Woolworths is paying up to secure an early exit from its deal to distribute Hills clothesline and garden products.
The maker of the iconic Hills Hoist on Tuesday said the supermarket giant had agreed to pay an undisclosed sum equivalent to three years' worth of licence fee income and cash receipts in order to get out of a seven-year deal it signed less than two years ago.
The agreement represents another step toward Woolworths' exit from the home improvement and hardware business, having already sold its Home Timber and Hardware unit to Metcash and preparing to close down its Masters stores by the end of the year.
The terms of Woolies' settlement with Hills are confidential, but Hills said it would record any additional income in its first-half results, due in February.
"Hills is considering potential permanent replacement brand licensing arrangements for all HHL products, and is commencing discussions with interested third parties," Hills said in a statement.
