Bunnings CEO to retire, Kmart sales get Anko boost

Kmart is planning to roll out more furniture and homewares-only stores across the country and introduce its popular in-house brand Anko to more customers in the Philippines.

Retail giant and Kmart owner Wesfarmers’ chief executive Rob Scott said K Home, the chain’s furniture and homewares showroom that opened in Melbourne in June, was performing strongly.

“We’re getting really good growth in the category that was only previously available online by putting that product into stores. We’re now making that available to more customers,” Scott told reporters on Thursday morning. “We are looking forward to opening more stores.”

Customers are not only buying furniture in the physical stores, but adding more items to their shopping baskets, he said. But there was more work to do.

“Whenever you launch a new store, you want to make sure you really get the model right, that you get it optimised before you ramp it up. So [Kmart managing director] Aleks [Spaseska] and the team still have a bit of work to do there,” Scott said.

He made the comments after unveiling Wesfarmers’ full-year results on Thursday morning. Kmart’s sales rose 2.8 per cent to $11.8 billion and profits grew 6 per cent to $1.1 billion in what Scott described as a “standout, exceptional result”, although warmer-than-expected weather meant clothing sales came in slightly below expectations.

Meanwhile, sister chain Target’s apparel range is “starting to resonate”, attracting new customers and selling less stock on discount, he said.

Elsewhere, Anko Global, the international spin-off of Kmart’s popular private-label brand that constitutes about 85 per cent of all Kmart products, had “started to slow down” as a result of retailer anxiety around impending tariffs.

“It [was] quite challenging to actually get a lot of foreign retailers to commit when there was so much volatility around the tariff situation, so we’ve really just doubled down on our activities in the Philippines,” said Scott. Anko has opened six stores in the Philippines. “Subject to the performance of those, we will consider ramping it up over the coming years.”

Revenue across the Wesfarmers conglomerate rose 3.4 per cent to $47.3 billion in the year to June, and net profits excluding significant items lifted 8.3 per cent to $2.9 billion. The company also owns the Bunnings, Officeworks and Priceline chains, a chemicals, energy and fertiliser business, a health and pharmaceutical division, and an industrial supplies business.

Over the year, Bunnings grew sales by 4.1 per cent to $20.4 billion, driven by DIY home repairs and renovations as it broadened its range of tools, pet and automotive offers.

The company said Bunnings chief executive Mike Schneider will retire in February, with chief customer officer Rachael McVitty set to take over the role.