Source: The Australian

Story By: Blair Speedy

WOOLWORTHS' soon-to-open hardware chain, Masters, is unlikely to have a material impact on market leader Bunnings in the short term, but will drive a tightening of margins from 2014-15, according to analysts at Commonwealth Bank.

Masters, a joint venture with US home improvement giant Lowe's, has at least 14 stores under construction and plans to open its first outlet by October. Woolies has said it aims to have secured 150 sites for development by the end of 2014.

In a briefing to clients, Commonwealth Bank analysts said the effect on Bunnings, owned by Coles' parent company, Wesfarmers, was likely to be minimal. With the Australian home improvement sector estimated at $34.8 billion a year, CommBank said there was "more than enough room for Bunnings and Masters to battle it out for market share without destroying industry profitability".

In addition, the Queensland floods and other natural disasters this year were expected to boost demand for hardware in the medium term.

To read the full story, follow this link: www.theaustralian.com.au/business/news/room-for-masters-alongside-bunnings/story-e6frg906-1226086720976