The Wesfarmers board is visiting Germany. Do we smell an acquisition?

The board of Wesfarmers has been visiting key DIY stores in Germany,  reportedly to observe innovation and trends in the market. Wesfarmers CEO Rob Scott and Bunnings MD Mike Schneider were among the group which visited chains including Bauhaus, Hornbach and Obi, according to the Australian Financial Review.

The group is believed to be looking for ways to grow its market share in Australia, as the country’s housing market slows off the back of a more than ten-year housing boom. On the one hand, Wesfarmers is unlikely to be shopping for a new acquisition in Germany, having pulled out of the UK and Ireland just over a year ago, following after a disastrous attempt at transplanting its Bunnings DIY business into Homebase.  On the other, the group has been considering options to expand into new categories, including smart homes, assisted living, commercial cleaning, petcare, soft furnishings and storage. 

They do tend to be slow on catching up, a case in point being Bunnings. The brand  currently represents almost half of the Wesfarmers’ sales and 59% of group earnings.  Yet despite having one of the most visited shopping websites in Australia, Bunnings only introduced online ordering in June 2018, and even then only on select items in certain geographical areas.