Kogan shares climb as e-commerce rival Catch winds down
Make us a preferred source
Make us a preferred source on Google
More news: Kogan shares jumped on the ASX after Wesfarmers announced the wind down of its e-commerce rival Catch.
Kogan shares were up 4.3% to $5.85 by 2:30pm AEDT, extending gains of more than 30% over the last 12 months.
Citi said that the closure of Catch is a "net positive" for Kogan, seeing as it is a direct competitor, although potential benefits may be small.
The analysts noted that only a portion of Catch customers will find their way to Kogan, and Catch's closure reflects broader difficulties for domestic online marketplaces that face stiff competitions from Amazon, eBay and Temu.
Wesfarmers shares rise on Catch closure
More news: Shares in Wesfarmers edged higher on the ASX after it announced that its e-commerce retail business Catch will cease to trade as a standalone entity.
Wesfarmers shares were up 0.7% to $72.25 by 2pm AEDT, extending gains of around 25% over the last 12 months.
Catch's fulfilment centres will be transferred to Kmart Group later this year.
Wesfarmers to wind down Catch business, transition fulfilment centres to Kmart
The news: Conglomerate Wesfarmers has announced that its e-commerce retailer Catch will cease to trade as a standalone business in the fourth quarter of the 2025 financial year, with its fulfilment centres set to be transferred to Kmart Group.
The numbers: Wesfarmers, which owns Kmart, expects to record one-off costs associated with the wind down and transition of Catch of between $50 million and $60 million, which will be included in its second-half results.
This amount does not include the operating losses Catch will incur from trading in the second half of the year. Catch is expected to report an operating loss before tax of between $38 million and $40 million for the half-year ended 31 December 2024.
The context: Wesfarmers said the wind down and transition of Catch will eliminate the business' losses. Select digital capabilities developed in Catch will also be transferred to Wesfarmers' retail divisions.
Westfarmers acquired Catch in 2019. However, the group noted that a recent increase in competitive intensity in the Australian e-commerce sector has impacted Catch's financial performance and growth prospects.
The transition of Catch's e-ecommerce fulfilment capabilities to Kmart is expected to improve the customer experience and efficiency of Kmart's e-commerce operations. Wesfarmers said the move should have a "positive but not material" impact on Kmart earnings in the 2026 financial year, with benefits expected to increase as online sales grow.
The company said that affected staff will be redeployed across the group where possible.
What they said: "While Catch's financial performance has been challenging, we have gained valuable insights and capabilities that have accelerated the group's digital transformation and supported the development of the OnePass membership program," said Wesfarmers managing director Rob Scott.
Outgoing Kmart managing director Ian Bailey said: "Kmart Group can better utilise Catch's fulfilment centres, which are currently less than 50% utilised".
"The transition will result in faster deliveries to customers at a lower unit cost, while relieving pressure on our busy stores."
The sources: ASX announcement, Citi research
