labels: World economy
UK's iconic Woolworth store will shut down in January news
18 December 2008

Ironic that the UK's iconic high street retailer, Woolworth's network of 800 plus stores will shut down on 5 January, 2009, exactly a century from its inception in 1909, when Frank Woolworth started the first store in Liverpool.

The shutdown comes as the administrators of the retailer, Deloitte, failed to find suitable buyers for the firm.

Deloitte has abandoned to sell Woolworth chain of stores and its distribution business, Entertainment UK, which will now be broken up and its 807 stores will sold in lots to rival retailers thereby pushing 27,000 employees of the retailer and swelling the ranks of the 1.8 million unemployed in the UK.

With the retailer initiating a shutdown of 50 per cent discount sale across its 800 plus stores in the UK last week, hungry bargain hunters emptied all the shelves and gave Woolworth a parting gift by recording one of its highest sales with the administrators saying that they were going to refill the shelves with more than 50 million items, which are scheduled to arrive this week.

Its lenders, Bank of Ireland's subsidiary, Burdale Financial, and GMAC Commercial, which had loaned Woolworth 385 million in January against its stock and other assets, had refused to agree to a deal where Hilco, a company that specialises in turning around struggling businesses, to buy Woolworth's 800 plus store retail chain for as little as 1 and take on about 250 million worth of its debt. (See: Woolworths may sell its 800 stores for 1)

As Deloitte, desperately tried to secure a deal to sell Woolworth before Christmas, many suitors expresed interest in buying Woolies retail stores including Primark, Asda and Iceland. Discount chains Aldi and Lidl were also reported to be interested in acquiring some of the well-positioned high street stores. (See: Collapsed retailer Woolies' stores to be sold off by Christmas)

Interest in buying the chain came from as far as Africa, Asia, the Americas and from a few British companies. Some buyers were interested in buying the Woolworth brand name, Worthit! sub-brand, Ladybird chidren's wear and two toy brands.

Although many buyers showed the inclination to buy Woolworth, the problem of securing huge amounts of fund to take on its 250 million debt and restock the 800 plus stores and get it up and running again required huge separate investment, which is hard to come by in the current tight money market.

Woolworth will now be broken up and its chain of 800 plus stores will be sold in lots with the first 200 being sold on Christmas Eve, the second lot of stores will be sold on New Year's Eve and the rest by 5 January 2009.

Shopworkers union, Usdaw said that they were shocked and appalled by the news that the employees would be given only ten days notice of closure and the timing of it will make it more devastating as it is in the period of Christmas and New Year.

Usdaw also said that it was holding talks with the administrators to help employees get the best possible redundancy terms as well as help a few employees to secure jobs within their area and jobs at some of the Woolworth stores which may be bought by other retailers.

 search domain-b
UK's iconic Woolworth store will shut down in January