Woolworths has admitted defeat over its failed home improvement experiment – announcing today that Masters Home Improvement will either be sold or will close down completely due to heavy financial losses that would take years to overcome.

The call to either sell or close Masters puts more than 7,000 jobs at risk across the chain’s network of Australian stores.

The announcement comes at an embarrassing time for Woolworths following rival hardware giant Bunnings’s announcement that it plans to enter the United Kingdom (UK) hardware market.

Woolworths stated that it will exercise its call option over the 33.3 per cent interest in Hydrox Holdings Pty Ltd. Hydrox operates both Masters and Home Timber & Hardware under a joint venture agreement titled Home Improvement. This comes following notice of Lowe’s election to exercise its “˜put’ option under the joint venture agreement.

Gordon Cairns, Woolworths Chairman, said, “Whilst we will move as quickly as possible, the put and call options process will take at least two months to complete, and following this a potential sale process or other exit process will take additional time.

“The business will continue to trade through this period. Our top priority is to do the right thing by shareholders, staff, suppliers, and customers and we will act quickly and openly to minimise the impact of this decision,” Mr Cairns concluded.

Woolworths will now negotiate with Lowe’s and an independent expert regarding the valuation process.