Woolworths has appointed a new boss to revive the retail giant, hammered by weak earnings, stiff competition and its failed hardware chain Masters.
Woolworths on Friday unveiled a first-half loss of $972.7 million, its first in more than 20 years because of its ill-fated attempt to rival Bunnings whose parent company also owns Coles.
The group's decision to wind-up or sell its home improvement chains Masters and Home Timber and Hardware has weighed down its balance sheet with $1.9 billion in writedowns.
On top of this, the group's supermarkets continue to struggle, falling further behind archrival Coles.
Tasked with the job of reviving the grocery business while ridding the group of Masters, is Brad Banducci.
The group's food and liquor managing director has been elevated into the chief executive role eight months after Grant O'Brien announced he'd step down when a replacement was found.
Mr Banducci will continue to fill his other role until a replacement is found.
Woolworths chairman Gordon Cairns defended the board's choice, saying Mr Banducci was the standout from a short list of three candidates following a six-month international search.
He argued that it was unfair to blame Mr Banducci for the supermarkets' troubles given he had only been heading that division in the past 12 months.
"We didn't judge Brad's performance only on the last 12 months," he said.
"We judged his performance on the last 23 years."
He said Mr Banducci had a track record of turning business around, including several years leading Woolworths liquor business and transforming Dan Murphy's into a market leader.
Mr Banducci was optimistic about the job ahead of him, saying Woolworths' prices were now lower than those of archrival Coles.
"Customers are starting to notice that and we have made a meaningful difference in terms of a price of a basket of groceries," he said.
"There's pleasing growth in customer visitation to our stores but it is still early days."
Woolworths has spent more than $350 million lowering food prices in the past 12 months after admitting it had put profit margins ahead of shoppers.
But in stark contrast to Cole's 4.3 per cent growth in comparable food and liquor sales, Woolworths comparable sales declined 0.6 per cent in the first six months of fiscal 2016.
The group's future of Masters and Home Timber and Hardware is still unclear, with the businesses being put up for sale last month.
Despite initially falling, Woolworths share price has reversed losses to trade higher in the afternoon.
CMC Markets chief market strategist Michael McCarthy said Woolworths weak share price was attracting buyers.
"The hit to profit was bad, the appointment of a CEO was good, albeit not so good that it is an internal appointment," he said.
"The share price has been so weak for so long and that's likely why it is attracting buyers on a result like this."
Shares in Woolworths were up 45 cents, or 2.06 per cent, to $22.34.
WOOLIES SLUMPS INTO THE RED:
* Total net loss of $2.09bn vs $1.28bn profit 1H15
* Net loss of $972.7m attributable to shareholders
* Revenue down 1.4pct to $32.2b
* Interim dividend cut from 67 cents to 44 cents a share, fully franked
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