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Why Is Catch Closing Down and Is It Causing Job Losses?

Catch.com.au Closure and Job Losses

Wesfarmers has announced the closure of its online retailer Catch.com.au, marking the end of a once-thriving Australian e-commerce platform. Despite its promising beginnings, Catch struggled to compete in a rapidly evolving digital marketplace. The platform will cease operations on April 30, 2025.

Why Is Catch Closing?

Wesfarmers attributes the decision to shut down Catch to intense competition in Australia’s online retail sector. Rivals like Amazon, Kogan, Temu, and Shein have reshaped the industry, leaving Catch unable to keep up.

Wesfarmers’ Managing Director Rob Scott acknowledged the platform’s struggles. He said Wesfarmers had gained valuable digital insights through the Catch acquisition but ultimately decided the closure was in shareholders’ best interests.

Catch’s financial performance worsened over the past three years, accumulating losses exceeding $350 million. Wesfarmers expects further losses of $38–$40 million in the half-year to December 31, 2024.

Also Read: Wesfarmers to Close Catch Amid Rising E-Commerce Competition

Catch’s Journey

Catch.com.au began as Catch of the Day in 2006, founded by Gabby and Hezi Leibovich. The platform quickly gained traction, becoming one of Australia’s earliest online retail success stories. In 2019, Wesfarmers acquired the business for $230 million.

At the time of acquisition, analysts valued Catch at over $1 billion. However, its fortunes soon declined. Catch posted a $20 million EBITDA in its first year under Wesfarmers but spiralled into losses, including an $88 million EBITDA loss in FY22.

Catch Fulfillment Centres Repurposed

Catch’s fulfilment warehouses in Sydney and Melbourne are running at less than 50% capacity. Wesfarmers plans to transfer these facilities to Kmart Group. Ian Bailey, Managing Director of Kmart Group, explained that the handover would enhance customer experience and reduce costs.

Bailey stated that the transition would enable faster deliveries and reduce pressure on Kmart’s busy stores. Digital capabilities from Catch, including personnel and supplier relationships, will also integrate into other Wesfarmers divisions.

The Rise and Fall of Catch

Catch thrived during its early years, capitalising on a nascent Australian e-commerce market. Before Amazon’s arrival in Australia, Catch held a strong position, even attracting significant venture capital investment.

However, the landscape changed dramatically with the arrival of global players like Amazon, Shein, and Temu. These competitors offered aggressive pricing and extensive product ranges, diverting customer loyalty.

Catch’s financial woes also coincided with broader industry challenges. During the pandemic, online retail boomed, but Catch struggled to capture sustained growth.

What Happens to Catch Connect?

While Catch.com.au is shutting down, Catch Connect will continue to operate. Catch Connect, a separate mobile service provider affiliated with Catch, assured customers of uninterrupted service.

A spokesperson for Catch Connect stated, “We will continue to offer great value products and exceptional customer service.” Existing users can recharge and use their services without disruption.

The Cost of Closing Catch

The closure of Catch.com.au will cost Wesfarmers an estimated $50–$60 million in one-off expenses. This includes non-cash costs of $25–$30 million.

The closure of Catch will result in the loss of approximately 190 jobs, according to NewsWire. Additionally, around 100 e-commerce positions will be reassigned to other brands within Wesfarmers’ portfolio, such as Kmart, Target, and Bunnings. While 100 employees will be redeployed, the remaining 190 positions will be eliminated. Wesfarmers estimates that the shutdown process will cost between $50 million and $60 million. Furthermore, Catch is expected to report a significant operating loss of up to $40 million for the first half of the 2024-25 financial year.

Wesfarmers managing director, Rob Scott, stated that the decision to close Catch was in the best interests of shareholders. He explained that shutting down Catch would allow the company to better leverage the valuable assets and capabilities developed through the platform. Despite Catch’s financial struggles, Mr. Scott pointed out that the venture had provided crucial insights, which accelerated Wesfarmers’ digital transformation. He also noted that Catch had played an important role in the development of the OnePass membership program, enhancing the group’s retail offerings.

What Industry Experts Say

Ruslan Kogan, co-founder of Kogan.com, expressed disappointment over the decision. He claimed he had offered to acquire Catch to revitalise its operations. Despite his efforts, Wesfarmers opted for closure.

Catch’s founders, the Leibovich brothers, also experienced setbacks. Their subsequent ventures, such as Little Birdie, struggled to replicate Catch’s initial success.

Lessons from Catch’s Closure

Catch’s shutdown highlights the challenges of sustaining e-commerce operations in a competitive market. While Wesfarmers gained digital expertise from the acquisition, the cost of maintaining Catch proved unsustainable.

The shifting preferences of Australian shoppers and the dominance of global competitors underscore the need for agility in e-commerce. Wesfarmers now focuses on strengthening its omnichannel retail brands, such as Kmart and Target, to meet evolving customer expectations.

Conclusion

Catch.com.au’s closure marks the end of an era in Australian e-commerce. Once a pioneer, it now joins the list of online retailers unable to survive the pressures of a fast-changing digital landscape.

While Catch fades into history, its legacy as an early innovator in Australian e-commerce remains a reminder of how quickly market dynamics can change.

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