R.I.P Woolworths
 

Trading in Woolworths shares was suspended this morning as talks to rescue the beleaguered retailer continued.

But following the breakdown of the talks the board plans to place the group's retail arm and distribution business into administration. However the holding company and 2entertain - a joint venture with the BBC - will not be placed into administration.

Neville Kahn a partner at Deloitte is expected to lead the administration.

In a brief Stock Exchange statement Woolworths announced this morning that it had asked the exchange to suspend trading "pending the outcome of these discussions".

Talks to save beleaguered retailer Woolworths, which employs almost 30,000 staff, broke up after 3am last night. They resumed this morning but broke down this afternoon.

The board of Woolworths had tried to persuade its lenders to back a restructuring plan that would have seen its loss-making retail chain sold to restructuring specialists Hilco and its stake in DVD publisher 2entertain sold to BBC Worldwide, its partner in the joint venture.

BBC Worldwide is understood to have bid in the region of £110m for 2entertain, which publishes DVDs including Blue Planet.

The deal with Hilco would have seen the restructuring specialist buy Woolworths retail chain for a nominal £1 but take on around £260m worth of Woolworths' debt alongside the stores.

EUK, Woolworths distribution business, would have remained in the ongoing Woolworths group along with around £120m of debt. Although best known for its retail business, EUK – alongside 2entertain – generates the majority of Woolworths' profits.

The collapse was sparked after a syndicate of the retailer's lenders - led by Bank of Ireland subsidiary Burdale Financial and GMAC Commercial – refused to sign up to the deal.

The syndicate - which also includes Barclays – lent Woolworths £385m in January secured against stock and other assets.

The collapse of Woolworths could spark further discounting as administrators try to clear stock in the run up to Christmas - hitting the profitability of other retailers.

Source

Yup! 5 closed down near me recently. They gave away free sweets and drinks :tongue:

D: D: D: D: D:


From the BBC:

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 - will meet at 1800 GMT 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 the BBC, 2 Entertain, will not go into administration. It is owned by Woolworths' parent company, which will not go into administration.

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


WOOLWORTHS FACTS
Unknown Woolworths store, 1955
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?
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 the closure of hundreds of stores across the UK, and many thousands of redundancies.

The store chain employs 25,000 and Entertainment UK employs 5,000.

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.

The company had tried all day to find buyers for its business.

ooo!

The one by me closed down about 2 months ago xD

We only have one now.. and that's in town xD

I've only been to woolworths once..there's none near me

its rubbish so close to christmas always thought woolies were busy (well they are near me) but if they having to clear out stock i'm gonna be there for some bargins

It used to be the best place to go when you were a kid like!

I only really used to like wollies when I was younger, never go in there now.

The pick and mix :sad:

Im goin shoppin in woolies

Both woolies and MFI have both gone bankrupt !

I know, imagine what the employees Christmas will be like :sad:

i never use that shop.. i went through the other day and they were like sorry out of stock to every dvd people were trying to buy

No wonder they where out of stock

Woolies is amazinng!

http://www.visit4info.com/siteconten...2111928PIC.jpg


R.I.P Woolie and Worth :sad:

Zomg where the hell am I gonna get [reasonably] cheap pic'n'mixes now!?!?! GUTTED!

Doesnt BigSister work for Woolies?

Somewhere like that. She works really hard and does her course at University.

Yep :sad:

last time i heard she did yeah,i loved wollies as a kid,never go in now however only with younger sis occasionally

I hope she manages to get another job before the chain closes

i love the woolie worthless :angel::angel:

I was in Woolies on Monday. I had a 20% discount voucher and the prices were already slashed even before I used the voucher. I spent about £50 and came home with double that value of goods.

I must admit it was bitter-sweet. Although I was happy to be getting the discount obviously, I did say to my friend that it felt wrong to be enjoying my bargains while the people working there feared for their jobs.

That store hasn't closed yet, but I'm sure it'll be on the cards judging by the business news. What a hellish time to find yourself unemployed. :(

Cant believe woollies is shuttin downn the one near me is still open. but everythins dead cheap , today we bought a computer table and chair for a fiver! it was reduced from £30 or summit like thatt!