This has been a tough couple of years for Woolworths. The company has changed tack a number of times in search of a winning strategy to pull it back from the brink but to no avail.
Shop closures, refurbishments, single line queuing and even a drive toward e-tailing are just some of the tactics that have been brought into play in what became a desperate attempt to save the failing retailer (see previous stories in Knowledge Base).
Sales have continued to fall reaching a nadir at the end of the first half of 2008 with a loss of £99.7 million.
Woolworth bosses are in discussion with potential buyers. The group plans to sell off its retail chain of some 800 shops but retain other parts of the business including its entertainment and publishing companies.
ECONOMIC PARTNERSHIP COMMENT
Woolworths' fate now seems almost certain to be a lapse into administration or a demoralising sale for a nominal sum (probably £1) to restructuring specialist Hilco. Either outcome will lead to a massive store closure programme and thousands of job losses to add to the UK’s rapidly rising total.
Woolworths has struggled for years but the early recession of 2008 finally finished it off. Extraordinary to think that a little over three years ago a private equity firm was on the point of buying the business for £837m.
After their banking partners pulled the plug on £385m of debt, Woolworth's appointed administrators Deloitte earlier today. The stores will trade until at least January 1st 2009 in an attempt to dispose of existing stock and possibly find a buyer.
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