.wesfarmers.com.au. Retrieved 4 October 2017.
  6. Hartley, L.R (1995). Fatigue and Driving: Driver Impairment, Driver Fatigue, And Driving Simulation. CRC Press.
  7. "Heritage Council of WA - Places Database". inherit.stateheritage.wa.gov.au. Retrieved 4 October 2017.
  8. 1 2 "Public listing". Wesfarmers. Wesfarmers Limited. Retrieved 3 May 2016.
  9. 1 2 3 "Our History". Wesfarmers. Wesfarmers Limited. Retrieved 7 March 2017.
  10. Going off script: how the $1.7b Bunnings UK disaster unfolded. The Sydney Morning Herald, 28 May 2018 accessed 19 August 2018
  11. 1 2 3 4 5 6 7 "Wesfarmers Annual Report 2013" (PDF). Retrieved 26 September 2013.
  12. "Bunnings to hit UK in $705m Homebase deal". news.com.au. 18 January 2016.
  13. 1 2 "DIY retailer Homebase sold at a huge loss for just £1". 25 May 2018. Archived from the original on 25 May 2018. Retrieved 25 May 2018. Homebase has been sold by [Wesfarmers] [..] So far 24 stores have been rebranded [but] will become Homebase stores again.
  14. "New Department Stores division and senior management changes" . Retrieved 24 February 2016.
  15. "Agreement to sell Kmart Tyre and Auto Service".
  16. "Big shakeout for Wesfarmers", Financial Review, 3 July 2014. Accessed 16 June 2015
  17. "Wesfarmers organisational restructure and senior management changes" . Retrieved 11 August 2015.
  18. "Acquisition of Pacific Brands Workwear Completed". phx.corporate-ir.net. Retrieved 1 December 2014.
  19. "greencap about". www.greencap.com.au. Retrieved 2 November 2017.
  20. "Completion of Sale of Insurance Broking and Premium Funding" . Retrieved 16 June 2014.
  21. "Completion of Sale of Insurance Underwriting Operations" . Retrieved 30 June 2014.
  22. Peter Ryan (2 July 2007). "Coles board recommends $22b takeover offer". ABC News online. Retrieved 4 July 2007.
  23. Carson, Vanda (2 July 2007). "Wesfarmers buys Coles". The Age . Melbourne, Vic. Retrieved 14 January 2016.
  24. "PowerPoint Presentation". Wesfarmers. Retrieved 16 March 2018.
  25. "News Release". Wesfarmers. Retrieved 16 March 2018.
  26. Coles splits from Wesfarmers Perth Now 15 November 2018
  27. "2020 Annual Report" (PDF). Hawthorn East, Victoria: Coles Group Limited. 24 September 2020. p. 159. Retrieved 8 December 2020.
  28. ""Completion of sale of 40 per cent interest in Bengalla"" (PDF). Retrieved 18 February 2021.
  29. Acquisition of Gascoyne Trading Wesfarmers
  30. Heytesbury buys back Bell Freightlines Canberra Times 6 May 1991 page 5
  31. Relaxation of restrictions on northern transport Truck & Bus Transportation October 1970 page 121
  32. Vic and WA transport groups in joint operation Freight & Container Transportation April 1973 page 8
  33. Gascoyne replaces Mayne Nickless in Total West venture Truck & Bus Transportation August 1985 page 60
  34. Trading a Name Truck & Bus Transportation July 1996 page 83
  35. Westrail News The Westland issue 135 May 1996
  36. Sale of WA road freight transport business Wesfarmers 2 November 2001
  37. Wesfarmers Sells Road Transport Assets Railway Digest December 2001 page 7
  38. 1 2 Leadership

Further reading