Woolworths Set For Administration

[natweststaffmember]

Woolworths set for administration


Woolworths has had a presence on the UK High Street for almost a century

High Street legend Woolworths has buckled under its debt and is set to go into administration, BBC business editor Robert Peston has learned.
The move will put tens of thousands of jobs at its 815 stores under threat.
The board of Woolies - one of the UK's oldest store groups - is meeting to take the formal decision.
Deloitte will be appointed as administrators to the store chain and also to Entertainment UK, which supplies DVDs to supermarket groups.
However, Woolworths joint venture with BBC Worldwide, publisher 2 Entertain, will not go into administration as it is owned by Woolworths' parent company. And all stores will remain open and keep trading, at least for now. Money has been ring-fenced so that salaries will be paid to staff as normal on Friday, a spokeswoman added.


WOOLWORTHS FACTS



First UK store opened in Liverpool in 1909



Has 815 stores across the UK
Owns 40% share of publisher 2 Entertain
Owns distribution business Entertainment UK



What is the point of Woolworths?
Robert Peston's analysis


Our business editor says that Woolworths has been something of a lame duck retailer for years, losing market share against intense competition.
The company's weak position was also the reason why the government did not intervene to rescue it.
"Government policy is not to prop up lame ducks," our business editor said.
Peter Mandelson, the business secretary, had been in contact with the company on Wednesday, to ensure that if it went into administration, it would minimise the anxiety to its employees.
The company has been asked to do what it can to protect its pension fund, and keep its stores open if possible during the vital Christmas period.
The UK's Woolworths has no connection with several retail chains around the world that carry the same name.

See how Woolworths' shares plunged during the past year
High Street trouble
The news of Woolworths' demise comes on the same day that furniture chain MFI announced that it was to go into administration.
The company had asked its landlords for a rent-free period to help sort out its financial problems.
However, the troubled company with its more than 1,000 staff, failed to reach an agreement.
MFI had suffered several years of financial trouble. Only last September, as part of a management buyout led by chief executive Gary Favell, 81 loss-making outlets were placed into administration.
Now the remaining 110 stores could face closure.
Woolworths' £385m debt
The collapse of Woolworths is also likely to lead to thousands of redundancies with the store chain employing 25,000 people and Entertainment UK employing 5,000.
The shopworkers' union Usdaw said the news was "devastating" for staff.
"We were hopeful that a last minute deal would be done and will want to meet with the administrators as soon as possible," the union's national officer John Gorle said.


BBC business editor Robert Peston: "Woolworths was weak for years"

The company has struggled under the weight of £385m of debt. Its problems were compounded over the past couple of months when it was forced to pay cash when buying goods from suppliers, because trade credit insurers were no longer prepared to insure suppliers to Woolworths.
During the past few days the company had tried to sell itself for a nominal price of £1, where the new owner would have to take on the firm's debt.
US restructuring firm Hilco was rumoured to be a potential buyer, with the BBC's commercial arm set to take over Woolworths' share in music and film publisher 2 Entertain.
Earlier this week, Woolworths' largest shareholder - property tycoon Ardeshir Naghshineh - had called on Woolworths to delay plans to sell parts of the business.
Mr Naghshineh said the firm should instead look at making money by selling of some of its outlets.
In the end Woolworths' board ran out of time.





source:BBC NEWS | Business | Woolworths set for administration

[Amy]

Re: Woolworths Set For Administration

I read this today and before Nattie comments on the fact that this article is taken from The Sun, I would like to point out that I do not buy The Sun. I read Jane Moore because I like her writing style and her take on life is much like my own.

The demise of this once-great High Street institution is being described as a sign of recessive times, a casualty of its abandonment by British consumers wary of spending money. Similarly, many other High Street stores are holding drastic sales already in a bid to kick-start consumer spending and the Government’s VAT reduction has the same aim in mind.

But as I see it, the “bust” of Woolworths and other struggling companies has more to do with the arrogantly sloppy management so prevalent in the “boom” years.

Woolies used to be a Godsend for busy mums. Then the scourge of “revamping” forced us to queue at one bank of tills often manned by a solitary member of staff who appeared to be moving in slow motion. Suddenly, decomposing while waiting . . . and waiting . . . to pay for an impulse purchase didn’t seem like such a good idea after all.

Meanwhile, there would be a seemingly endless array of: “assistant managers” floating around with clipboards and a don’t-bother-me-I’m-busy expression.

Busy doing nothing it seemed, just like the needlessly top-heavy management in our public services that the Government is failing to address.
The public didn’t fall out of love with Woolies. Its management fell out of love with the customer and started taking us for granted.

Now, when they need us, our loyalties lie elsewhere.

Similarly, clothes shops where staff continue their conversation without exchanging a word with the customer will become increasingly empty. And the ubiquitous restaurant chains that are big on style but low on quality and service will struggle too.

Three have closed down in my area of South London in the past month, abandoned by customers sick of a never-ending stream of gum-chewing, monosyllabic staff who liked the pay packet but clearly resented interrupting their modelling career to serve us.

Yet my local Italian restaurant, Numero Uno, is still thriving after 20 years. Why? Because the food is reasonably priced and excellent, the long-serving manager, Franco, is very hands-on and the staff turnover is minimal.
Head waiter Mario has been there for as long as I can remember and greets every customer like a long-lost relative.

When money is tight, that’s what we want — the personal touch and a bit of appreciation for our custom. It’s not rocket science.

The customer is king and the greedy companies who forgot that and treated us as a virtual irrelevance in the boom years are paying for it now.

We haven’t stopped spending, we’re just doing it more wisely.

[bloomingflower]

Re: Woolworths Set For Administration

Hi


After reading the article above, I am really sad to hear about Woolies going bust.

It will be an end to many decades of a tradition in which some of us will be used to. For many years I have been going into Woolies for most of my bits and pieces, even more so at Christmas time. This will be the last Christmas.

It's scary to know that some major companies are now buckling under the recession and credit crunch.

First MFI, now Woolworths,whos next??

I think Jane Moore is spot on with her account and where she says that Woolies was "once a great High Street institution". Now no more. Very sad.





bfxx

[littlesally]

Re: Woolworths Set For Administration

Hi

First MFI, now Woolworths,whos next??

bfxx

I would say that it would very probably be WH Smith.
Their prices are hideously high. Even when they have reduced prices they are more than anywhere else. It is a shop I now walk straight past.

It is sad about Woolworths, but it has been coming for years.
They used to be the cheap shop, but the products were ok, then it became the cheap looking shop, but the prices had crept up.
At times their prices are higher than Smiths!

The outside looks dull, and only child hood memories kept me going back.

I remember my dad saying many years ago, that places like Woolworths would cause better shops to close. He never bought any albums from there, even though they were cheaper. He went to the smaller record shops as when he wanted a specialised record, no-way would Woolworths have it.

Well, they became complacent. They believed we would still go there.
I love the bit about managers walking around with a 'don't bother me' attitude. So many managers in so many stores are like that
My lack of custom has nothing to do with the recession, but everything to do with them.

Only sorry for the tradition of Woolworths going. Hadn't shopped there for a while, except to buy lottery tickets,

Sally xx

[bloomingflower]

Re: Woolworths Set For Administration

Hi all

Here is a BBC news article about Woolies,this is dated 27th Nov. The good news is the Government is trying to keep it open over the Christmas period.

BBC NEWS | Northern Ireland | Work begins to rescue Woolworths

Brown pledges Woolworths support


Gordon Brown: "We will help people get new jobs"

The government is working to ensure that Woolworths stores remain open over the Christmas period, Prime Minister Gordon Brown has said.
He said arrangements had been discussed to ensure staff would still be paid and employees threatened with redundancy would be helped to find work.
Administrators were appointed to the struggling chain on Wednesday.
Woolworths was dealt a further blow when lottery operator Camelot stopped selling tickets through its shops.
Camelot said it had suspended trading with Woolworths with immediate effect, "pending the company finding a satisfactory resolution to its current trading difficulties" .
The decision means that Woolworths will no longer be able to sell National Lottery tickets and scratchcards, or process prize claims.
Although the stores will stay open until after Christmas there is still concern over the future of Woolworths' 30,000-strong workforce.
The prime minister said: "The important thing is in the long-run that employees in this company - where the businesses and the shops are not going to stay open in the longer term - can get other jobs quickly.
"That's why we're going to move in immediately to give advice to employees in the company."
'Interest'
Accountancy firm Deloitte, who have been appointed as administrator, said the search was on for a suitable buyer for Woolworths' stores and the Entertainment UK business, which supplies DVDs to supermarket groups.




"In the last 24 hours, we have received expressions of interest from a number of parties for both the retail and wholesale businesses," said Dan Butters, who works for the administrator.
The company had tried to sell itself for a nominal price of £1 to Hilco, a restructuring firm, which would have taken on the firm's debt, but this deal fell through.
Deloitte said Woolworths' employees in stores would be paid.
Woolworths' 815 stores and four distribution centres employ 25,000 staff, while Entertainment UK employs about 5,000 people.
Woolworths' publishing joint venture with BBC Worldwide, 2 Entertain, and its book wholesale arm Bertram have not been put into administration.
The firm said it remained in talks to sell its 40% stake in 2 Entertain to BBC Worldwide, the BBC's commercial arm.



'Eye of storm'
Woolworths is not the only retailer suffering in the current climate. Analysts think more companies could face collapse.

Shoppers: 'To see it go would be very sad'

"The eye of the storm has moved on from the banks to the retailers," said Keith Bowman, an analyst at Hargreaves Lansdown Stockbrokers.

• Furniture chain MFI has also gone into administration. It blamed falling demand for big ticket items, cash-flow problems and the withdrawal of credit
• The owner of Currys and PC World, DSG International, has reported a half-year loss of £29.8m, blaming a "tough and volatile" trading environment
• Retail group Kingfisher said sales at its B&Q home improvement chain were down nearly 9% amid the slump in consumer spending and the housing market

There are also fears that Woolworths' demise could spark a price war if the administrators slash prices to shift the company's stock.
BBC business editor Robert Peston said this would be good news for shoppers but could be devastating for weak competitors.
Struggle
Woolworths had cash flow problems and struggled under the weight of its £385m of debt.


Its problems were compounded in the past couple of months when it was forced to pay cash when buying goods from suppliers, because trade credit insurers were no longer prepared to insure suppliers to Woolworths.
Robert Peston said that Woolworths had been one of the UK's weakest retailers for years.
But the sudden deterioration in the real economy and financial markets had triggered its demise.
"It's the suddenness of how everything turned bad that shocks and this means Woolies will not be the last casualty," he said.



Source : BBC

bfxx

[Amethyst]

Re: Woolworths Set For Administration

Awwww Woolies, shop of our childhoods I guess. It will be sad for it to disappear on the high street. They used to be the shop you could get everything and anything in. Not particularly well laid out and always a bit dark, but they had anything you wanted.

Now they are still dark and poorly laid out and don;t seem to have anything you want. As Jane Moore in Amys article said - the queues are ridiculous, staffed by 16 year olds who don't give a toss, and the prices are too high compared to other places. The don't really have an identity, the music sections are rubbish, they were very easy to shoplift from (so I am told) and they have become a last resort if you can't find what you want somewhere else. I don;t think anyone travels specifically to go to a woolies. Some have revamped and put cafe's in, but the cafe's at the back of the shop, surrounded by stuff and not very pleasant (in my experience). The Ladybird clothes range for kids is expensive compared to primark, H&M and co. and Superstore supermarkets and even M&S do way better than them on school uniforms.

SO yes its sad as they were a big part of high street shopping for many years, but the feeling is they have clinging on and keeping their place more on their history than thinking about how to change to give customers what they want. If they are rescued at all, they need to change and work out who they are aiming at.

I agree with Sally about WHSmith. Again over priced and long queues.

John Lewis is my favourite shop (but expensive) and I would always buy electrical goods there, and love a christmas splurge cause they have great products. The staff are brilliant, actually trained to give a toss, and they have plenty of checkouts. Customer service and trust. I feel 'special' lol buying something in there.

[littlesally]

Re: Woolworths Set For Administration

Woolworths was always great to shoplift from, the staff really didn't care - too busy standing around talking.
The one time I did almost get caught was when I was so blatant they had to stop me - but by then I had dumped the stuff as I knew I had been a bit stupid!
Still, I did all my shoplifting training there lol
Sally xx