The Woolworths Limited (ASX: WOW) share price popped 7% this morning following a key announcement regarding its Home Improvement business.
In an announcement to the ASX, Woolworths said it'll buy out US-based Lowe's, its joint venture partner, to acquire the entire Home Improvement business before selling it.
Woolworths has invested $2.8 billion in the Home Improvement business, which includes the Masters and Home Timber & Hardware brands, over the past four years. However, it is loss making, and pressure has mounted from shareholders to cut its losses. Recently appointed Chairman, Gordon Cairns, said, "Our recent review of operating performance indicates it will take many years for Masters to become profitable."
With shares trading firmly higher – clearly – the myopic and irrational marketplace is cheering the company's intention to cut its losses.
