Woolworths, one of UK’s oldest high street retailers, has collapsed after its attempts to sell its retail outlets failed. It went into administration just hours after another retailer MFI also collapsed.
Shares in Woolworths were suspended yesterday (November 26) and it confirmed that it has been in talks over the sale of its 40% stake in publisher 2 Entertain to BBC Worldwide. Its distribution company EUK, which distributes DVDs and CDs has also gone into administration, despite remaining profitable.
Woolworth, which has 800 stores, has been struggling to reinvent itself over recent years after facing competition from supermarkets, online retailers and specialist shops. It rejected a £50m offer for its stores from Icelandic investment vehicle Baugur and retail entrepreneur Malcolm Walker in September.
Woolworths also posted a £90.8m drop in underlying pre-tax profits for the six months to August 2 the same month. This June, its chief executive Trevor Bish-Jones left the company and was replaced by Steve Johnson, the former chief executive of DIY chain, Focus.
Meanwhile, MFI has also been struggling to survive and it announced a management buyout in September. In May, it appointed McCann Erickson Birmingham to handle its advertising and media after it had problems securing credit insurance on its £26m media account. It is unclear how the agency will be affected by this.