Closing-down sale begins as buyers snub Woolworths

Published on Wednesday 10 December 2008 21:05

WOOLWORTHS will launch a closing-down sale today after administrators said they had so far failed to find a buyer for the ailing retailer.

Up to 25,000 jobs at the firm's 813-strong retail chain are under threat as the hunt for a rescue continues.

Deloitte warned that some stores could close before the end of December if no offers for the business emerged.

Woolworths has been in business for almost a century but was forced to call in administrators two weeks ago as debts and losses mounted in a worsening high street climate.

Deloitte had previously pledged that stores would carry on trading beyond Christmas while a rescue deal was sought.

The reorganisation services partner Neville Kahn said Deloitte was making "every effort" to convert interest in Woolworths into firm offers.

"While we are still seeking bids from interested parties, Christmas is clearly the busiest time of the year for retailers and it is prudent to do all we can to sell existing stock.

"By moving to a store closing sale and further discounting the stock, we are maximising the sales potential that this period offers."

Deloitte has already cut 450 jobs at Woolies' head office and support operations in London and Rochdale. If stores close before the end of December, the administrator said it would consult employees to discuss the support available in the event of redundancies.

Deloitte has held talks with the likes of the former Woolies chief executive Sir Geoff Mulcahy and the Dragon's Den star Theo Paphitis, but no deals have been struck.

According to reports, the complexity of the group's leases and difficulty in restocking the business after Christmas has put off interested parties.

But rival retailers are understood to have agreed to buy hundreds of store leases – including Tesco, Sainsbury's, Asda and Iceland – as many of the group's outlets have planning permission to sell food. Some employees could subsequently find jobs with the new owners.

Entertainment UK, Woolworths' wholesale music, DVD and books distribution business, is also in administration, but 2Entertain, its media publishing joint venture with BBC Worldwide – 40 per cent owned by Woolworths – is still trading.