Catch taking “decisive action” against $108 million loss

Wesfarmers subsidiary Catch has overhauled leadership, headcounts and inventory following a $108 million loss in FY22.   

Speaking at the Wesfarmers’ Strategy Briefing Day, OneDigital MD Nicole Sheffield confirmed the digital marketplace has appointed new heads across retail, technology and supply chain. This followed the appointment of Brendan Sweeney as the new managing director in July, 2022.  

As part of the consolidation strategy, Catch has also reduced overall headcount by 37%, exited from “unprofitable” ranges in the 1P business. The marketplace has cleared excess inventory, reduced fulfilment costs and marketing spend.

Sheffield said Catch is seeing positive indicators in recent results.

“We have reduced losses every month since October last year, and we’re seeing improved customer NPS scores,” she continued. “Since the start of the financial year, we’ve exited approximately 25% of our 1P range, as we are focused on providing a more targeted profitable offer.

“Our new Moorebank fulfilment centre has reduced its pick and pack costs per unit by over 25% through core system improvements and moving to a more optimised labour model.

“And while we are pleased with these recent results, we recognise that there is much more to be done.”

Sheffield said the business will continue optimising its 1P range in FY24. 

“We will continue to exit unprofitable lines and clear through excess inventory,” she confirmed. “The 1P range will also be reshaped to focus on curating a more targeted range for our most loyal customers which are young families.

The revised range will focus on categories such as basic apparel, homewares, baby and pantry items.

Catch has also implemented new cost-cutting programs at its two fulfilment centres. These include exiting the majority of big and bulky stock, as well as new technology to reduce the need for large box packaging with smaller items.

“In the second half, Catch implemented strong controls and cost disciplines across the business and further actions will be taken to lower discretionary costs and reduce and rephase technology spend where we can,” Sheffield said.

At the front end, Catch has been harnessing Wesfarmers’ group loyalty program OnePass.

“Catch is uniquely positioned to benefit from increased traffic and cross-shopping activity as OnePass scales,” Sheffield said. “And we already see from the data that Catch’s most frequent shoppers are OnePass subscribers.”

“But ultimately the success of Catch will come from a consistent delivery of a strong value proposition for our customers.”