Woolworths' plan to sell or shelve its home improvement chains is not expected to affect its exclusive deal to distribute Hills branded products.
The embattled retailer secured the rights to sell the famous Hills brand of clotheslines and garden products under a seven-year deal signed in December 2014.
But Woolie's this week decided it would either sell or wind up its Masters and Home Timber & Hardware chains, both of which are major stockists of Hills products.
Hills issued a statement on Thursday saying Woolworths will honour the distribution deal despite its decision to exit the home improvement sector.
"The recent announcement by Woolworths that it will pursue an orderly prospective sale or wind-up of its Masters and Home Timber & Hardware businesses will not impact the obligations of Woolworths under our agreement," Hills said.
Supermarket giant Woolworths, which also owns discount retailer Big W, is yet to comment.
Under the deal with Woolworths, Hills maintains ownership of the Hills brand and receives a guaranteed minimum annual licence fee.
Meanwhile, staff at Woolworths' head office in Sydney are reportedly concerned that a team restructure will result in job losses.
Woolworths has declined to comment.
Shares in Woolworths rose 30 cents to close at $23.88 while Hills added half a cent to 23 cents.
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