(Refiles to correct typo on 2nd paragraph)
* Big writedowns on underperforming businesses
* A$1 bln charge against UK hardware business acquired 2 yrs ago
* A$306 mln charge against Australian discount dept. store Target
* Shares fall as much as 5 pct to 3-month low
By Tom Westbrook and Byron Kaye
SYDNEY, Feb 5 (Reuters) - Australian diversified retail giant Wesfarmers Ltd WES.AX wrote off a newly-acquired British hardware chain among A$1.3 billion ($1 billion) of impairment charges on Monday, sending its shares on their biggest one-day fall in a year.
The move is a dramatic reversal for Australia's biggest company by revenue, which entered Britain just two years ago with the purchase of hardware chain Homebase for 340 million pounds ($480 million).
It is also another reminder for Australian business generally that strengths at home will not guarantee a winning strategy in Britain, no matter how similar the two markets may appear on paper.
Wesfarmers joins the ranks of National Australia Bank Ltd NAB.AX , which quit Britain in 2016 after struggling with an acquisition of Clydesdale Bank, and Australian law firm Slater & Gordon Ltd SGH.AX , which made an A$876.5 million writedown on a new British acquisition in 2016, in failing to make good on U.K. expansion plans.
"With hindsight it's easy to say that it was foolish to expect that they get that same confluence of positive factors for operations in other parts of the world," said Michael McCarthy, chief strategist at brokerage CMC Markets.
"Perhaps its a reality check for all of us."
Wesfarmers shares fell 5 percent in early trade to their lowest intraday level since November, as the broader market .AXJO dropped sharply on fears of rising U.S. interest rates.
Wesfarmers' Bunnings hardware business is a market leader in Australia but Homebase failed to match that success in Britain and Wesfarmers said it expected the unit to post a half-year underlying loss of A$165 million for the six months to Dec. 30.
Wesfarmers Chief Executive Officer Rob Scott, who started in the role in November, said in a statement that the Homebase purchase had been "below our expectations".
Bunnings's U.K. managing director Peter J Davis had retired and Damian McGloughlin, a former retail director of British home improvement chain B&Q plc, would replace him while Wesfarmers held a review of the British unit, the company said.
Wesfarmers booked a A$795 million impairment against Homebase's goodwill and brand name, plus another A$228 million in store closure costs, stock write-offs and tax writedowns.
Hugh Dive, chief investment officer at Atlas Funds Management, which owns Wesfarmers shares, said the company had found that the British market was "very different and more fragmented" than what they were used to in Australia.
The A$1.3 billion impairment included a non-cash writedown of A$306 million against struggling Australian discount department store Target.
($1 = 0.7092 pounds) ($1 = 1.2645 Australian dollars)