Wesfarmers says it will close down catch.com.au, the money-losing e-commerce site it bought for $230 million in 2019.

Catch’s warehouses will be transferred to KMart Group, and some of its digital capabilities will be transferred to Wesfarmers’ retail divisions.

Catch incurred a $96 million loss in 2023/24, an improvement on the $163 million it lost the year before. But its revenue dropped 36 per cent to $227 million.

For the half-year to December 31, it is expected to declare a loss of between $38 million to $40 million, Wesfarmers said on Tuesday.

“The recent increase in competitive intensity in the Australian e-commerce sector has affected Catch’s financial performance and growth prospects,” Wesfarmers managing director Rob Scott said.

The group’s existing retail and health businesses — which include Kmart, Target, Bunnings, Officeworks and Priceline pharmacy — are better positioned to respond to evolving customer expectations, he said.

“These businesses are supported by extensive store networks, leading e-commerce platforms, the Group’s shared data asset and complementary loyalty and membership programs, including OnePass,” he said.

Wesfarmers also said on Tuesday it would develop a retail media network with shared capabilities across those businesses.

It did not provide details, but retail media means point-of-sale advertising, such as the highly successful display screen advertising business in Woolworths stores and the third-party advertisements in e-commerce apps such as Amazon Shopping.

Wesfarmers said Catch would shut down during the fourth quarter of 2024/25.

Its order fulfilment centres in Moorebank, NSW and Truganina, Victoria — which are only operating at about half-capacity — will be transferred to KMart Group, which can use them them to take pressure off its busy stores.

Scott said that while Catch’s financial performance had been challenging, it had taught Wesfarmers’ valuable insights that had accelerated the group’s digital transformation.

Wesfarmers will spend between $50 million and $60 million shutting Catch down.

Where possible, Catch Group employees will be offered opportunities elsewhere at Wesfarmers, the company said.