It seems the Chinese walls may have collapsed at some big-hitting city institutions after The Australian newspaper this morning reported rumours that supermarket group Woolworths Limited (ASX: WOW) was considering selling its Big W homeware business.
The reports have been bluntly denied by Woolworths and Credit Suisse the investment bank The Australian newspaper identified as being a party to the talks.
Big W's performance has been a source of big disappointment for investors with comparable earnings down 18.1% in the last financial year and a tough outlook based on a competitive discount retailer environment.
Rivals include Kmart and Target owned by retailing nemesis Wesfarmers Ltd (ASX: WES), while The Reject Shop Ltd (ASX: TRS) is also a significant presence in the discount retailing space.
The Masters Home Improvement business operated by Woolworths has also disappointed recently with the company blaming competition and the Federal Budget's impact on consumer confidence.
With Woolworths' plans to build new growth not travelling smoothly it remains as reliant as ever on the strength of its food and liquor businesses. Sales and margin growth here remain impressive and Woolworths should remain near the top of investors' shopping lists.
