Woolies on defensive

WOOLWORTHS moved rapidly into damage limitation mode yesterday following criticism of the company by its own boss, former Railtrack chief Gerald Corbett, that suggested the group was struggling.

The retailer, demerged from the Kingfisher retailing group last August, said the remarks at a conference hosted by Retail Week magazine had been taken out of context.

Corbett, no stranger to controversy at Railtrack, told the conference that he remembered comments made by Dixons chief executive Stanley Kalms at the time of his hostile bid for Woolworths in the 1980s that its "city centre stores are vast open deserts with nobody there".

But a spokeswoman for Woolworths said yesterday: "This has been taken out of context and blown out of proportion. Gerald said this [deserted stores] was still the case in some stores, but that is being addressed."

Corbett also said Woolies’ stock situation was unacceptable, with availability of stock [in stock rooms] just 91 per cent, with stock on the shelves up to 8 per cent below that. It is believed he also confirmed to the conference that 540 of the group’s 30,000 staff were also sacked last year for pilfering.

The spokeswoman said the stock situation was "unacceptable" but that action was being taken to put it right. On the issue of shoplifting by staff, she said: "Since Gerald arrived we have tightened up the whole issue of shrinkage. Not just customers, but staff as well."

The spokeswoman said it was unclear how Woolies compared with other leading high street retailers on the shoplifting issue "because others do not put the figures in the public domain".

Corbett’s remarks were portrayed at the weekend as a stunning own goal, reminiscent of Gerald Ratner’s notorious remarks about the "total crap" products sold in his former jewellery chain that subsequently slid from his control.

The Woolworths spokeswoman said it was "incongruous" to compare the two. She pointed out that Ratners’ share values had plummeted virtually overnight following the speech by Ratner .

By contrast, she said, although many City retailing analysts were at the conference where Corbett spoke last Tuesday, the company’s shares closed on Friday night at 43.5p, virtually unchanged on the week.

The spokeswoman said there were plenty of positive aspects about Woolworths, "including the fact that we have paid off 200 million debt we were left with [at demerger], have six million customers and have leading market conditions".

The company said it hoped to update the City on progress at its next trading results announcement on 27 March.