Losses at Woolworths’ Masters hardware offshoot appear to be...

Losses at Woolworths’ Masters hardware offshoot appear to be shrinking marginally as its US joint venture partner Lowe’s spruiks signs of “progress”.
Masters, which has reportedly drawn around $3 billion worth of investment from the two groups, has struggled to find a place in the Australian market amid strong competition from the Wesfarmers-owned market leader Bunnings and reports of ill-advised store placement.
However, a turnaround strategy at the fledgling business is gathering momentum, according to Lowe’s.
The US heavyweight — which owns one-third of Masters — said a new format that increases the range of product and resets the layout of the stores has begun to gain traction with customers.
“We’re seeing great performance with the new format compared to the original,” Robert Niblock, chairman and CEO of Lowe’s, said as the US group delivered its second-quarter results overnight.
The latest earnings release suggested the flow of red ink stemmed marginally in the second quarter of the calendar year, with the numbers pointing to a $US14 million ($A19.1m) quarterly loss for Lowe’s in the venture.
That suggests a $57.3m quarterly loss for the entire Masters operation, an improvement on the $66m loss in the first quarter of the calendar year.
However, it is a far cry from expectations of profitability in 2015 when the home improvement offering was launched in 2010. That forecast was tweaked to 2016 in March last year before being abandoned later in the same year.
There is now no target date for profitability in the public domain.
The observations from Mr Niblock came in the wake of a trip to Australia last week for a joint venture board meeting. The Lowe’s boss took the opportunity to take a closer look at the changes made to operations in recent months, hinting he left with greater confidence in the firm’s direction.
“Overall, (I was) very impressed in the visit I had last week and the progress I see the team making down there,” he said.
The comments precede the release of Woolworths’ (WOW) full-year results, which are due out on August 28.