Woolies begins closing down sale after failing to find buyer
LONDON - Woolworths will launch a closing down sale today, clearing stock at large discounts, after administrator Deloitte admitted it had failed to find a buyer for the 99-year-old chain despite serious interest from several buyers.
The disappearance of Woolworths' 813 stores from the high street will potentially leave 30,000 staff facing redundancy.
Woolworths' managers received an email from head office yesterday telling them that a buyer had not been found for the chain, which went into administration on November 26 with £385m of debt.
Sir Geoff Mulcahy, who ran Woolworths' parent company for almost 20 years, put forward a plan to take over around 500 stores and keep them as a chain, but talks with the administrators broke down.
'Dragon's Den' star and entrepreneur Theo Paphitis was also a potential bidder at one stage but no deal was struck. He wanted to transform Woolworths into a discount store.
Rescue deals were all hampered by the fact that Woolworths does not own any of its stores and leases them all.
The complexity of the group's leases, held by hundreds of different landlords, and the difficulty of restocking after Christmas, are reported to have killed attempts to sell the chain.
Retail analysts have blamed Woolworths' failure on a lack of focus, selling bits and pieces including DVDs, stationery, toys, bathroom fittings, glasses, children's clothes and electrical goods.
The group is expected to be broken up and sold to rival retailers including Iceland, Tesco, Waitrose and Poundland.
Nebille Kahn, a partner at Deloitte, said: "While we are still seeking bids from interested parties, Christmas is clearly the busiest time of the year for retailers and it is prudent we do all we can to sell existing stock before Christmas."
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