Bunnings Warehouse in Maitland was closed on Thursday after holes appeared under the kitchen section and near a stormwater drain.
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Bunnings Group CEO John Gillam said the damage was caused by the failure of the stormwater pipes but denied the holes were sinkholes.
Engineers were assessing the site on Thursday.
“It is yet too early to comment on the extent of the damage,” Mr Gillam said.
“There was some damage to the kitchen area and to a section outside the store.
“About 10 per cent of the entire pad has been eroded and we will have to decide whether to rebuild from the foundations up, which would take some months,” he said.
“The simple fact is that sand has been washed away by storm-water.
“[The store] was built on landfill and we bought it in 2004.
“But there has been a failure in the stormwater which we can’t explain and which our engineers are examining.”
Plans to send the all 150 Maitland staff to work at Bunnings in Wallsend, Cessnock and Singleton were being prepared, Bunnings Group CEO John Gillam said.
All employees at Bunnings Maitland will retain their jobs.
