Wesfarmers

Wesfarmers Limited is an Australian conglomerate, headquartered in Perth, Western Australia, with interests predominantly in Australian and New Zealand retail, chemicals, fertilisers, coal mining and industrial and safety products. With AU$65.98 billion in the 2016 financial year, it is the largest Australian company by revenue, overtaking Woolworths and BHP.[3] Wesfarmers is the largest private employer in Australia, with approximately 220,000 employees.[4]

Wesfarmers Limited
Public
Traded asASX: WES
ISINAU000000WES1 
IndustryConglomerate
PredecessorColes Group 
Foundedas Westralian Farmers Co-Operative Limited in 1914 (1914)
Headquarters40 The Esplanade,
Perth, Western Australia, Australia
Area served
Australia
India
Ireland
New Zealand
Key people
Michael Chaney, Chairman
Rob Scott, CEO
RevenueA$68.44 billion (2017)
A$4.40 billion (2017)
A$2.87 billion (2017)
Total assetsA$40.12 billion (2017)
Total equityA$23.94 billion (2017)
Number of employees
223,000[1]
SubsidiariesBunnings Warehouse, Officeworks, Officeworks BusinessDirect, Harris Technology, Kmart, Target, Catch.com.au, Curragh Queensland Mining, Bengalla Mining Company*, Koukia*, Blackwoods, Bakers, Total Fasteners, Bullivants, Wesfarmers Industrial & Safety NZ, CSBP, Workwear Group, Australian Gold Reagents*, Kleenheat, Unigas*, Coregas, Gresham Partners Group*, Wespine Industries*
* Joint ventures
WebsiteWesfarmers.com.au
Footnotes / references
[2]

Wesfarmers was founded in 1914 as a co-operative to provide services and merchandise to Western Australian farmers. It was listed on the Australian Securities Exchange in 1984 and grew into a major retail conglomerate.

History
1930s letterhead with company details of that time

Westralian Farmers Co‐operative Limited was formed in 1914 as a cooperative company by the Farmers' and Settlers' Association of Western Australia, to acquire the assets of the West Australian Producers' Union, to be focused on the provision of services and merchandise to the Western Australian rural community.[5][6] By 1919, more than 65 local co-operative companies were acting as agents for Westralian Farmers Limited.[7]

In 1924, it established the first public radio station in Western Australia with 6WF, before it passed into the hands of the Australian Broadcasting Commission in 1929, now called ABC Radio Perth

By the 1940s, the company's business included "being wheat and general merchants; country distribution for Commonwealth Oil Refineries Ltd; wool, livestock, skin and produce auctioneers; grain & fruit exporters; insurance underwriters; acquiring agents for the wheat pool of W.A." Known as Westralian Farmers Limited, it had premises in various locations within the Perth central business district. In the 1940s there were premises at 563-571 Wellington Street. They also had premises in Newman Street in Fremantle.

In 1949, Wesfarmers acquired Ashburton Transport, which at the time was lossmaking. The following year it also acquired its major competitor Gascoyne Trading, combining the operations of the two companies to supply the northwest of Western Australia. Along with wool and mail, it carted bananas from Carnarvon to Perth, returning with stores and mail from Perth. Gascoyne Trading introduced refrigerated transport to the region and three trailer road trains that now carry loads up to 115 tonnes.[8][9][10]

In 1984, Westralian Farmers Co-operative Limited formed Wesfarmers Limited, restructuring from a co-operative to a public company and listed on the Australian Securities Exchange on 15 November 1984. Initially the Co-operative retained 60% of the ordinary shares, guaranteeing that the co-op's farmer members retained control, and the rest was distributed to its members.[11]

In 1991, 19 m³ of the records of Westralian Farmers Co-operative were deposited with the J S Battye Library in Perth.

Rural business, Dalgety Farmers and Wesfarmers Landmark

Bought in January 1993 the integration of Dalgety Farmers with Wesfarmers proved more difficult than expected. For a time the merged rural agency and merchandise business was Wesfarmers Dalgety until renamed Wesfarmers Landmark in March 2001 after IAMA Limited was brought in. Landmark, Wesfarmers foundation business, was sold to AWB Limited (originally the Australia Wheat Board) in August 2003.[12]

Bunnings

An initial investment in 10 percent of Bunnings in February 1987 reached full ownership in January 1994. Bunnings bought UK retailer Homebase in February 2016 and Britain's first Bunnings store opened twelve months later in February 2017.[12] They were 265 well-located stores and Wesfarmers believed Bunnings' management would greatly improve their modest profits. The plan was to make changes gently but tactics changed and local management, perceived as under-performing, was removed and replaced by expatriate management. The expatriate management's changes alienated the existing customer base and, aided by a poor retailing climate, brought a rapid decline into losses. A strategic review by Wesfarmers resulted in the May 2018 sale of the business to Hilco Capital at a loss of (Australian) $1.96 billion.[13]

Australian Railroad Group

Australian Railroad Group begun in a joint venture with Genesee & Wyoming by the purchase of Westrail at the beginning of 2000. It was sold in 2006 to Babcock & Brown and Queensland Rail.[12]

End of co-operative ownership

In 2001, Wesfarmers become a freely-traded publicly listed company with open ownership.[11] After becoming a public company, Wesfarmers diversified its interests by acquiring other businesses.

Divisions

Home improvement and office supplies

This division is made up of Bunnings Warehouse, a retailer of home improvement and outdoor living products, servicing home and commercial customers in Australia and New Zealand, and Officeworks, a retailer and supplier of office products for home, business and education in Australia. There are 210 Bunnings "warehouse" (larger) stores, 67 Bunnings small-format stores, 36 Bunnings Trade centres and 150 Officeworks stores. Bunnings employs more than 33,000 staff and Officeworks employs more than 6,000 staff.[14]

In January 2016, Home Retail Group accepted an offer from Wesfarmers to acquire the British home improvement retailer and garden centre Homebase. Stores in the United Kingdom and Ireland began to be rebranded as Bunnings following the takeover.[15] However, following Wesfarmer's sale of Homebase to Hilco in May 2018,[16] it was reported that the 24 stores already converted would return to the "Homebase" branding.[16]

Department stores

In February 2016, Wesfarmers announced a restructure of its department store businesses into a single division named Department Stores, with each brand continuing to operate independently.[17]

Kmart

Kmart is a discount department store retailer in Australia and New Zealand, and a provider of retail automotive services, repairs and tyres in Australia. Kmart has 228 Kmart stores and 259 Kmart Tyre & Auto Service centres. Kmart employs more than 31,000 staff.[14]

Target

Target is a mid-level department store retailer in Australia. Target has 305 stores. Target employs more than 24,000 staff.[14] In 2014, Wesfarmers was forced to write-down the value of Target by $680 million because of a fall in the company's profits.[18]

Industrials

In August 2015, Wesfarmers announced an organisational restructure to cluster its three industrial businesses, Chemicals, Energy & Fertilisers (WesCEF); Resources; and Industrial and Safety (WIS) into a single, new Industrials division.[19]

Wesfarmers Chemicals, Energy & Fertilisers

Wesfarmers Chemicals, Energy & Fertilisers (WesCEF) produces and markets chemicals, fertilisers and gas products. WesCEF has ammonia and ammonium nitrate production facilities in Western Australia, 50% of QNP ammonium nitrate production facilities in Queensland, sodium cyanide production facilities in Western Australia, PVC resin and specialty chemicals production facilities in Victoria, LPG and LNG distribution across Australia with LPG and LNG production facilities in Western Australia and fertiliser production and importation facilities in Western Australia. WesCEF employs more than 1,200 staff.[14] WesCEF businesses include CSBP, Australian Vinyls, AGR, QNP, Evol LNG, Kleenheat and Modwood.

Wesfarmers Resources

Wesfarmers Resources owns and operates world-scale open-cut coal producing resources in Australia, and has Curragh in Queensland which produces metallurgical coal for export and steaming coal for domestic power generation and 40% of Bengalla in New South Wales, which is operated by Coal & Allied and produces export steaming coal for Asia. Wesfarmers Resources employs more than 650 staff.[14]

Wesfarmers Industrial and Safety

Wesfarmers Industrial and Safety provides industrial and safety products and services in Australia and New Zealand. On 1 December 2014, Wesfamers Industrial and Safety completed the acquisition of the Workwear Group of Pacific Brands Limited.[20] Wesfarmers Industrial and Safety businesses include Blackwoods, NZ Safety, Greencap,[21] Bullivants, Coregas, Blackwoods Protector, Safety Source, Total Fasteners, Packaging House, King Gee, Hard Yakka, Stubbies and GotStock.

Other activities

Wesfarmers has a 50% interest in investment house Gresham Partners plus interests in Gresham Private Equity Funds, 50% interest in Wespine, a plantation softwood sawmill in Dardanup and a 24% interest in BWP Trust which mainly owns Bunnings Warehouses tenanted by Bunnings Group Limited.[14]

Other businesses

Wesfarmers has 100% interest in many other subsidiaries across Australia, New Zealand, India, New Caledonia, United Kingdom, Hong Kong, Indonesia, China, Bermuda and Singapore. These include BBC Hardware, Coles Ansett Travel, Coles Group Superannuation Fund, Coles Property Management, Comnet, Fosseys, Grocery Holdings Pty Ltd, Harris Technology, Howard Smith, Katies Fashions, Loyalty Pacific, Masters Home Improvement New Zealand, Morley Shopping Centre, now.com.au, Theo's Liquor, Tooronga Shopping Centre, Tyremaster, Viking Direct and World 4 Kids.[14]

Former interests

Insurance

On 16 June 2014, Wesfarmers completed the sale of its insurance broking and premium funding operations, including OAMPS Insurance Brokers in Australia, OAMPS UK, Crombie Lockwood in New Zealand, Lumley Finance and Monument Premium Financing to Arthur J. Gallagher & Co.[22] On 30 June 2014, Wesfarmers completed the sale of its insurance underwriting operations, including the WFI and Lumley brands, to the Insurance Australia Group.[23]

Coles

On 2 July 2007, Wesfarmers announced it was purchasing the Coles Group retail business for A$22 billion making it the largest successful take-over in Australian corporate history. Wesfarmers took control of Coles on 23 November 2007, after paying almost A$20 billion for the company. Wesfarmers had already purchased 13 per cent of the retailer in April.[24][25]

Coles is a national supermarket, liquor, fuel and convenience retailer in Australia. As of September 2013, Coles operates 756 full-service supermarkets, 810 liquor outlets, 92 hotels, and 636 fuel and convenience stores. Coles employs more than 105,000 staff.[14] Coles' businesses include Coles Supermarkets, Coles Online, Coles Express, Vintage Cellars, 1st Choice Liquor Superstore, BI-LO, Coles Financial Services and Liquorland.

On 16 March 2018, Wesfarmers held a meeting to discuss its intention to demerge from Coles,[26][27] The demerge was effective from 21 November 2018 with Wesfarmers retaining a 15% shareholding.[28]

Company executives
Chairmen[29]
Chief executives / general managers / managing directors[29]
gollark: I think I *can* mine fuel in all my mines right now, though.
gollark: Well, they can ASK.
gollark: Do what, RVP people?
gollark: Oh. We do. Oopsie!
gollark: ```osmarks@fenrir /d/p/memes-or-something [123]> git beesgit: 'bees' is not a git command. See 'git --help'.The most similar command is rebase```

References
  1. http://www.wesfarmers.com.au/who-we-are/who-we-are
  2. "2015 Annual Report". Retrieved 17 September 2015.
  3. Hatch, Patrick. "Coles owner Wesfarmers moves up to Australia's top company by revenue, beating Woolworths, Rio Tinto and BHP". Sydney Morning Herald. Retrieved 15 March 2016.
  4. "Who we are". Retrieved 9 February 2018.
  5. "Farmers and Settlers' Association of Western Australia". The Midlands Advertiser. Moora, WA. 7 November 1913. p. 3. Retrieved 14 January 2016.
  6. See Western Australian Farmers Federation for the relationship between the Co-operative and the CBH Group in its early history
  7. "Growth of the local co-op". Wesfarmers. Wesfarmers Limited. Retrieved 3 May 2016.
  8. "Acquisition of Gascoyne Trading". www.wesfarmers.com.au. Retrieved 4 October 2017.
  9. Hartley, L.R (1995). Fatigue and Driving: Driver Impairment, Driver Fatigue, And Driving Simulation. CRC Press.
  10. "Heritage Council of WA - Places Database". inherit.stateheritage.wa.gov.au. Retrieved 4 October 2017.
  11. "Public listing". Wesfarmers. Wesfarmers Limited. Retrieved 3 May 2016.
  12. "Our History". Wesfarmers. Wesfarmers Limited. Retrieved 7 March 2017.
  13. Going off script: how the $1.7b Bunnings UK disaster unfolded. The Sydney Morning Herald, 28 May 2018 accessed 19 August 2018
  14. "Wesfarmers Annual Report 2013" (PDF). Retrieved 26 September 2013.
  15. "Bunnings to hit UK in $705m Homebase deal". news.com.au. 18 January 2016.
  16. "DIY retailer Homebase sold at a huge loss for just £1". 25 May 2018. Archived from the original on 25 May 2018. Retrieved 25 May 2018. Homebase has been sold by [Wesfarmers] [..] So far 24 stores have been rebranded [but] will become Homebase stores again.
  17. "New Department Stores division and senior management changes". Retrieved 24 February 2016.
  18. "Big shakeout for Wesfarmers", Financial Review, 3 July 2014. Accessed 16 June 2015
  19. "Wesfarmers organisational restructure and senior management changes". Retrieved 11 August 2015.
  20. "Acquisition of Pacific Brands Workwear Completed". phx.corporate-ir.net. Retrieved 1 December 2014.
  21. "greencap about". www.greencap.com.au. Retrieved 2 November 2017.
  22. "Completion of Sale of Insurance Broking and Premium Funding". Retrieved 16 June 2014.
  23. "Completion of Sale of Insurance Underwriting Operations". Retrieved 30 June 2014.
  24. Peter Ryan (2 July 2007). "Coles board recommends $22b takeover offer". ABC News online. Retrieved 4 July 2007.
  25. Carson, Vanda (2 July 2007). "Wesfarmers buys Coles". The Age. Melbourne, Vic. Retrieved 14 January 2016.
  26. "PowerPoint Presentation". Wesfarmers. Retrieved 16 March 2018.
  27. "News Release". Wesfarmers. Retrieved 16 March 2018.
  28. https://www.perthnow.com.au/news/australia/coles-splits-from-wesfarmers-bc-5967299884001
  29. Leadership

Further reading
  • Smith, Kevin P.(1984) A bunch of pirates: the story of a farmer co-operative: Wesfarmers Perth, W.A : Westralian Farmers Co-operative. ISBN 0-9591897-0-X
  • (2003) 50 years of powering Western Australia : from Western Colleries to Wesfarmers Coal. Collie, W.A.: Wesfarmers Premier Coal.
  • Thompson, Peter (2014) Wesfarmers 100: The People's Story 1914-2014 Perth, W.A. ISBN 9781742584997
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