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News - 31 March 2006
|Feeling the strain|
With a 15% fall in full year profits Woolworths is feeling the effect of the consumer downturn more than most retailers and the only thing that is propping up its share price is the distinct possibility of a takeover bid.
A collapse in earnings from the core chain of over 800 High Street shops was the cause of the fall together with the loss of a £10m deal with Tesco to supply CDs and DVDs.
Profits from the shops have slumped by over 50% and the group is now relying heavily on the entertainment and wholesale division to make up the numbers. To make matters worse the CEO – Trevor Bish-Jones – has made it clear that they expect no significant improvement for two years.
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