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Woolworths administration: What does Deloitte plan?

Published: 4 December 2008
Woolworths the former high street champion and current media punch bag went into administration last week.
Woolworths administration: What does Deloitte plan?
The company, which has had a high profile struggle to establish a retail identity in recent years, was finally brought down by the global financial crisis.

Woolworths PLC and Entertainment UK filed for administration at the High Court in November, but the Woolworths Group was not in administration at the time of going to press.

As talks with BBC Worldwide over the sale of its 40% interest in 2 Entertain drag on the group is going to find itself struggling and suggestions are it could go into administration next week or even earlier.

But, Cameron Gunn, senior partner at corporate debt restructuring and insolvency experts Resolve Partners told DIY Week he believes the firm will trade for the rest of the month.

He said: "They'll trade until Christmas generating cash flow through depleting existing stocks, then try to sell the profitable stores in the 'dead time' of January and close the rest."
High profile administrator Deloitte, who has around 100 staff working on Woolworths and is spending a reported £22,000 an hour, was, as DIY Week went to press, working on a sales package.

As it stands at the moment the fact around 600 of Woolworths' 800+ stores have permission for food sales makes a deal to sell them to supermarkets the most likely option.

Waitrose opened a new store in a former Woolworths in Chiswick, London, today (December 4) after buying a number of stores. Other supermarket rivals, including Sainsbury's, followed suit earlier this year and Woolworth's demise could see the big chains eying even more outlets.

In 2009, should it make it that far, Woolworths will celebrate a century of trading in the UK, but with the stores up for sale at a reported £1 and £385m of debt the future is not looking good for around 30,000 employees and 10,000 pensioners who are relying on the group.

Talks with restructuring specialists Hilco, who had tabled the offer of a £1, broke down as the two parties stumbled over how much of Woolworth's debts would be included.

A number of high profile figures, including Ryman owner Theo Paphitis have also expressed an interest.
Mr Gunn added: "It's a difficult task and while we're aware of several interested parties some are putting their names out there just for publicity."


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