By  on November 28, 2008

LONDON — In a further indication of the tough retail climate in Britain, Woolworths, the 819-door, 99-year-old U.K. retail chain that sells everything from children’s clothing to household goods, last week filed for administration, the U.K. equivalent of Chapter 11.

Deloitte said it had been appointed administrator to Woolworths plc, the company’s retail division, and Entertainment U.K. Ltd., the wholesale division of Woolworths Group plc, which distributes entertainment products.

Woolworths split from its original American parent company, F.W. Woolworth and Co. Ltd., in 1982.

“Woolworths has suffered a number of cash flow problems,” said Neville Kahn, reorganization services partner at Deloitte. “Strenuous efforts over recent weeks to keep these companies going have unfortunately failed and the businesses are now looking to be rescued under the administration process.”

Deloitte said the stores will remain open past Christmas, and that the 25,000 staff employed by the companies would all be paid this week. The Icelandic investment company Baugur holds a 12 percent stake in Woolworths through the investment vehicle Unity.

“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 at Deloitte. “We are working hard to ensure that any sale of the business, in whole or part, will preserve jobs.”

Woolworths Group plc’s DVD business, 2 Entertain, has not been placed in administration and BBC Worldwide has made a bid to acquire that arm of the business.

Woolworths was spun off from the fast growing Kingfisher group in 2001 and struggled to carve out a niche in the increasingly competitive U.K. retail scene. The chain was the second to go into administration last Friday; U.K. furniture retailer MFI also did so.

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