Woolworth in negotiations over £1 sale

Published on Wednesday 19 November 2008 09:13

HIGH street business Woolworths confirmed today it is in talks over the possible sale of its retail business.

While the company did not identify the suitor, the Times newspaper said Woolies was in discussions with Hilco, the retail turnaround specialist, about the sale of the high street business for 1.

Woolies recently rejected a proposal from Iceland retail founder Malcolm Walker.

The retailer, which has been a presence on UK high streets for nearly 100 years, has more than 800 stores but has been battered by competition from supermarkets and internet retailers.

A retail deal would leave it with EUK, its entertainment wholesale division, and 2Entertain, the music and video publishing venture with the BBC.

Today's newspaper report said the talks were likely to hinge on how much of Woolworths' debt Hilco will be prepared to take on. The company's net debt stood at 295 million at the start of August.

And negotiations over responsibility for an estimated 100 million pension fund deficit will also need to take place.

Hilco is best known in the UK for buying up the debt of Allders before placing the department store chain into administration.

It said its actions, including the provision of 15 million of additional working capital, meant 30 Allders stores could be sold to other retailers, including Debenhams, Bhs and Primark, while retaining 3,500 jobs within the business.