Wesfarmers has confirmed Catch will cease to operate as a standalone business by Q4 of the 2025 financial year, nearly five years after the ASX-listed retail giant acquired the Australian online retailer for $230 million.

The e-commerce fulfilment centres of Catch will be transferred to Kmart Group, while select digital capabilities developed in Catch will be moved to Wesfarmers’ retail divisions. According to the company, the move is expected to eliminate losses associated with Catch as a standalone entity and strengthen the omnichannel offerings of the retail divisions.

In a statement, Wesfarmers said its retail divisions have significantly enhanced their data and digital operations since it first acquired Catch in June 2019, recording more than $3 billion in e-commerce sales and 220 million monthly digital interactions with customers in the 2024 financial year. Currently, Wesfarmers’ retail divisions represent the largest non-food, omnichannel retail group in Australia.

“The recent surge in competitive intensity in the Australian e-commerce sector has impacted Catch’s financial performance and growth prospects,” said Wesfarmers MD, Rob Scott. “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.

“In this environment, the Group’s retail and health businesses, with their leading omnichannel offerings and trusted brands, are better positioned to respond as the market and customer expectations evolve. These businesses are supported by extensive store networks, leading e-commerce platforms, the Group’s shared data asset and complementary loyalty and membership programs, including OnePass. Together, these elements provide the opportunity to cost-effectively scale the Group’s customer propositions, helping create shareholder value.”

The dedicated e-commerce fulfilment capabilities at its Moorabank, New South Wales and Truganina, Victoria fulfilment centres will be transferred to Kmart Group in the fourth quarter of the 2025 financial year. The transition of Catch’s fulfilment centres is expected to have a positive but not material impact on Kmart Group earnings in the 2026 financial year, with benefits expected to increase as online sales grow.

“Kmart Group can better utilise Catch’s fulfilment centres, which are currently less than 50 per cent utilised,” Ian Bailey, Kmart Group Managing Director, added. “The transition will result in faster deliveries to customers at a lower unit cost, while relieving pressure on our busy stores.”

Wesfarmers expects to record one-off costs associated with the wind down and transition of Catch between $50 million and $60 million, to be included in the results for the second half of the 2025 financial 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.

Meanwhile, Wesfarmers also revealed plans to extend out its retail media play via its growing OneDigital offering.

The company reported OneDigital continued to accelerate the Group’s data and digital ambitions, offering customers a more rewarding omnichannel experience across the retail and health divisions. As a result, OneDigital will now accelerate the development of a Group retail media network. This will include an investment in shared systems, data and sales capabilities to commercialise retail media across the retail and health divisions.

The operating loss for OneDigital (excluding Catch) is expected to be approximately $70 million for the 2025 financial year.