Mitre 10 upsets Woolworths

Woolworths has threatened Mitre 10 with the Australian Competition & Consumer Commission after the home improvement retailer allegedly invited up to 20 of Home Timber & Hardware’s best performing franchisees to the Metcash-owned hardware business’ annual expo.

This comes as Woolworths announced its exit from the home improvement business.

The majority of Mitre 10 and Home Timber & Hardware businesses are operated by independent business owners, and with the departure of Master’s, both brands are pushed maintain their network and successful franchisees.

Metcash had reportedly put its hand up for the Danks-supplied Home chain as early as mid-2015. Acquisition of the Home business, supported by a number of the chain’s major investors, would create a major hardware competitor with the size and reach to stand up to dominate market player, Bunnings.

However, a hardware source also said that if Mitre 10 is able convince the best performing Home chain franchisors to join their brand, the final sale price for the business is likely to be reduced.

“If you’re about to go into negotiations over selling your Home stores and the top stores defect to Mitre 10 it shifts the ground,” said the source.

According to a report by Fairfax Media, Mark Laidlaw, Mitre 10 chief, said that Woolworths had sent the retailer a letter warning representatives at the Gold Coast summit to limit their conversations to “non-business” matters. Of the 20 believed to have been invited to the conference, one attendee said that at least a dozen were in attendance.

Insiders suggest that Woolworths sent the hardware chain a letter as a reminder of its requirements under competition law and alluding Mitre 10 could be breaching them by inviting the Home Timber & Hardware franchisees to the event.

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