UK: Fears over jobs as Woolworths holds closing down sale

A closing down sale at ailing retailer Woolworths starts today, raising fears for around 25,000 jobs at the business.

Christmas UK shoppers are expected to descend on the chain’s 813 stores nationwide in droves to take advantage of what could be some hefty price cuts for toys, entertainment and other items.

Woolies’ administrator Deloitte announced the sale yesterday after saying it had so far failed to find a buyer for the struggling firm.

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. The group employs 30,000 staff, with around 25,000 working in retail.

Deloitte – which has already launched a massive sale with up to 50% off toys and gifts to generate cash for creditors – had previously pledged that stores would carry on trading beyond Christmas while a rescue deal was sought.

Reorganisation services partner Neville Kahn said he 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 Castleton, 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 former Woolies chief executive Geoff Mulcahy and Dragon’s Den star Theo Paphitis but no deals have been struck.

The complexity of the group’s leases and difficulty in restocking the business after Christmas has reportedly 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.

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