Now Woolies? Five firms on hard times in the past year
WOOLWORTHS is going to sack 500 workers, re-deploy 1000 more and shut down stores across Australia, but why?
While its revenue for the year still topped $2.5 billion, all is not well at Australia's supermarket giant.
Its announcement this morning is only the latest example of enormous companies in Australia that appear too big to ever hit rough seas, then suddenly they are in dire straits.
Here are some of the most massive firms to hit hard times:
Why does a supermarket powerhouse which earned $2.5 billion in the past year need to sack staff?
Apparently it's part of top boss Brad Banducci's "turnaround" efforts for the chain, which has 960 supermarkets across the country.
Even with that enormous footprint, Woolies will sack 500 staff, shift another 1000 out of its corporate offices.
It will shut down 21 supermarkets as soon as it can, then consider closing the doors on another 21.
Despite its presence in almost every rural and regional centre across the country, the giant has somehow landed in the rough.
No word yet on what stores will be affected.
Although this also counts as a Woolworths problem: Masters Home Improvement has been plagued with problems.
Remember when they and Bunnings were in a winner-take-all war to take our DIY dollars? Well the winner took all, and it wasn't Masters.
In January the company admitted it was burning cash and "will take many years to become profitable".
Instead of fighting that fight, it pulled the plug.
As its owners, Woolworths announced it would attempt to sell the businesses or shut them all down.
Some reports suggest Masters may now merge with Mitre 10.
Rough year for Woolworths, huh?
3. EAGLE BOYS
THEY were the Australian success story we couldn't get enough of.
They took on the big American pizza chains -- with an eagle as their logo no less -- and were considered a contender.
After delivering top notch pizzas for close to 30 years, Eagle Boys suddenly fell into the hands of administrators last week.
The company's founder had been gone for 10 years, and he accused the equity firm that took over as making "strategic mistakes".
The stores haven't been shut down, but its future hangs in the balance.
4. DICK SMITH
You were the darling of tech-heads everywhere. You lured us in with your routers, with your gadgetry knowledge and with a promise that your staff knew what they were talking about.
Alas, another tale of woe when founder Dick Smith left the business.
This saga has been going since at least 2012 when a private equity firm took over ownership from Woolworths. It then floated the company and sold the rest of its shares.
In December, Dick Smith admitted that all its stock was worth $60 million less than it thought.
A month later it was in receivership. The once all-conquering electronics giant will now live on as an online-only marketplace. A shell of its former glory.
5. PEABODY ENERGY
This isn't a household name for a lot of people, but if you know anything about mining, you know about Peabody.
The American mining giant was the world's largest and took over a chunk of Queensland mines at the height of the mid-noughties boom when it snapped up Macarthur Coal.
It has six mines in Central Queensland and another three in New South Wales.
Taking a look back, in just three months in 2010 the company's profit increased 51% to US$324 million.
Think about that. 51% in three months. That's across all its global operations, although a fair chunk came from the ridiculous mining boom here in Australia.
By 2013 it was cutting workers, announced 450 contractors would go.
In April this year, the world's largest mining company filed Chapter 11 for its American companies in the US bankruptcy court.
It's blamed -- in part -- on how much Peabody borrowed while trying to make the most of the mining boom in Australia.
No Australian arms of Peabody were included in the bankruptcy notice and continue to operate as usual.