Former owner looks to save Woolworths

Published on Wednesday 10 December 2008 10:35

A FORMER Woolworths owner has confirmed he is looking at a possible bid to save the stricken retailer.

Sir Geoff Mulcahy bought Woolworths, which has five Edinburgh stores, in 1982 and is now exploring possible options to revive the company and safeguard thousands of at risk jobs.

He is understood to have asked administrators Deloitte if he can take on around 500 of the company's 813 UK stores.

A hand-picked management team would take over the running of the chain and work towards paying off the rest of the 380 million debt owed to Woolworths' bankers.

Sir Geoff, who is now the chairman of the British Retail Consortium, said he was looking at every possible option to save jobs at the company.

"You have 25,000 staff at Woolworths and there must be a way of trying to save this business," he said. "It's late in the day, but there's still a possibility."

Woolworths collapsed into administration last month, after it failed to get sufficient backing from its banks to weather a cash crisis

Talks with restructuring specialist Hilco also collapsed, but despite the problems, Sir Geoff – who originally took over Woolworths when he was part of a consortium which bought the company from its American owners 26 years ago – said he was "extremely positive" about its growth potential.

When he left the company in 2001, its annual profits were close to 130m.

Those close to the administrators have suggested Sir Geoff is likely to be disappointed however, with deals already thought to be in place to sell on as many as 350 stores to a range of supermarkets and discount retailers.

Iceland have already agreed a deal to take over 50 Woolworths stores, and Tesco, which bought up to nine Woolworths stores in October, has said it may bid for individual sites

There is also the situation with Entertainment UK, the wholesale CD and DVD arm of Woolworths, which is expected to be liquidated within days, leaving dozens of companies out of pocket.

Deloitte has already axed 450 jobs, with the head-office now run by a skeleton staff. It has pledged that stores will carry on trading beyond Christmas while a rescue deal is sought.