Woolworth into administration
I have learned that Woolworth, one of the UK's best known and oldest store groups, will tonight file to go into administration under UK insolvency procedures.
The board will meet at 6pm to take the formal decision.
Deloitte will be appointed as administrators to the store chain and also to Entertainment UK, which supplies books and DVDs to supermarket groups.
However Woolworth's joint venture with the BBC will not go into administration. It is owned by Woolworth's top company, which will not go into administration.
The collapse of Woolworth is likely to lead to the closure of hundreds of stores across the UK.
And it is also likely to lead to many thousands of redundancies.
Woolworth has 815 stores. The store chain employs 25,000 and Entertainment UK employs 5,000.
The company has struggled under the weight of £385m of debt. Its problems were compounded over the past couple of months when it was forced to pay cash when buying goods from suppliers, because trade credit insurers were no longer prepared to insure supplies to Woolworths.
UPDATE, 05:29 PM: For the millions of us who have grown up on Woolworth pic'n'mix and bought Power Ranger toys from them for our kids, the collapse of the store chain will bring great sadness.
And of course the pain and anxiety is much greater for the 25,000 employed in its stores.
So since the government has recently made such a great fuss about keeping small businesses alive, why didn't ministers try to keep such a substantial retailer afloat?
As it happens I understand that Peter Mandelson, the business secretary, had contact with the company today - to ensure that if it went into administration, it would minimise the anxiety to its employees, it would do what it could to protect its pension fund and it would keep its stores open if possible during the vital Christmas period.
But Woolies has been something of a lame duck retailer for years. It has been losing market share against intense competition.
And government policy is not to prop up lame ducks.
Which is why the board of Woolies, in the end, had no choice but to call in the administrator.
I'm 
© MMIX~RS~q~RS~~RS~z~RS~46~RS~)
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Its a sad day for the nation seeing woolworths going to the wall.So the end of the british empire will be sooner than we think robert, with the QE2 pulling up in Dubai aswell.
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It's when, out of all the many businesses that are tipping over the edge at the moment, there are one or two household names like Woolworth and MFI, that you realise that this is going to be a bad one.
I don't believe we're as 'well-placed' to cope with this as some would like us to believe - i.e. those who believe in the power of positive thinking over fact.
The fact being that this is a hangover we've been due a long time, and anyone who couldn't see it coming has shown they should be kept a long, long way from the reins.
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Sad, but bound to happen sooner or later. They were being squeezed by everyone including the pound shops, online shopping, WH Smiths and the rise of the MP3 player. I am surprised they lasted so long as they lost their core compentence ages ago.
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It is a sad day to see such a icon of the high street in dire straits.
I can remember being a regular in my teens for the cheap paperbacks, and of course the pick n mix sweets.
Lets hope something can be salvaged, not only for those who remember the brand fondly, but more importantly, for the many, many staff who will loose their employment if it is allowed to close.
It just shows that all businesses, just like personal and even Govt. finance, has been run on nothing but mountains of debt. In 12 months time, we might perhaps see a high street missing some very old and well known names.
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I think this is the bit where our current situation starts to bite hard on the high street. Anyone who is, or was still wondering what all the hullabaloo about our economy is, should now start to feel fully appraised from now on.
Woolies, sorry to see you go. MFI the same. Who's next?
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Woolies and MFI have been struggling for ages. They're in competitive sectors, and simply didn't compete very well. The consumer downturn and credit squeeze has finished them off. I wouldn't put either down as being a "shock" though. They'd have collapsed pretty soon in a boom, never mind current conditions.
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Very sad news for all of Woolies' staff especially at this time of year. The sad fact though is that Woolies and MFI were in terminal decline even before the credit crunch hit. Their business models are uncompetitive and they lost out. Eventually someone else will fill the gaps in the market that they leave but especially as far as Wollies is concerned, a part of high street history is gone.
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It is sad news this, I have spent quite a bit of money lately on Xmas pressies there -obviously not enough of us have. However it has been on the cards a longtime.
Alan Sugar will be smarting a bit now, I wonder which apprentice advised this investment?
Also, what is to stop Hilco buying the stores out of administraion without the debt burden. Like barclay's did with lehman's after all?
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Any chance that the cost of reprogramming all their tills and warehouse management to the new VAT rate tipped them over the edge?
Timing is incanny
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#1 er.... can I point out that Woolworths is American, so I'm not sure why the comment about the British Empire etc
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Sad news. A little bit of Britain died today.
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Robert
I'm confused by "Peter Mandelson, the business secretary, had contact with the company today - to ensure ........ it would keep its stores open if possible during the vital Christmas period."
I can understand that this would be positive for its workforce, but would the economy not be better if consumer spending took place in stores which are NOT certain to close, and aid their survival.
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I think Woolworth was always going to be vulnerable as it does not offer a reason for a customer to go there especially (USP). Everything it sells can be bought cheaper elsewhere.
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It probably shouldnt be, but this is a big shock.
Maybe thats the cost of change in a turbulent time.
However, a much loved british icon and name on the high street is all but dead.
I feel for the employees
And also for the UK, we have lost something today that we probably wont see again
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This is a shame, firstly for the thousands who will loose their jobs just before the festive season, and secondly, I ve always remembered Woolworths on the high street, my aunty used to work in the fish counter at our local store years ago.
A sad day
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By the time the admin censors get a post up who knows what else will have collapsed...
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Would be interested to know how many of those posting here about fond memories of Woollies have actually shopped there in the last 5 years? Anyone? No, thought not. That's why it's failed. As RP's update suggests, it's been losing market share for years. It isn't a recent failure. Bit like GM etc in the US. Not providing what people want. The credit crunch has simply brought about something inevitable.
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I remember eating a pick a mix sweet when I was about nine years old. It was the purple wraped hazelnut in caramel, like in Quality Street. As I was sampling it a store detective grabbed me by the arm and took me to an office and locked me in there. After awhile he came back with another man and both called me a thief and said if I were older I would have to go to court for shoplifting. I cried. And the episode still haunts me to this day! But hey, who's laughing now! :)
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Wow, always bail out the banks eh. Its a bit like when Rover went under, they could have used the opportunity to employ all those workers to design and build a cheap, state sponsored environmentally friendly vehicle. Now I expect we will see all these Woolies stores changed into Tesco Expresses, I'm sure some of our High Streets could take two Tesco Expresses. There are going to be a lot of glum people at Xmas this year.
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This is all part of the domino effect - since many of their the suppliers will face bankruptcy, which will lead to the further loss of jobs, house repossessions etc.
So I'm sure that what with the VAT reduction everyone now feels minded to go out and spend a fortune on a new plasma set to cheer themselves up - yeah right!
What will it take for the masses to wake up and realise that we are on the verge of a total collapse of our economic system?
It just seems that everyone has been sanitised into believing as if everything will just tick along and recover before long - perhaps they have put something into the water supply?
A recovery by July next year? What planet is Gordon Brown and his puppet Alistair Darling living on?
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A very sad day - and even more so given that it is my five-year-old daughter's favourite shop.
That probably sounds shallow given the thousands of workers who will lose their jobs - but the retail chain is a national institution (albeit via the States) that she will probably not have the pleasure of growing up with.
On the other hand my local branch in East London is always busy with customers. I wonder if there is a chance that this and other profitable stores can be saved?
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I am very sad about Woolies going under. However, if people wanted to keep it maybe they should have bought more stuff there.
Their market got undercut by the tatty pound shops, and nobody with any real money shopped there. The growth of internet downlads probably didn't help either. I remember buying those Top Of The Pops records there in the early 70's - they could not afford to have the original artists so the hits were played by a covers band.
I am also very sorry for the employees, who will have a miserable Xmas as a result. I am also wondering how long before WH Smiths and Boots go the same way. We will end up with high streets full of charity shops, pawn shops and bookies at this rate.
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This is the recession the Gov't and media have wanted, and I am sure it will get far worse before it gets better.
Holding back pay rises to below Inflation has helped bring about this recession.
And rather than create jobs, low pay will lead to high unemployment and greater poverty for all.
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> And government policy is not to prop up lame ducks.
Oh, please Robert, you're teasing us. What about the banks?
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Woolworths MFI two rubbish shops bound to go under when pressure was applied.
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The death of a business is always a sad event.
However, Woolworths nearly went before in the early Eighties and the standards of those who rescued the business then have long gone.
The behaviour of the business in recent years has been a sign of a company which has seriously lost its way.
My question is how on earth are they going to sell all that rubbish in their distribution centres and third party warehouses?
Will they charge those who buy the stuff for their carrier bags?
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However Woolworth's joint venture with the BBC will not go into administration. It is owned by Woolworth's top company, which will not go into administration.
Woolworths PLC which owns both the Stores and share in the joint venture has been suspended.
What is this Top company ?
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"And government policy is not to prop up lame ducks."
Northern Rock, anyone?
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The Housebuilders will be next to go bust.
Nationalization of Housebuilders ?
Is that part of Gordons plan........
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"And government policy is not to prop up lame ducks."
Unless they're a bank.
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Hurrah, Woollies has been a waste of space on the high street for so long...it's tough on the employees, but any right minded consumer could see that it was one (over priced) step from pound land...it's electronic offerings were the worst kind of tat made in the factories of Shen Zen.
Yes, it is going to be a very different high street.
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It is sad that Woolworths is going under. I remember them fondly. I have enormous sympathy for the staff, especially any who struggle to get a job quickly in the current climate.
That said the growth of companies like Tescos came by outcompeting Woolies. Shoppers voted with their feet/ wallets.
The Austrian school of economists argue that in a recession it is a positive to the overall economy for inefficient companies/ lame ducks like Woolies to close and create space for more efficient companies to expand.
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No mortgages means that when people apply for one, they also allow for a new kitchen, new bathroom, new carpets, new furniture, maybe a holiday and maybe a new car. MFI is a symptom of this. So look out for stores which supply the above items to become sick and fall in the new year. Also, entertainment type sales will also fall big time.
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"government policy is not to prop up lame ducks."
Unless they are too big to quack.
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This is so sad. I'm kind of getting fed up of letting all great things British go - QE2, Concorde, now Woolworths!! Why can't we hold onto our assets anymore?
I am 20 and always went into Woolworths every Saturday as a kid. I enjoyed shopping there with my parents. It was also nice to go there during special times of the year - seeing the xmas selection boxes and easter eggs piled high. It got you in the mood.
But I agree with comments here, that it has been a lame duck for a very long time and that it has been unable to adapt itself. This was long overdue. This should have happened a while ago. (As with MFI). I remember hearing when WH Smiths was in trouble. But a smart move was that by having Post Offices in their shops, this then drew customers into their stores. Why couldn't Woolworths have struck a similar deal and revived itself?
Recently I have been going to Woolworths regularly again with my father to check out their dvds, but you can get them cheaper at major supermarkets now. They don't sell anything special or specific. It's rather like a big jumble sale. Maybe thats why so many people loved it? But now, more and more people turn to Tesco, pound shops or the internet to get their goods.
The most recent things I bought from Woolworths were a pad of A4 paper and some chocolate for University. That's it. And the store was rather depressingly empty. Why? Well there's nothing really unique to buy from Woolworths anymore. It doesn't know what it wants to be. And the goods are not exactly pricey. How can you make profits from Pic n' mix and expect to survive?
Although many British people, including myself will be reluctant to let go of it - let's move on and support our other institutions - or even devise our own 'Woolworths' for the 21st Century. However I feel sorry for the staff that may lose their jobs before Christmas. Where's the empire spirit? Surely they could reinvent themselves and recover over Christmas?
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Dear Robert:
Your BBC journalism is always a delight - so congratulations. However, despite your pedigree, you don't seem to have grasped how banking works in the western world. You repeatedly tell viewers and listeners that banks only lend out money they either already have or can borrow from elsewhere. Please bone up on Fractional Reserve Banking - which is what we have in the West - and then you will see that what currently discourages the banks from lending is not lack of funds but a) their lack of faith in the value of real estate assets and in the financial viability of SMEs; b) the dubious quality of some of their existing balance sheet assets; and c) liquidity problems brought about by the fact that nobody trusts anyone else, which means that short-term inter-bank lending has dried up. The collapse of City Bank exemplifies the problem and justifies the banks' caution. To whom can you lend with confidence if even organizations like City Bank and HBOS are in danger of going under?
For banks to trust each other, they will have to clean up their balance sheets. That's an essential first step towards replenishing the supply of credit. But poorly-regulated Fractional Reserve Banking bears a heavy responsibility for the mess in the first place because it allows banks and credit agencies to create money. How about some thoughts from you on this issue?
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The demise is a sad indictment of poor management nothing less nothing more.
You can't expect to survive living off past glories alone.
Business is a bit like Madonna, although maybe less complex, in that you need to constantly re-invvent yourself to get things right!
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Won't be the last 'name' to go!
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Very sad and a very real example to many why the credit crunch was always going to impact us all.
I remember seeing on the news not so long ago various quotes from "the man on the street" saying that the credit crunch was all about Fat Cats and Bankers and had no impact on them. Guess they were wrong.
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"However Woolworth's joint venture with the BBC will not go into administration. It is owned by Woolworth's top company, which will not go into administration."
What !? Why on earth is the BBC in a 'joint venture' with a retailer anyway ? Ridiculous !
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10. At 5:44pm on 26 Nov 2008, ghanimah wrote:
#1 er.... can I point out that Woolworths is American, so I'm not sure why the comment about the British Empire etc
= = = = = = = = =
Woolworths Group PLC has been a wholly BRITISH company since 1982.
EDUCATION!! Education!! edukayshun!!
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Very sorry to see this great institution close.
There are those I would gladly see disappear eg Alliance & Leicester who seem to have made the old fashioned word usury fashionable again after failing to reduce their standard variable mortgage rate at all despite the Government pumping millions into the banking sector to keep it afloat!
Long Live Woolies!
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One way to boost demand would be to give all Public Sector workers a pay rise that macthes Inflation , say eleven percent.
That would get some tills ringing again !
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Sadly, a sign of the times. I can remember when Woolworths was the main non-food shop in the little market town I was brought up in.
If you wanted anything you couldn't get anywhere else, it was Woolworths, and you usually got a quarter of Pick'n'Mix on the way out.
I can remember getting most of my DIY stuff and a few singles (remember them) there in the 70's
It has lost its way in recent years. I have popped in a couple of times, but found it confusing and with long queues.
I think it was Sheila Hancock on the Andrew Marr show a week or so ago who reminisced about how great an institution it was, but I think she said it has now become "tatty". Sadly, I agree.
I think it didn't know what it was any more. It has been coming for a while, but the crunch has pushed it over the edge.
A sad day
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Actually, if the Public Sector unions went on strike now, they could write their own cheques.
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Yes it's a sad day - not that Woolworth's is going into administration but because again the government considers throwing taxpayers money at this dinosaur.
Businesses evolve or die. Simple. Good examples; Wang died, Apple evolved.
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Very grim for the employees - let us hope that some sort of rescue can happen - however they were just too weak over the last few years; poor website, goods could be found cheaper elsewhere and they didnt really know what they wanted to retail. Odd that so many are 'upset' by the demise as if they had shopped there it would still be ok.
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Of course, as the High Street collapses any company that relies on Rent from commercial retail will suffer.
Eventually all companies based purely in the UK will find their profits reduced.
And many more may go to the wall.
Our economy has long been designed to run with a background rate of Inflation.
Restricting pay rises puts a brake on consumer spending and of course undermines businesses.
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i bet gordon brown will be even happier now, chortling away at peoples misfortune
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-And government policy is not to prop up lame ducks.-
Except of course the lame duck banks. Our government would sell off their collective mothers (and ours for that matter), to keep those particular hobbled mallards from falling.
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For a decade Woolworths has been slowly declining whilst a new retailer, Wilkinsons, with almost the same business model, have thrived and grown.
This surely proves that the problem at Woolworths comes down to plain bad management. They just don't know how to run their business.
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Spare a thought for poor Sir Alan Sugar - he only went and blew £4M of his cash a couple of months ago investing in this entity. Shame eh? Do you think he should fire himself?
Actually, I am kicking myself, I missed a great opportunity since I could have told him he was wasting his money - I could have charged him a mere £500k for my advice and saved him £3.5M - well, hey as the great man says you gotta look for the opportunity.
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This is a disaster, made all the worse by Robert Peston and his continual nosing around in the dirt trying to unearth even worse to come and then gleefully speculating
in advance and congratulating himself on being first again when it comes to pass.
It's not clever, and is undermining those of us at the coal face trying to run small businesses and survive. Have you ANY idea what it's like trying to operate in this fog of irresponsible, hysterical, reporting. We're not stupid, we know it's tough and this type of reporting does only one thing and that is undermine, individual,business national and global confidence. To pretend it doesn't is naive to the point of stupidity. RP should try getting a proper job some day out from under his BBC comfort blanket and experience the cold chill that he and his kind are creating for the rest of us.
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And there's more ......
http://news.bbc.co.uk/1/hi/england/west_midlands/7750958.stm
BMI confirm 5 summer route suspensions .... but this will not be NEW news to many of their customers.
They cut their route from E. Mids to Warsaw several weeks ago... just keeping the flights immediately around the Christmas week operational.
Other destinations, I believe, have had the same cuts.
If you're flying anywhere after Christmas, and they haven't told you it's cancelled..... LOOK OUT!
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No. 20
While I agree with the probability of a total collapse is very high - do not expect normal people who have little interest in anything apart from big brother and I'm a celebrity get me out of here to be able to grasp the economic meltdown where facing.
I reckon by February, when food shortages kick in, people will begin to wake up to the realties of the monster that's been created. This is when the social unrest kicks in....it's all very worrying.
I reckon the government will be handing out food vouchers next year, not 2.5% cuts in VAT!
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@10
They all American workers aswell are they?
am glad i dont know you
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"And government policy is not to prop up lame ducks."
Did you really type that with a straight face?!
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Woolworths in Wrexham has been replaced by the likes of Wilkinsons - similar product range, possibly cheaper prices - but fronting a car park, not hemmed into a pedestrian area. Easier to load larger items (kitchen equipment, storage tubs, garden stuff). I don't think Poundland is an equivalent. It is also easier to buy similar stuff in with the weekly groceries.
So once the Saturday singles chart market disappeared, Woolies has been in a poor position to compete. About a quarter of our local Woolworths used to be music and video.
Easy to see why shops like this are failing. The revolution in UK shopping habits doesn't seem to be understood on the high street and definitely isn't understood by town planners!
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I shed no tears for Woolworths. I dealt with them years ago when they were strong and they were the most incompetent yet bullying retail customer ever.
I recall agreeing with a coleague over 10 years ago that they had no future and no point in the face of the strengthening Grocers and so it came to pass.
Another badly run business goes to the wall. Big deal.
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Huh. Remember when everybody was having a good laugh about those fat-cat bank bosses having to resign in disgrace and how all the bank staff would lose their bonuses and what a jolly good laugh that all was?
Too good for them. Greedy bankers. Imagine conjuring up all that money out of fresh air so that I could lie on my self-cert mortgage and buy an insanely priced house.
How good y'all felt because somebody who 'deserved' it was losing their job. Even Brown (particularly Brown) was getting in on the act. Getting into a swoon about how irresponsible those bankers were.
Woolworth and MFI are phase two of the economic meltdown. The first of many that will fold as the consumer tightens their belts. Maybe that VAT cut came a week too late eh? Yeah, right.
Recession over by mid 2009?
This government are completely off their heads. It hasn't even started yet.
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So HBOS, Northern Rock and RBS weren't lame ducks then? As usual it's fine to save our precious banking "industry" from itself, but when it comes down the the jobs of ordinary shop workers, no effort is worth making. Perhaps if the shop workers union had a yacht in the Mediterranean, Mandy would have tried harder?
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#34 you are actually blaming robert for the recession?
You sound as deluded as GB
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Breaking news...............
Alistair Darling announces new green oxegen tax !
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Oxygen, obviously!
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19 oktorockto
there once was a Tesco Express that closed down not longer after opening in Fulham Road, its now a Bathstore. Probably because there were already 2 others further up and down the road. What a gay day that would be when Tescos finally follows Woollies into oblivion!
17 JayPee28bpr
Another eminently sensible post by you. I have been in a Woollies a few times in the last five years but I'm not sure I found anything I wanted to buy, except for when I used it as a one-stop shop to kit my daughter out for 1st year life at Uni.
to 15 and others - I know this is pedantic but it's lose, not "loose". I can't "loose" my job, but I may well soon lose it, along with my rag with such p-poor spelling.
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It's all very well people reminiscing about pick 'n' mix etc but where have these people actually been doing their shopping?.. Yes that's right, parking for free in some anaemic retail park near where you live.
Tesco are the ones I'd like to see go into administration....we might get the high street back then.
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I think Woolies started going downhill when they changed their pick 'n mix supplier a few years ago,
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It's sad for all of those people now out of work, but not entirely unexpected.
Woolies has, for years, been a "last resort" kind of shop & only, if all of the focused shops failed me, would I venture into their emporium.
The atmosphere was always more akin to that of a bring n buy sale than a proper shop; with sweets next to chart singles next to babygro's next to lamp shades etc.
My overwhelming memory of Woolworths, however, is going in on the day Killer Instinct was released for Nintendo 64 & finding a copy complete with bonus CD when every other game store in Stockport had failed me. I'll miss you Woolies, RIP
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I don't agree with all the talk that Woolies and MFI 'have to go' as if somehow these companies collapsing was inevitable....... there have been plenty of companies turned around...Topshop was half way to a basket case once and now Phillip Green (Sir) has it bouncing past Next and the rest.
There have also been plenty of companies "collapsing" that nobody thought were 'basket cases'.... AIG, Lehman, Honda (even)..Nissan... (both cutting shifts and production in the UK and across the world)
I think I am struggling to retain the thread here!!
But what (I think)I am saying is nobody is suggesting Honda are a 'basket case' ...and suddenly revealing Woolies are and everyone knows it..AFTER they collapse doesn't really add much to anything.
I think half the problem is that orderly liquidations of retail companies have previously rested on property valuations and the attraction of buildings to rivals,(often) supporting the realisation of cash process...but now the commercial property market is so bombed out, and the rest of the retail market so (effectively) over provided with shops it means that method of support isn't there.....
There's a similar issue developing in the newspaper industry where some groups are valued at less than their buildings would have brought IF the property market was like it was in 2006 ...Oh!...and also IF anyone had capital to buy out the companies in the first place--That's two big 'ifs' !!
The bottom line is that this is just an enormous human blow for all the people in woolies... working away with Christmas approaching and now this whole thing is breaking around them...and for once I include the management..who seem to have been battling hard to save the company for ages.
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Anyone with half a management brain could see that Woolworths was a basket case long before the recent problems, it had lost its direction and the directors had no answer, the present crisis has just hastened the demise.
With MFI, this is just a taste of what is to come, many companies are way overleveraged and it is just a matter of time before we see wholesale bankruptcies. Gordon's stimulation package it far too little too late.......but he seems to think all is well, he was smirking all the way through PM questions.
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It's all well and good saying Woolies is rubbish but some of us have no choice. I live in a small town whose high street mostly comprises of charity shops. Our Tesco moved a mile out of town a few years ago meaning if you don't have a car (I can't afford one) Woolies is the only place to get anything remotely resembling a useful household item like a plug extension or a lightbulb. They also sell DVDs and computer games which you can't get anywhere else within walking distance. A lot of people where I live will find it hard to get by when one of the few useful shops left here closes. It will mean you can hardly buy anything without having to get a bus into the nearest big city or to Tesco.
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Why does the government prop up banks and building societies and not high street retailers? The answer is pretty simple really.
Shops are where people spend money.
Banks are where people keep their money.
If the banks go, then people have no money to spend in the shops.
When major banks go down, they have a tendency to take good chunks of the economy with them.
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If we can spend billions to allow investment bankers to carry on getting their million pound bonuses, then why can't we bail out a company who employ 30,000 people?
What sort of 'socialist government' allows working class people to go to the wall while saving investment bankers?
For shame Brown and Mandelson.
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These are bad times indeed. When the government is ready to stave off home repossessions it can't bail out a business like Woolworths and save some part of 25.000 jobs?
Same with MFI who has gone under because of failure in the housing market / downturn (thanks to the government's inanity in the first place).
I mean, if Woolworths is a lame duck business, what about those 25,000 losing their jobs, some of whom will no longer be able to afford the mortgage payments? Are they lame ducks and will the government support them?
Bah! Humbug! Are there no prisons, no workhouses?
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So the great Woolworth's british institution fondly remembered from my child as the place to buy pic'n'mix sweets and 7" singles -- dies a timely and not too soon death.
I feel for the 25,000 employees coming up to xmas -- but this recessionary meltdown is quite rapidly surfacing the fragility of the UK economy.
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This comment was removed because the moderators found it broke the House Rules.
A pubic (yes correct spelling) service worker ( please don´t all laugh) You and all the thousand of your fellow workers (another laugh) re the cause of much of our debt pain (you support Gordan . Yes ) area main causes of our over spending.
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"Gordon's stimulation package it far too little too late.......but he seems to think all is well, he was smirking all the way through PM questions."
Yes, that was positively disgusting. Has the bloke no morality at all? Is he just extracting the mike from us all, knowing he's done-for anyway?
He ought to be made to do community service for the rest of his life to pay back as much as he can for what he's cost us.
Sickened by his smugness.
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hi all
can i just add that its not only woolworths staff loosing their jobs. Im one of the store managers for the store21 concessions just opened in woolworths clydebank our company opened 16 new shops in woolworths in the last 8 weeks, Due to woolworths going we might loose our jobs too. Woolworths might be a stuggling retailer but ive never enjoyed my work so much scince i started in woolies
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guess i'd better spend me woolies vouchers pretty quick!
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Just heard a rumour that the staff at Woolies might not be paid for November. So what on earth is this ridiculous government going on about when urging the company to keep going over Christmas.
Agree with comments about lame ducks, the biggest lame duck in the UK is not the banks but the government.
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It will not be until the high street is a (white)wash with empty glass fronts selling bill-stickers and the Banks have left the empty shells of a bulging by-gone age with interest that people will begin to realise that the journey to the hyper-market is not as pleasant as hustle and bustle of local commerce.
A wasteland between home and shopping utopia where the shelves spew out offers to keep the interest of people before they battle the ground toward home again.
No such thing as community in Britain in this century and not enough charity shops to vill the void
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You can bet John Lewis won't go bust. MP's still have vast expenses and they could probably kick-start the economy on their own.
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After reading this blog, I decided to research Wilkinsons. I liked what I saw, wholely British, privately owned, founder saved a quid a week for 6 years to get the seed money.
I really hope they can get some stores at fire sale prices. for retail.
i am becoming more concerned about the effect this 'economic dip' is going to have.
In our marketplace are some very old traditional Brit companies with large market share.
There are also many EU companies with small market share.
Without capitalisation, and I am thinking only of construction firms but extrapolate across the spectrum, I can 'remote view' a situation where our market gets dominated by more EU, US and Far Eastern companies.
This is fine under my idea of strict capitalism, but (imho) I think it is a shame that this change to the balance of power to our top 500 companies may be due to exotic derivatives traded in the bars in canary wharf over the past few years.
And the bars arent that good either :)
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@ Post 62...
I found Woolworth's buyers to be quite arrogant too. We offered them our products, knowing that we were competitive on price and had good quality, and they refused to even consider looking at our proposal. They had an air of "we're Woolworths, we don't need you". Whilst it's a rotten day for the employees, the finger of blame should be pointed straight at their so-called management, for allowing these hard working folks lives to be wrecked by their attitude. Hopefully the staff can be saved or they'll be snapped up elsewhere, and the management will suffer for their attitude.
Oh yes- pick 'n' mix, 7" singles, etc- remember them all with a touch of nostalgia, but times change, shame their management didn't.
Good luck to all Woolworth's staff.
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And government policy is not to prop up lame ducks.
er...........High street banks have been spoon-fed billions...........or does the government just feed fatcats?
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When I was a kid, Woolworths was a child's paradise. It had everything, from sweets and school stationery to books and CDs. Now, my local branch, is full of rubbish, and overpriced rubbish at that. The majority of the staff are bad-tempered and unhelpful. So no, I won't be sorry to see it go, however, my local High Street won't seem the same without it.
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It's one thing loosing Woollies and MFI, but loosing the regulars on this blog? Where's GC?
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No.82 - Store21
I am genuinely sorry about the situation, I understand that the major shareholders were trying to get this delayed or the best bits sold off but management capitulated - probably under banking pressure.
I was also disgusted to read above that staff may not be paid for november - unforgivable.
I unerstand that there is a 100mill pensions hole, but the fund will probably be hawked off and will be practically worthless anyway, so people who gave years of service will also be screwed. Not nice.
There are other stores/franchises and I hope you do well in the future.
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#88
Yes, they were known through for it but at one time they were the dominant force in certain sectors so to some extent you had to put up with it.
Not all of us did though and I happily put the phone down on one buyer for his abusive attitude. I shan't name him of course but he was nothing without his buying power.
They were also known for being incapable of delivering on a promotional activity. The supplier would fund it (of course) then they'd forget to tell the stores to put the product out, leave the stock in distribution centres, etc then try and come back on you later for more money to clear what they hadn't sold.
The credit crunch is nothing to do with their demise, they've been on oxygen for a decade and should have been put out of their misery back then.
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For perspective only...
'Laid-off workers from a toy factory in southern China clashed with police Tuesday night in one of a string of labor disputes that have been reported across the nation in the face of rising unemployment'
'thousands of factories have been shut down as orders for exports dry up'
Taken from the wall street journal...
http://online.wsj.com/article/SB122772472846760239.html
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When I read the news online I was initially very sad, however where have we all been shopping lately? Tesco and alike. So much for the competition rules? Or is this really market forces?
Wollies demise is a bit of everything from poor adminstration to the credit crunch. Almost saved but those greedy creditors, UK high street banks, and US banks put pay to Wollies. This may seem harsh but fair, the end has been so close for so long.
Next the HIGH ST? The internet is the way forward..... Pick n Mix consigned to history as we know it......
Next this government needs to go..!? They can't blame all the countries problems on the global economy and it woes, before long we could be holding our begging bowls out to the IMF. UK plc should be in adminstration and as such we need a new adminstration. Not sure who can sort this messy out any suggestion. I predict more gloom to come in the weeks and months ahead!
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P.S. sorry #68....couldn't resist it
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All of you feeling nostalgic about Woolies check out the history section of the companies website at http://museum.woolworths.co.uk/
Celebrating 99 years at the heart of British shopping. Is it 'worth it' (sorry) to try and get it to the ton and beyond.
New fb group 'save woolies' with 5,000 plus member already.
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And so Woolies joins the ghosts of Christmas past. This is a sad day indeed, for I remember a time when virtually anything you could possibly want could be found in a Woolworth's store. Whether it was browsing through the well-stocked aisles of their 1980s 'record bar' on a Saturday afternoon or the Winfield christmas lights that got taken out and strung on the Winfield Xmas tree every year, Woolies was for many years a part of British family life.
It survived the last recession - a stalwart of High Streets otherwise shuttered and dark in the bleakest period of 1991-2, but ultimately I fear it was its dependence on those town centre locations it has occupied since time immemorial that was its downfall, because people just don't go 'into town' anymore, and it's a rare out-of town centre that has a Woolies.
I don't even think that their 'jack of all trades' model of retailing is necessarily the issue - after all Wilkinson's, which is in many ways what Woolies used to be minus the Lego and cassettes, has done very well out of it. Some years back Wilko took over a former Sainsbury's midi-market in my home town and in the same week Woolworths closed their first floor sales area - something I considered an odd decision even then, since it instantly halved the range of goods on offer.
And in that same town centre there will now be another gaping hole alongside those left by Littlewoods, Index, McDonalds (left the centre for a new drive-thru on the outskirts), M&S (headed to an out-of town centre), Our Price and far too many others.
Woolies and MFI have survived many ups and downs over the years. Their deaths suggest to me that there are very bad times ahead, for all of us, and all bets are off as to who's next.
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Inevitable Im afraid - I used to manage a Woolworths store about 10 years ago and whilst I agree with most of the comments here about competitors and location as reasons for Woolies demise, I also believe that Woolies lost its magic.
Most of Woolworths' profits came in the last quarter i.e. Christmas. You would walk into a Woolworths store and you would just feel Christmas oozing from every aisle -the decorations, window banners, wall decorations, displays - Woolworths would spend fortunes on theatre within the stores at Christmas but it made it feel magic! And so people loved being in the stores, especially kids and that drove footfall. Remember those lavish adverts, my favourite was Norman Wisdom and the nutcracker - genious. Woolworths was Christmas. Then we got some strange alien but that was okay and now a stupid sheepdog and sheep. Unfortunately the store decorations have faded the same way and now Woolworths is just another High Street retailer with nothing special going on.
I must agree most with those who blame this on poor management, not just recently but over the last 10 years.
I had the privilege of working with some fantastic people in what was a family sort of atmosphere - I wish them well!
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I worked for Woolworths for 10 years, until 2002, I loved the job and was very proud of the Woolworths brand up until the last year or so.
Woolworths helped create the Kingfisher Group and was on the verge of merging with ASDA back then. Aggressive marketing, competitive pricing and innovative promotions. Woolworths lead the way introducing 3 for 2 and BOGOF promotions, as well as the giant Big W out of town warehouses.
Then the company went rapidly downhill, losing out on ASDA to Wallmart, the branches that were owned by the company were sold off and rented back as it seperated with Kingfisher and went on its own with Superdrug.
Not long afterwards the direction and vision of the company virtually disappeared. Before leaving they were trying to re-establish the stores as a one stop shop for home entertainment, special events and sweets.
With the rise of Tescos, under cutting and selling at a loss (even though supplied by EUK - the distribution arm of Woolworths) they were hammered. The branches fell into a shabby state with the constant re-arranging of shelves, banners and promotional products on a monthly basis.
Plenty of the posts highlighting the poor performance of the company and bad management in recent years are correct.
I would point out a couple of things though.
Firstly, in many small towns Woolies is the ONLY shop offering such a wide variety of things from CD's to School wear, picture hooks to light bulbs, and those small communties need these branches.
Secondly, the 25,000+ employees work very hard and long hours (60+ a week when I worked there) and I feel for them at the moment facing possible redundancy at Christmas of all times - their busiest period.
I only hope that the smaller, vital branches are saved and at least some of the colleagues keep their jobs.
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I stopped going in to Woolies as much after I left school and found its offerings a bit weak, its stores were also tatty and the range not very impressive. That said I feel sorry for the staff, as the few times I did visit them it was clear that their time was limited.
Its ironic that Woolies is the type of store that the UK now needs, i.e. cheap! However its total lack of management in recent years has in the end resulted in it collapsing before it could benefit from the downtrodden economy.
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From the first paragraph of the BBC headline report.
"High Street legend Woolworths has buckled under its debt and is set to go into administration, BBC business editor Robert Peston has learned."
The first bit of that sentence is news. The second bit is celebritisation of BBC's reporters - oops, editors. Why is Robert Peston news? Aaarrrgh!
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Ah the 'Sixpenny Bazaar' what a shame they couldn'y even sell it for £1.
There is a lot of talk about Tesco. In France there are very few supermarks bigger than our local Aldi, although they do sell slightly more variety.
It seems to me Aldi have it about right; price, quality and size of shop, and it is in the centre of our small town. The produce is local, well they could not pay high transport costs at those prices. Shame it's the Germans showing us the way.
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#99
Agree entirely about the christmas experience but the senior management at woolworths would or could not grasp this.
The final nail in the coffin was M&S using the woolies christmas theme tune to good effect this year. No more 'walking in a woolies winter wonderland'.
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It's ironical that Woolworths demise should be down, at least in part, to internet shopping and downloading of CD's.
If Woolworths hadn't given Alan Sugar his break by selling all those cheap Amstrad electricals, would the revolution in home computing, which was started by Sugar with his IBM compaptables, ever have got started?
Probably but it is a thought.
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I am sorry for those who might lose their jobs. However I disagree about the loss of the high-street name Woolworths being lamentable. I feel the same about MFI. IKEA patently replaced MFI as the place for self-assembly furniture some time ago. TK Maxx springs to mind as Woolworth's replacement. My point is that the history of British brand names is littered with the once famous "now forgotten". In an esoteric way this type of "typographic clearout" of high-street brand names is a positive thing.
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How can you write "And government policy is not to prop up lame ducks" ?
Given that such a comment is asinine, untrue, offensive and contemptible you must be grateful that your commentary is not subject to moderation.
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contrary to what some contributors are saying, i have been spending money, like robert, at woolies at least once a week since the birth of my daughter ten years ago.
she is crying about the possibility of losing her most loved shopping trip.
she wants you all to know where she bought her man united boxer shorts!
what are we going to do in future?
let's hope it is picked up for a song and that the stores survive and its employees have a reason to celebrate christmas.
a sad day
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# 92
The pension scheme deficit should be covered by the Pension Protection Fund, esablished after a couple of out fits went under 2-3 years back. So that will at least maintain the scheme where it is now.
Hopefully, someone will buy some of the WW business. The retail sector might look like "Gloom Inc" right now, but it's also an opportunity. WW has some great sites. Their demise means the owners of those sites are now staring at zero rents, and so will happily do a deal with a strong company that wants to takeover WW lease. So I hope some (many) of the stores are acquired by a retail group that has funding and is willing to take a chance. Those sites in poorer locations are probably finished, I'm afraid, but there are plenty in big town High Streets that ought to be attractive.
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"And government policy is not to prop up lame ducks."
So what do you call Northern Rock and the other banks who have had hand outs from the tax payer....they gambled and now need our money to bail them out.
Surely if we can give the banks Billions then why can they help Woolworths out until a buyer is found thus saving over 20,000 jobs, it will cost us alot if all these people are made unemployed in Social Security payments.
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Woolies is the main national retailer on our local high st, directly opposite my own shop - in towns such as ours it still fulfills a real need, and is constantly busy. If it goes, the footfall on the high st will probably halve, and other businesses disappear. I expect some additions to the 4 charity shops already operating on the high st, a legacy of the early 1990's.
A proactive management would have, as was mooted a while back, shrunk the business to concentrate on sites such as ours - small market towns that Woolies main competitors could not be bothered with. Better to be a big fish in a small pond.
Too late now, and I fear for the future of high streets (indeed entire town centres) such as ours that teeter on the brink of total implosion. Boots already downsized after its merger. A sad day when we are thankful for the presence of Clinton Cards!
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I have returned:
All very predictable.
Pound shop!!!!!
Watch this space for the end of capitalism as you knew it - back to the potato and not soon enough.
Those who read me before followed a journey that had too many predictable scenarious, ie end of IMF as we knew it.
W is just small fry unfortunately.
The next journey involves a trip to New York and Detroit, selling as I go.
See you tomorrow - PS Mr O is not a saviour.
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It's a sad day for the 25,000 or so employee's losing their jobs...possibly more counting MFI and external suppliers...but Hey if only they were Banks, with mega rich salaries and contacts...the story would be different...once again it's the ordinary working person who suffers...Ricky
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Don't shoot the messenger, Mr Peston is only reporting what's happening.
Don't be doom mongers, we will not vanish without trace, economic activity will continue, we will recover and we will sort this out.
I can't see what has been done in the PBR is going to make a great deal of difference, but only time will tell.
One thing for sure, economic activity has to be broader based than one sector, the housing market, we cannot go on borrowing and generating wealth or income we have no basis for.
Longer term thinking I believe is a must, some diversity that gives a balanced economy that can ride out world economic variations.
Only on an economy with a strong base can all sectors survive. The retail sector is sure to get a pasting short term, however we need to look ahead of the current crisis and ensure we are set fair for the future.
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It is sad to see the demise of "Woolies" but it is hardly surprising. For years their shops have been dull, tired and in the wrong part of town, selling stuff you can buy pretty much anywhere for the same price or less.
The current financial situation may have pushed them over the edge but this is a disaster that has been waiting to happen for years.
2009 will be a bleak year for their staff, but I hope someone with the flair and imagination to reinvent the Woolies brand will pick up the pieces.
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ive only just been employed at woolworths and if they do go in to administration it will not effect me as bad as im still under the age of 18. with woolworths folding it makes the banks see what they really are doing to this country, intrest rates and higher pays for them while they sit there and watch 30,000 people unemployed. Great britian is turning into a place where people dont care for others. SAVE WOOLWORTHS and save the people that will become unemployed. how can bankers and these banks sit there and watch others become redundant and grin that they have got a bonus this month. its the banks fault this mess started in the first place, charging such high interest rates. the funny thing is that everybody will know someone that will be out of work, and banks are sitting there allowing it. the whole thing is a joke and the UK has gone downhill the last few years. the government can bail out banks when there i debt but cannot bail out a big company that will put people in a postition when the government will be paying out a lot more in benefits. the whole incident makes me sick.
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#114 You say that "Mr. Peston is only reporting what´s happening"
Mr. Peston actually writes "And government policy is not to prop up lame ducks"
He must have written thousands of words about insolvent banks and government capital injections into those banks, and government guarantees to cover some of their activities.
He knows full well that whatever government policy might be, government action has been to prop up plenty of lame duck banks. I don´t think that too many Woolworths employess will have sold complex derivatives to their customers or paid themselves $ millions in bonuses.
25,000 Woolworths employees can be written of with a glib statement that is the opposite of the operative truth - and you think that he´s only reporting what´s happening!!!
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Very sad day indeed. Feels like a part of your life has just passed away.
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What a shame they couldn't last until Monday, when the deluge of cash with the huge 2.5% off would surely have saved the day.
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Robert - Another sad day. I'm afraid that Woolies probably won't be the last chain to go in the present unpleasantness, I feel sorry for the shop workers on low pay who will get next to no redundancy payments or even pay in lieu of notice.
They will also find out that the JSA they are entitled to is less than half of what pensioners get.
Of course the government was busy this week giving rich pensioners (retired public sector workers and those with final salary pensions) even more money!
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I know that I am showing my age but in the 1940's and early 1950's Woolies was a virtual replica of what Wilkinsons is today.
They sold a vast variety of household goods, haberdashery, kitchenware etc. and every store was awash with buyers, as Wilkinsons is today.
They then tried to go a bit up market and completely lost their way.
My local Woolies is a complete shambles with staff who seem demoralised. It consists of two floors and I reckon the whole stock range could be accommadated on the ground floor. Some items are even duplicated on both floors.
Having used Woolies for so many years when I was younger I find it very sad that it could possibly disappear, but this day has been coming for a very very long time.
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#79.
Np57Np asks "what's going on?"
You should work in the oil and gas sector..
Almost every company that's worth a damn has been bought out by either the Yanks or the Norwegians. The Norwegians in particular are really good at picking off our small high tech high value adding companies usually aided by greedy short termist VCs or PE companies..
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Mumbai
Woolworths
MFI
Banks
Billions
When the billions have been spent on the Banks and MFI closes its doors assimilating Woolworths, we will have our Mumbai moment.
Too big to fail
Too big to tell
Too big to contemplate
Too big to imagine
The world has started to react and the state controlled media chooses to pick and lick the Governments line - we're Ok cos we're british and the banks will save us
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117,
Yes I do, Government would say it doesn't prop up lame ducks wouldn't it.
This government obviously doesn't see banks as lame, its their 'wealth' creation that has kept the government in pay and expenses.
It wasn't Mr R Pestons decision to save the banks, it was the government's.
I don't suppose more than a very very small percentage of our population has seen, never mind sold, a complex derivative. Probably the majority in Parliament fall into this category as well.
I find the reporting informative and discussion moving, perhaps this tounge in cheek comment from Mr R peston was intended just for that!
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Ignoring the challenges of Woolworth's Retail Shops, I can't help but wonder how much of Woolworth's core problems of an insurmountable debt mountain stretch back the the ejection/demerger of Woolworth's from Kingfisher in 2001.
Do I smell the familiar stench of financiers, banks, speculators and other 'pillars of society' who grubbed their millions on organising the the deal and providing the debt financing saddling Woolies a millstone around their necks for the last 7 years, not allowing the business to invest in turning itself around.
Best Wishes to the 30,000 staff, my thought are with you in these troubled times.
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All the over-emphasis of the negative newsflow whilst undoubtedly raising the profiles of certain media personnel has contributed to the destruction of what would be viable companies, albeit some requiring changed strategies, and will contribute to the destruction sadly of more.
Consumers are now frightened to buy anything discretionary or which can be put off.
The media ought to have a far more balanced approach - the recent publicity given to nationalisation of the banks despite the government saying it is not under active consideration and the Treasury saying the banks are more than adequately capitalised, and without any discussion of the many downsides of nationalisation is an example of concentrating on the downside, thereby destroying confidence and helping bring about ultimately many more job losses and wealth destruction.
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In recent years Woolies has become the poundshop, trouble is they were trying to sell junk worth less than a pound for more than a pound.
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The problem with Woolworths is that it had no raison d'etre anymore. It is possible to be successful selling in-town, but only if you can offer parking close by at zero or low price or you sell high value small goods (such as good quality jewellery) which can easily be carried. With London and a few other centres excepted bus passengers per se tend to have a low budget and cannot carry much, so mainly the car-less go to smaller town centres - this did for Woolies. Even a city centre the size of Bradford has NO serious department stores now, virtually no speciality shops and is awash with charity shops. So people go to sheds near or out of town.
Many more retailers will sink - even the likes of BandQ and Homebase are vulnerable when people discover that a washing machine connector stop valve costs 4.38 at BandQ but can be purchased for 1.17 ,both inc vat, from a local plumbers merchant. The internet will potentially kill these two and some of the electrical retailers. Their produce is mostly grossly over-priced with a few choice bargains. Woolworths was the same .... but without the bargains
This Govt is totally washed up, arrogant and remember, generally, politicians merely PRESENT A MESSAGE, relatively few ministers actually have experience of working in the area they are supposed to be governing. So Peter Meddlesome knows a lot about trade & industry..yeh exactly what trade and industry has he ever created or managed - he just spins. Remember, politicians get switched from department to department, answering parliamentary questions a day or two after moving to an area they know NOTHING of.
As an aside, I can explain why politicians (particularly this Govt) have so many new and some apparantly overlapping initiatives and targets. This simply to make it impossible to ascribe success or failure to any of the said initiatives or targets - its simply a smokescreen. The same is true of ministers, top bankers or other captains of industry. 3-year MD contract year 1 investigate, year 2 formulate strategy, year 3 implement ...take massive bonus ... get the hell out of the company before results known
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Woolies is going under? So what? Surely that's part of a healthy economy: new models replacing old an worn out versions.
What is worrying is that the model that should be going under - as they have proved their uselessness in a modern economy - are being supported by governments to try and hide the fact they supported and encouraged untenable models.
No, that's not worrying, that madness!
But I cant blame this pathetic government - they've been advised and encouraged by those that wish to continue down this path to ruin, and ensured that anyone with a clue is not there to help.
The only silver lining I can see at the moment is the tories have stopped claiming these failed policies were stolen from them. Its not much, but knowing there's no way to turn makes me less dizzy.
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The problem with Woolworths is that it had no raison d'etre anymore. It is possible to be successful selling in-town, but only if you can offer parking close by at zero or low price or you sell high value small goods (such as good quality jewellery) which can easily be carried. With London and a few other centres excepted bus passengers per se tend to have a low budget and cannot carry much, so mainly the car-less go to smaller town centres - this did for Woolies. Even a city centre the size of Bradford has NO serious department stores now, virtually no speciality shops and is awash with charity shops. So people go to sheds near or out of town.
Many more retailers will sink - even the likes of B&Q and Homebase are vulnerable when people discover that a washing machine connector stop valve costs 4 pounds 38 pence at BandQ but can be purchased for 1 pound and 17 pence ,both inc vat, from a local plumbers merchant. The internet will potentially kill these two and some of the electrical retailers. Their produce is mostly grossly over-priced with a few choice bargains. Woolworths was the same but without the bargains
This Govt is totally washed up, arrogant and remember, generally, politicians merely PRESENT A MESSAGE, relatively few ministers actually have experience of working in the area they are supposed to be governing. So Peter Meddlesome knows a lot about trade and industry..yeh exactly what trade and industry has he ever created - he just spins. Remember, politicians get switched from department to department, answering parliamentary questions a day or two after moving to an area they know NOTHING of.
As an aside, I can explain why politicians (particularly this Govt) have so many new and some apparantly overlapping initiatives and targets. This simply to make it impossible to ascribe success or failure to any of the said initiatives or targets - its simply a smokescreen. The same is true of ministers, top bankers or other captains of industry. 3-year MD contract year 1 investigate, year 2 formulate strategy, year 3 implement ...take massive bonus ... get the hell out of the company before results known
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This is just the tip of a big iceberg.
My sources in the know reckon there to be at least several hundred retailers (large and small) at risk of insolvency.
Xmas is critical to them, and to the job market in 2009. More failures like Woollies and MFI in the High Street will create a serious recession.
As a consumer led economy, we are hamstrung by poor public finances, masses of debt and higher taxes (deferred).
Where are the solutions, and where are our leaders with the solutions. Ah, I see that nice row of ostrich tails poking through in the dimming sunlight. Lots of backsides to cover, but no one daring to show their heads.
Without taking any political sides, we need a real commercial and political leader likened to an "economic war based PM". Vince Cable is the only politician to emerge with real credit in our sorriest times since WW2. As a qualified accountant with real world business experience, his has been the only real voice of reason in the past 12 months. Get him in!
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Sorry, but the likes of Woolworth have lost out to the Supermarkets for one VERY SIMPLE REASON. Left wing politics. Since Liebour came to power Mr Peston, we've seen the car haters driving car users out of town and city centres.
Why should I pay £5 to park for a few hours in a town centre (or even more in some places) when I can park for free out of town at a Tesco or Asda?
Our town and city centres are dying out for this reason. Greedy left wing councils urged on by this useless Government so loved by the BBC using th elie of 'climate change'
Expect more shops to go the same way.
When will a council have the bottle to offer FREE parking?
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Does anyone else hate Robert Peston as I do? He seems to be making his name on the misery of others and it revelling in it. When a reporter becomes the news rather than just report on it, surely he impartiality is in question? I believe that his irresponsible sensationalising of Northern Rock and HBOS made their situation worse.
BBC, remove him. He should be working for the Sunday Sport.
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Come on Peston. Get off your soap box, stop being such a doomsday merchant and get real. Woolworths has been doomed for years now. It has struggled since the success of online retailers such as Amazon.
Let's hope that Woolworths go to the dogs before their wholesale arm gets a chance to stock your books in other stores. How much are you making out of others misery Peston?
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1. The banks who pulled the plugs on Woolworths and MFI are NOT British. However, they were operating in the UK under British Banking licences, so rank as such, and so were part of the subject of the Chancellor's comments yesterday about not pulling the plug in this way. This calls his bluff and must be reacted to without delay.
2. This therefore ranks as a declaration of economic warfare by the Banks responsible. Their operations must be taken over immediately, and all UK Banking Licences suspended pending nationalisation without compensation.
3. There can be no appeal and this must be done immediately. The guarantee proposition not merely failed, it positively provoked these demises, like giving a sugar boost to someone in a diabetic coma. Any further prevarication will cause more such aggression and unwarranted casualties, and the shock of the UK closing its banking activities should cause a sense of reality even in pan-nationals.
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Today I am very disappointed by the very sad news about Woolworths.
I really wished the government would have stepped in to help this great business, the banks have been helped out, but why not Woolworths?.
I thought I would show the following details of how Woolworths helped out during WWII:-
At the height of the Battle of Britain, colleagues in the stores were keen to do their bit to support the war effort.
They were already raising funds for orphanages supported by the Company, and many colleagues not in the armed services were serving in the ARP, Auxiliary Fire Service or as Auxiliary Nurses or volunteers with the Women's Voluntary Service. But they wanted to do more.
A subscription arrangement was suggested where people gave part of their weekly salary to a fund to buy a Spitfire for the RAF. Hearing of the proposals, the Directors of the Company offered to match colleagues pound for pound . If the stores managed to raise the money (which would be no small achievement without fund-raising from the customers) to buy a Spitfire, the Directors would buy one too.
The Stores, District Offices and Executive Office gave £4,933, with the Directors contributing £5,067 - enough to pay for two Spitfires. They sent the cheque to Lord Beaverbrook the Minister of Aircraft Production. He replied:
Dear Mr Denempont
You send me on behalf of your Company and the employees in your Stores and Offices, a gift which is inspiring proof of your faith in victory and your determination to achieve it.
I am immensely grateful. You bring me encouragement and inspiration in my task, and you pay tribute to the gallantry of our airmen.
Your "Spitfires" shall certainly bear the emblem you desire. And in the triumphs which they will win in defence of our homes and liberties your Company and employees will have their share
Yours sincerely
BEAVERBROOK
On December 11th 1940, the Company heard from the Ministry of Air Production that the transfers
Nix Nix
Six Six
Primus Secundus
Had been affixed to the planes and they would shortly be in the air, defending Britain from the Luftwaffe.
Nix over six was the name of the store sports clubs and social committees, referring to the Company's longstanding motto of "Nothing over sixpence".
What a sad day this will always be if only they were able to celebrate their 100th Birthday next year I myself will always remember going to a Woolworths Store just like my late Mother & Father and even their parents in their day.
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The end of Woolworths as it approaches its 100th year, is very sad for all of us.
Having worked for the company for 20 years it has been a big part of my life. Working at woolworths in the store i am assistant manager in is like working with a big family and always has been like that.
The problems started when Kingfisher which was formed from woolworths ditched woolworths.
i am lucky as i only work part time and have another job. Many of the staff in my store are the major breadwinners and have small children. We just dont know what will happen.
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It is a fact that Woolworths has been struggling for perhaps 10 years now and MFI for many years too. Woolies as a company have spent millions overs the last decade reinventing themselves and coming up with nothing new or relevant to today's high street, how long should this have continued? You could even argue that the old brand that so many are mourning, contributed to its ultimate demise.
Had it not been for Entertainment UK and the 2 Entertain parts of the business there is a pretty good chance this could have happened any time in the last 5 years. I think this recession for Woolies has only brought to a head what the boom years have allowed it to cover up.
My only sorrow is for the staff and their families.
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#116
You and your colleagues have our sympathies. For what little it's worth, being a casualty at the start of what's coming may yet be the saving of you, as you won't be caught in the tidal wave of redundancies which will overwhelm the system if this goes the way some of us are worried about - you have still got a chance to get the system working for you to help you back up.
If that means you're running a soup kitchen, then at least you'll have found a use for any stock of kitchenware they have left over...and you'kll be behind the counter, not in front of it looking for a buddy to lend you a dime.
Another lesson for all of you: GWB's grandpa was one of the first to go bust in the Great Depression in 1929. Now, he had friends in high places, the Harrimans, to whom he sold his soul in return for bankrolling him again - they had him finance Krupp in the run-up to WWII, in which he was what can only really be termed a war profiteer on both sides, as he also financed the US war machine. Just be careful to do a good job when the time comes...
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It's a sad day indeed - but the quality at Woolies had dropped.
Re post 120 what makes you think that all retired Civil Servants are rich.
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There's a whiff of genuine "depression" mounting especially in this country.
Housebuilding decimated. Banking decimated. Retailing about to be distecimated. Country bankrupted by Gordon Brown's boastful boom and bust failure to prepare.
The delveraging of debt throughout the economy is going to result in millions.........probably 3, 4, maybe 5 million being unemployed for many years.
This is historic and we've virtually no way of saving ourselves becasue there is nothing in the kitty left.
However, when it's all over houses, labour and fuel will be much cheaper and that will act as the basis of recovery.
The only thing that won't be going down is that cost of servicing and paying back Crash Gordon's £500B bond based bailout.
This man should face an economic war crimes trial because losing an election by a mega amount won't be enough.
He'll just waltz away with his fat pension leaving the ret of us to cope with his unbelievable failures.
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Re comments about propping up banks - NR and BB have not been propped up - they are being run down and largely destroyed, and shareholders (our pension funds largely) have not received a penny in compensation, and appear very unlikely to.
If further banks are nationalised, they will be merged as Lloyds and HBOS are, with hundreds of thousands of job losses, and with a major contraction of a sector providing 10% of our GDP and much government tax revenue.
If the recapitalisations work despite their onerous terms the government will ultimately sell on investments at a profit.
If they don't these banks will ultimately be likely to go the same way as NR and BB.
The adverse knock on impact on UK business, mortgaged home owners and consumers would be enormous with many large and small companies and home owners facing major refinancing problems.
International investors, and domestic investors with any money left, would shun the UK. Our pension funds would be decimated.
The Government has got to support the banks (this not mean continuing to employ duff directors and huge pay packets), and ought to support viable large employers such as housebuilders and retailers which are having difficulty refinancing, by guaranteeing their debt to the necessary extent, as well as by stimulating demand.
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This comment was removed because the moderators found it broke the House Rules.
Now wouldn't it be nice if, as a goodwill gesture, a consortia of banks actually wrote off the mere 385 million. As things stand a few banks got in the way of a deal and it will be interesting to see how much of their 385 they will get back. Havent they lost billions making mistakes, couldnt they do the right thing?
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RIP Woolworths.....
......inevitable really its fate was sealed the day we allowed Tesco, Asda, Morrisons etc to sell what they want, where they want and when they want.
As the Supermarkets thrive the High Street will slowly capitulate.
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Erm, Robert Peston I think the stores are called 'Woolworths' not 'Woolworth' as you are using.
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I, like many I am sure, am saddened at the demise of Woollies. It has proved a stalwart through so many difficult periods and managed to survive them all, while their competitors fall.
It has been almost an institution to some, and I for one have beena regular shopper there over the years- it always has proved to be the shop that has what you may search a dozen other shops for and not find. I really hope someone steps in and saves Woolworth. I would be happier knowing my taxpaying money for example was going into helping an institution such as this and helping so many people avoid the job centre queues than all the cash recently ploughed into the banks and fatcats behind them!!!
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Post 131. Prisonernumber 6
I might believe in Tory policy but yes Vince Cable seems to be the ONLY politician with finance and business experience.
Brown has NEVER had any idea. Darling is just an ineffective poodle and Osbourne hasn't quite got a grasp os specific policy but is thinking in the right direction.
Basic problem is that Ministers are no being bold and imaginative enough......so yes they should move over and let Vince have a go for a few weeks to see if this makes any difference!
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Why doesn't the Government buy our Woolworth, its part of our heritage. They have saved Banks with far more of our money. Lets buy something we believe in 'Woolies'
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It is sad but, let's face it, poor old Woolies has been on the downward slide for years.
Wilkinsons is much better at catering for the same market these days.
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Please can we have just a bit more balance from the media. If I go to Woolies to buy some pick n mix and see sadly that Woolies has closed down, I go somewhere else for the same item. The economy has not lost Woolies turnover (£3b?), this is just transferred to a better business who just might now recruit some extra staff!!
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Banks are different from other companies -nearly everyone and every company needs a bank - no one really needs Woolworths. I think I've bought something from Woolworths twice in the last 10 years - it is a declining retailer squeezed by the more upmarket retailers which have better products, attractively setout with easier access, while at the other end of the market, Woolworths is squeezed by the Pound shops on price. MFI is a recent management buyout - clearly it didn't have enough capital to survive the credit crunch especially as its products are usually sold to people who have just bought a house.
We also have predictions of civil unrest - I could take these more seriously if those predicting this didn't do so with such obvious relish. Hopefully, the fiscal stimulas given by the government's action on Monday will help reduce the effect of the recession, as will the reduction in interest rates. These actions will not however end the recession immediately, and other businesses will go bust, and many will lose their jobs. The US has announced a huge programme which will help stimulate world economic activity, and the decline in sterling will hep UK exporters. There are long term issues that will need to be addressed - debt and the future of banking among them, but governments are rightly concentrating on dealing with the immediate impact of recession.
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Forgive my strong comments,however I am absolutely disgusted with the CONSTANT 'media hype' in relation to the 'credit crunch'.
( BBC INCLUDED )
For the last 18 months the media frenzy on this subject has fanned and fueled the flames to an extent that is now WAY, WAY beyond repair.
The media have made the American issue 100000% worse than it should be.
Constant hyping of the problem...constant irresponsible headline making.....constant scaremongering......undermining peoples confidence without a thought about consequences.
Most of these headlines could have been filmed at any time in the last 15 years....People shown sobbing as they can't afford their mortgage....this could be filmed at ANYTIME, so WHY, WHY, WHY choose now to show this type of situation and make a headline of it ?????
To justify the presentors, reportors and Business Editors positions.....thats why.
The BBC should change their tune and GET POSITIVE........... QUICK, or else you might find the comfortable and smug presentors, reportors and Business Editors MIGHT JUST FIND THEIR OWN JOBS ARE AT RISK.
Heaven forbid, what will we do if we don't see vast numbers of presentors, editors making ridiculous and negative predictions, only really boosting their own high profiles, positions and egos night after night, whilst crushing the rest of countries industries and professions.
SORT YOURSELVES OUT..........
The BBC,who are usually reasonable in their reporting, are MAJOR culpits in hyping up the problem.
WATCH OUT PRESENTORS and BUSINESS EDITORS........keep making the negative headlines and your jobs WILL BE NEXT.
Can I suggest that you actually report on what the public believe is making the financial situation worse.........THE MEDIA will be the answer.
REMEMBER We pay your salaries...........STOP, STOP what you are doing to the country, AND GIVE US ALL A BREAK, BEFORE YOU PUT YOURSELVES OUT OF A JOB.
I don't want hear a response a responsible reporting of an issue - that is ABSOLUTE RUBBISH.
You CRUSH INDUSTRIES AND BUILDING TRADES for 15 minutes, and drop it like a brick for SOME OTHERR story, paying yet another reporters salary.
Regards
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2008 has already seen some high street names go bust although Woolies will be the largest. I have the utmost sympathy for the staff, especially just before Christmas, but have to challenge those talking about bail outs. There is no commercial logic to keeping the company going so why should the banks create even more bad debt - which inevitably would have limited future lending. That being said, how ironic that only yesterday Darling, Mandelson and King were all on attacking the banks for supposedly not lending to business
( threats of nationalisation ) and the very next day the Woolies collapse but no comments that I've seen stating that the banks should have kept the company going. Hypocrisy or realism?
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Alan Sugar....you're fired, he just bought 3.9% anyone feeling a little smug?
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In line with the original concept of Woolies, perhaps someone can step in and buy it for £1.00. This certainly seems to be the defining point of the credit crunch in the UK. Maybe the demise of Woolies signifies the demise of basic, sensible values - values which have disappeared in the finance sector. The government claims it is not worth saving Woolies as it already had underlying problems with its strategic goal. Well, the banks have lost huge amounts of money even though they have a clear strategic goal, yet the government is happy to save them. The credit crunch hasn't just happened, it is the culmination of a number of years in which the governement refused to restrain the flow of credit. What will replace Woolies on the high street? Why don't the banks put their money where their mouth is and run a business as simple as Woolies. Maybe that will put some confidence in the economy and be a test to see if there is anyone with any business acumen in the banking sector.
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Great memories but over 2 million people a week still shop at Woolies. And no they don't write for the BBC or the Times, but whilst you can buy everything else where ,as the journalists keep reminders us (isn't that true of most things?), no one can replace Woolies. Millions of us will miss them.
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Forgive my strong comments,however I am absolutely disgusted with the CONSTANT 'media hype' in relation to the 'credit crunch'.
( BBC INCLUDED )
For the last 18 months the media frenzy on this subject has fanned and fueled the flames to an extent that is now WAY, WAY beyond repair.
The media have made the American issue 100000% worse than it should be.
Constant hyping of the problem...constant irresponsible headline making.....constant scaremongering......undermining peoples confidence without a thought about consequences.
Most of these headlines could have been filmed at any time in the last 15 years....People shown sobbing as they can't afford their mortgage....this could be filmed at ANYTIME, so WHY, WHY, WHY choose now to show this type of situation and make a headline of it ?????
To justify the presentors, reportors and Business Editors positions.....thats why.
The BBC should change their tune and GET POSITIVE........... QUICK, or else you might find the comfortable and smug presentors, reportors and Business Editors MIGHT JUST FIND THEIR OWN JOBS ARE AT RISK.
Heaven forbid, what will we do if we don't see vast numbers of presentors, editors making ridiculous and negative predictions, only really boosting their own high profiles, positions and egos night after night, whilst crushing the rest of countries industries and professions.
SORT YOURSELVES OUT..........
The BBC,who are usually reasonable in their reporting, are MAJOR culpits in hyping up the problem.
WATCH OUT PRESENTORS and BUSINESS EDITORS........keep making the negative headlines and your jobs WILL BE NEXT.
Can I suggest that you actually report on what the public believe is making the financial situation worse.........THE MEDIA will be the answer.
REMEBER We pay your salaries...........STOP, STOP what you are doing to the country, AND GIVE US ALL A BREAK, BEFORE YOU PUT YOURSELVES OUT OF A JOB.
I don't want hear a response a responsible reporting of an issue - that is ABSOLUTE RUBBISH.
You CRUSH INDUSTRIES AND BUILDING TRADES for 15 minutes, and drop it like a brick for SOME OTHERR story, paying yet another reporters salary.
Regards
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# 135
Great fighting stuff. Let's all blame the banks for the collapse of a business losing market share consistently over several years. By way of illustration, why don't you tell us all how much you have spent at Woolies in the last 5 years.
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# 136
Nice story, which neatly sums up Woolies problems. Basically, hasn't done anything noteworthy since 1940.
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Being one of the 30,000 likely to lose my job by the new year - it's hard to grasp how the BBC leaked the news of WW going into Administration, before we had been advised at Head Office.
Strangled by the banks and crippled by the supermarkets, it was always going to be a downward spiral to the abyss.
Just not as quickly as this ....
Woolies.......RIP
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I suppose it is survival of the fittest - and the Woolworth's model did not fit in the current market (fittest used in its correct sense - 'most suited')
I know that at least one other major high-street chain won't last through any prolonged recession.
However - look on the bright side - the loss of a major high-street player means that the other high-street shops should gain a boost in sales and so help them - and maybe save other jobs.
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My heart goes out to the employees. I had an Xmas job in the Woolies cafe once. It was crap, I still remember the greenish gunge in the milkjugs as they came out of the dishwasher ready to be refilled, but I needed the money and was glad to get it.
But let's not get sentimental about a mere chainstore. They come and go. If you want the true spirit of Christmas, go to church. If you want continuity in life, a link with the ancestors and generations yet unborn, get a religion. Some of them have been around for well over two thousand years and haven't changed that much recently. If you're too atheist for all that, read the classics, watch Shakespeare, listen to Bach...
But don't expect comfort and familiarity from capitalism. It's about constant upheaval, history is bunk, everything that is solid melts into air.
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#124 Yeah OK maybe it was "a tongue in cheek comment" to provoke discussion or something. Whatever it is it still shows a complete disregard for the feelings and concerns of Woolworths employees.
#135 You don´t seriously think that there will be a government response to this do you? This is just the banks way of making clear to idealists and fantasists exactly who is calling the shots - and it certainly isn´t the UK government.
#141 If you want cheap houses, labour and fuel go to Africa. You need something to do that will earn money - it won´t be manufacturing and it´s highly unlikely to be financial services. Until someone articulates a sensible strategy there can be no recovery
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I apologise if my comments are just stating the obvious but it seems to me that the government needs to install confidence in the widest sense to the man in the street in order to address the current situation. Examples of this include the following:
1. Confidence that our core personal assets are protected to a certain level:
1.1. If we have purchased a house then, under reasonable circumstances including the owner being financially prudent, it cannot be removed due to ill health etc during retirement or old age.
1.2 If we have contributed to a private pension then these are structured and administered such that a reasonable % of its value (as valued say at 10 years before retirement and averaged over an appropriate period of time) is guaranteed at the time of retirement regardless of market conditions.
1.3 The removal of final salary pension schemes for government sectors. How can the man in the street with a private pension scheme be confident that MPs have a truly independent agenda when it comes to policy decisions on pensions? If MPs were subject to the same market influences on pensions it may focus their minds on the true concerns of others.
2. The average person also wants the confidence that the people who have orchestrated the causes to the current financial problems are brought to rights. To a large extent these perpetrators have made their large profits and bonuses based on short term self cantered objectives and, dare I say, in the full knowledge of what the longer term consequences would be. As mentioned in your book ?Who runs Britain? the risk reward divide has never been wider. A retail worker being paid a small % above the minimum wage with almost zero employment benefits at, for example, Woolworths is turning up tomorrow not knowing if they have job and indeed if they will be paid for November or December. At the same time a whole range of perpetrators are sitting on massive fortunes.
In summary whilst the average person does not pretend to understand the fine details of the mechanics of global financial instruments we do understand the concept of a personal stop loss. If we know the worse case scenario both in business and privately we can take actions and decisions to deal with it. Additionally if we have the confidence of knowing with reasonable accuracy what the stop loss will be (e.g. our private pension value and security of ownership of our property and other assets later in life) then we will start spending accordingly. At the risk of repeating myself an element of this stop loss ?valuation? is to install confidence that the perpetrators or, perhaps of more relevance, the system within which they operated is removed.
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Where will it all end? If this isn't Dawkinsesq proof of natural selection memed high street history in the making I don't know what is!
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I am not surprised that Woolies is going under. For the last decade, it has struggled to make an effective proposition and strategically, it was struggling.
It is sad to see a great brand go under but really, has its management done enough to preserve it? I think not.
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Sorry to see woollies go.
So what have I bought this year from there?
Apart from hand towels, bath towels, face cloths, knickers and socks for girls, craft kits for birthdays, a fancy dress costume. bed linen, T-shirts, party dress, birthday cards, sweets, pinata, hemming glue, shoe insoles, a seesaw, DVD, music CD, cards, flower bulbs, a fleece top, kids jeans, gift vouchers, chocolate . . . and all at affordable prices.
It's been a handy shop for me, the staff are helpful and cheery. I will be sad to see them go.
It'll leave a big gap in my high street town in Derbyshire. And I won't find that amount of useful items under one roof so close to home.
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#5:
"Woolies, sorry to see you go. MFI the same. Who's next?"
DSGi?
Another fine example of an organisation that has failed miserably to cope with increasing (and much, much cheaper) competition.
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Robert,
I notice the BBC recently ran the following story, about Woolworths rejecting a takeover bid from the Iceland chain:
http://news.bbc.co.uk/1/hi/business/7566429.stm
Putting aside for one moment questions related to the Icelandic economy etc - did Woolworths do a Lehman Brothers, rejecting a takeover bid that could have saved at least some of the stores and attendant jobs, out of simple arrogance?
Or was the Iceland bid wholly unfeasible, especially given the subsequent collapse of the Icelandic national economy?
Regards
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#159 Your implied argument would be valid in a world where all are treated equally.
Why prop up a bunch of insolvent banks and not a bunch of insolvent retailers?
Why prop up a bunch of insolvent banks so that they can immediately pull the plug on insolvent retailers?
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Can someone tell me why our wonderful government was not able to come up with a package using one of the banks we have recapitalised? Or a mix of them all to spead the risk? I heard Woolies had a turnover of £3 billion last year, with debts of only £345 million this would have been a workable basis to service this debt easily.
I have not seen the accounts but surely there would have been an ability to service some of the debt if renegotiated at ok rates, saving 25,000 jobs??
Or am I being naieve?
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So sad-my departed grandmother supported my mother and Aunt during and after the war when my grandad was killed in WW2 from working long hard hours at Woolies. It was also where I bought all my kids' back to school stuff, books, records, CD's, Christmas presents, decorations and goodness knows what else.
The thing I hate about this time of year-redundancies are always up. My heart goes out to all those losing their jobs and November's salary.
This is obviously going to be the fault of the USA in GB's eyes.
After all, we don't have a problem in this country, do we?
I, for one, am glad my GMAC mortgage was sold on by them, and then again to Advantage (RBS) -I'm not a buy to let mortgagee, just a normal householder-one property which is my home-just spent all day decorating!
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A few more comments:
Wasn't the news about Woolies and MFI around last night and early this morning? In which case, it's hardly breaking news, more a case of detail.
MFI seem to go bust on an alarmingly regular basis-this seems to be part of their business model!
PLEASE can people spell correctly? It's incredibly irritating when 'managers' try to sound clever and then, apparently, don't know the difference between lose and loose!
LOSE means to mislay or become dispossessed of something eg. I'm sure I will LOSE my sanity at this rate!
LOOSE - means to become unconstrained/free. eg. My trousers are loose and may fall down!
Therefore-my LOOSE trousers could mean I will LOSE my dignity!
How can so many people make such a basic mistake and yet expect to be taken seriously?
I suggest less reliance on spell checkers and a refresher course in basic spelling!
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Woolworths cannot stand a chance to compete with other retailers, and it has been for some while. This isn't really a surprise. What suprises me is that people saying they are sorry about what happened, but actually never bought anything at Woolies!
To me this is pure reality of business. You don't have a robust business model, then sooner or later you'd go bust. As simple as that!
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# 171
Insolvent banks were propped up because the alternative would involve the forfeiture of everyone's personal bank balances. Not to mention the loss of credit to business etc. Keep in mind that the shareholders in all the banks have either lost everything (Northern Rock, Bradford and Bingley), or virtually everything, examples being any other bank you care to think of.
The bulk of banks' business is sound. On top of that we need them, eg ATMs, credit cards. Just remember the annoyance you feel when you go to an ATM and find it's not working or out of cash. Now imagine every ATM in the country did not give you cash on demand. Tell me how you'd do something as simple as your grocery shopping. I've been in a country with a non-functioning bank system. It isn't pretty.
It's unfortunate for many Woolies staff that they're going to lose their jobs for reasons outside their control, but as someone above has pointed out, if Woolies isn't there, just go to the shop next door for your sweets. Unfortunately, letting one bank go under has a much bigger knock on effect. What triggered the collapse of HBOS etc was the US decision to let Lehman's collapse.
Also, take a look at the research on retailers' market share over the past few years, and see the decline of Woolies. This was a company heading to the knackers' yard well before anyone had coined the phrase credit crunch. Propping it up now would simply allocate scarce credit to a business wholly incapable of using it to maintain itself profitably. It would result in Woolies failing again in the future, and other companies failing in the meantime for wont of the credit diverted to Woolies now. Others will keep their jobs as a result of not trying to resusitate a corpse. Woolies has failed because it's a bad business, no other reason.
Finally, what's your view on Woolies suppliers? The banks have kept Woolies credit lines open whilst suppliers have demanded payment in advance for supplies, ie it was suppliers who turned off the credit tap to Woolies first. Do you think that's wrong? In the short term, it's made sure they have no bad debts with Woolies. However, the result now is that they can get no further business from Woolies, so the imapct on cash flow for them is pretty similar
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Very sorry to say a GRIM day for JOB LOSSES.
Looks like 20,000 plus to go all in one day.
True unemployment will be more like 6million
by 2010 including the 2 million mystery
incap claimants which arrived post May
1997,on top of the original 950k from 96/97.
THE FRUIT OF NEW LABOUR.
HOW MANY WILL CHOOSE between FOOD
or GAS/ELECTRIC i wonder?
ANY ANSWER ? Messrs GORDY ALLY D or
MANDY???
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#149 - what planet are you on? Do you think we should prop up every business there is the slightest bit of emotion attached to no matter how confused it's offering - I don't think that's the way forward.
#153/158 - I'm pretty sure Mr Peston isn't going to have to worry about losing his job, I think he might even be angling for a soon to be announced position as consultant to President of the new Economy. If that falls through then inevitably he'll create a rival to the BBC where all the presenters speak in a bizarre slow slow, quick quick slow manner.
But seriously I think the BBC has largely provided us with information, yes some of the headlines might seem scare mongering but there are clearly some serious fault lines in the financial systems that would have led to what we are seeing now reporters or no reporters.
What troubles me most is that the actions that drive our entire global economy are are fairly strongly influenced by human confidence, a most fragile of things at the best of times, that strikes me as a very dangerous situation.
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and finally
It's hardly surprising that if our banks want a piece if the American Market, then American financial institutions want a piece of ours!
Not just mortgages, but those of you with credit cards should check out the parent institution of your card company!
Whether we like it or not, USA and UK businesses are so mixed up in each other's economies that it's hardly surprising that noone knows what's what-including the Banks! And what about Asian involvement?
Even if a company is registered at Companies House, it's funding may indeed come from overseas. Why? Because we import more than we export, and it makes sense to invest in operations where your market is!
Is there a list somewhere of fully British owned, operated and funded businesses? I think it will very short if there is!
We need to re-define what is British so we can support our own economy, not another country's balance of payments many thousands of miles away. Trouble is, so much is foreign based, we couldn't possibly survive if we had to 'buy British'!
This may sound protectionist, but I'm not. Neither do I have sympathies with the BNP. I am, however, a nationalist because I was born and raised in this country, and I really want to be proud to be British again. So I am not going to apologise for being a nationalist! Belief in one's own country should not be deemed as a spurious, dirty thing.
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And there was me thinking this was our lucky day - over 175 posts and no Alexander Curzon and his CAPITAL POSTINGS.
Sadly post 177 WILL INEVITABLY be written in CAPITALS.
Never MIND
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woolworths is the place you go when you can't find it anywhere else, will be a bit strange to see high streets without them.
Also my opinion of robert preston lowered some reading the blog and watcxhing the interview, he was enjoying the downfall.
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....shall I continue? (stupid phone again!)
I appear to be suffering from premature posting!
ChangEngland made an excellent suggestion (and is VERY interested in you).
With the prevalence of social networking sites and various other internet facilities, there surely is approaching a time when there is a very serious place for an Internet based political party?
My mind boggles at the permutations-not least of which, Sasha Clarkson could be very productive even when stricken as as present!
Very low operating costs
Massive implications for blazing the campaign trail through the ether
Very few costs
And finally, instant response to electorate woes such as the sinking of Woolies!
Just think-a successful Internet based. Political party could have prime minister's question time via a new 15% vat giant plasma tv-instanmessenger and web cam!
What a brilliant suggestion! Incredibly large savings on public expenditure! All expenses would simply be for the cost of computers and Internet connection!
Fantastic!
The New Age Of Politics beckons!
I am not being sarcastic either! This idea has real merit!
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AC
Regarding unemployment...
What about the numbers of people NOT claiming benefit?
This is another of those skeletons we all know about-except, of course, our esteemed leaders!
Another strange thing is happening-everytime o write a possibly contentious post, I get kicked off the internet! I'm not a great fan of conspiracy theories, but it makes me wonder....!
What so GCHQ and the security services make of all this?!
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and somewhere in the ether is the premature part of my posting addressed to Alexander Curzon!
It was something about AC already having the beginnings of his cabinet with Sasha Clarksin, Change England and myself!
How weird!
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Blacksmiths went out of business soon after the advent of the internal combustion engine. Pyramid builders suffered a similar fate with the decline of the Fairy-Ohs.
Fletchers and bucklers and candlestick makers... oh dear, the same.
Time to support the solar-panel makers and Mr. Windy Turbine.
Get the picture you lot. That's the wonder of St. John's Worths, that's the wonder of a locally produced Wool Sack breakfast.
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Very sad day for Woolworths and the High St in general. All woolies products are available in the supermarket superstores and this coupled with high rates for its branches, reducing town centre footfall due to 'out of town' retail parks with no car parking charges and the increase of online shopping trends with the likes of Amazon have contributed to its demise.
A lot of town centres now consist of mainly: charity shops, pubs and fast food outlets because of the aforementioned reasons. Is society changing for the better ?
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"And government policy is not to prop up lame ducks."
There's lies, damn lies and reports of government thinking !!
*IF* the government does *NOT* support lame ducks, why has it given all that money to the lame duck/basket case banks to prop them up ?? Why were they not allowed to fail and let the strong one take over their market share ?? Why were they not made to strangle in their own filth, the toxic assets ??
Strong ones like Lloyds TSB, Barclays, HSBC and even, Standard Chartered !! They should be encouraged to succeed and help the economy out of the mess we are in !!
Or is it that dear old Woolies are not Labour supporters or too dispersed to make any difference to Labour votes ?? Does the same apply to MFI ??
Next in line for the chop ?? Dixons/Currys/PC World ??
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Alas! Woolies has gone the way of the Mammoth and the Morris Minor.
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#180 Could it be that he has a "keyboard malfunction" and is stuck with the Caps Lock on ??
Just thought I'll ask !!
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#176 "Insolvent banks were propped up because the alternative would *involve the forfeiture of everyone's personal bank balances*. Not to mention the loss of credit to business etc."
Not true at all. There are still quire a few solvent banks that would cheerfully take up the slack !! All the government had to do was to guarantee the banks' deposits and allow them to be transfered in an orderly manner to a solvent bank of their choice !!
The propping up of insolvent banks is a political decision and has *NO* commercial rationale !! The LTSB/HBOS shotgun marriage is an attempt to sabotage the SNP !!
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#188 Sir, I'll have you know that the Morris Minor is still highly cherished and kept in good running order in many parts of Asia !! No so the Mammoth, Woolies or otherwise !!
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On last nights 10pm News you should have pointed out that Woolies has been a lame duck for years, as you mention on your blog. Having worked in the music industry for many years, supplying Woolies with CD's & DVD's, it has often been on the brink for credit and could have gone into administration several times when economic times were good. It has been an unfocussed retailer for too long and although I am sad to see them go let's have a half full attitude from you and a proper balanced view. The message I got from your report was that Woolies is a victim of the credit crunch which is not strictly true.
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This comment was removed because the moderators found it broke the House Rules.
Woolies is hardly a linchpin of the economy. It matters not a jot to the consumer whether it is there or not. It could be argued that the retail sector will employ their employees as the money is spent elsewhere.
The losers will be in their pension fund members and shareholders.
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#164 "If you want cheap houses, labour and fuel go to Africa. You need something to do that will earn money - it won?t be manufacturing and it?s highly unlikely to be financial services. Until someone articulates a sensible strategy there can be no recovery"
On the other hand, there's the Nigerian version of financial services known throughout the world as the 419 emails !! Same principle, different methods !!
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Many a good High Street name has departed into the mists of history !!
Where is C&A from whom I have purchased many a garment that are still used today ??
Shed a tear and move on. There's more to come tomorrow !!
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Very considered and thoughtful expose of the Woolworth situation and its knock-on effect this morning on BBC Today programme RP..
GC
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#187 - well said.
Lame duck:
a term applied by Government arbitrarily to describe a firm who were otherwise robust and solvent until the entire economic substrate collapsed.
There are plenty of lame ducks around, parliament is full of them. What are MPs doing for the people in this socio-economic crisis? Something much more important or maybe just drawing their salaries.
Gifted Gordon is now even asking Her Majesty to show solidarity to her subjects during the recession. Pity the leader can't do it himself - and it does rather show the oddity (?) of having a PM who is (or should be - or claims to be) leader of the United Kingdom and a Head of State who actually has to be invited to help out.
GC
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Whyever should Woolworth's demise be so 'shocking'? (Radio Four Today programme comment.)
It has been obvious for years, Woolworths was hanging on by its fingertips in a sector where it had been surpassed. Its strategy has manifestly failed, recession has accelerated the necessary outcome.
It sells actually quite pricey products in what seems like a bazaar. When did anyone genuinely get the bargain they really wanted, at Woolworths?
Should we be 'shocked', Woolworth's sales have fallen sharply just recently? That is exactly what you would expect to happen if economic forces are working as they should, with people hastening to switch to genuinely competitive retailers as money becomes tighter.
Or shocked that suppliers will have lost an outlet for their products? The competitive ones should find outlets elsewhere or change their products/prices.
This is all part of a necessary weeding out, freeing up retail space for fresh innovation.
As as aside regarding MFI, it has been laughing stock for well over 20 years, for example the joke over one furtive Tory Minister in the 1980s, 'One loose screw and the whole cabinet falls to pieces.'
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It might be the recession wot dun it but this is really just another huge step towards erosion in consumer choice. Woolies had a business in which the majority profit was generated by a small proportion of lines. These lines were ruthlessly cannibalised by supermarkets. And, without their high profit lines Woolies could not survive the long term selling the stuff we need that supermarkets won't stock (screws, light fittings, tools, toys (out of the Xmas season). So the recession supplied the landing ground but Woolies was knocked over the precipice by Tescos.
This is not market efficiency. It is anti-competitive.
Who is next to suffer as consumer choice consolidates into the dictatorship of mass taste as Tescos raids - WH Smith, Boots, Superdrug,..?, for their prime lines.
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It might well be government policy not to prop up lame ducks but note that an attempt was made to mediate by the "special adviser". This failed of course. Really, what is the point of this "special adviser" if not to create solutions? If you fail in your job you should be out. Brown please note.
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'Woolies' used to sell cheap rubbish, today they sell expensive rubbish. I have not liked the insides of their shops for years, what does one go to woolies 'for' ??
Their sell by date has finally arrived.
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A 1p sales tax on any store chain with more than 50 branches, and perhaps 2p on chains with more than 250 outlets would raise a fortune in tax revenue, help the smaller guy and would be barely noticeable to the consumers wallet.
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Why all this sentiment about a business? I believe I haven't spent as much as £50 cumulatively in a Woolworths over the past ten years, because the stores are full of tat. This is Woolworths problem - they lost their place in the market years ago, its surprising they have hung on for so long
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# 190
Name the banks that were perceived to be solvent, emphasis on perceived. I think you must have been in some kind of parallel banking universe over the last few weeks. Banks stopped lending to each other after the Lehman's collapse, out of fear that they didn't know who would go next. So it was almost a self-fulfilling prophecy. The fact is, central banks had to step in to provide the liquidity that commercial banks wouldn't.
The HBOS business model was shown to be badly flawed. Not only was it over-exposed to residential property, but it's also been doing a bit of "private equity meets mezzanine finance" business as well, a business Lloyds appears set on disposing of as soon as it gains control. Painful though it may be to accept, HBOS was a matter of days away from failure when the Lloyds deal was announced, since which there has been a lot of talk about alternatives, but no concrete proposals.
From a customer perspective, I'm not a huge fan of the Lloyds-HBOS deal. Over time it will allow UK banks to become fat and lazy: they will use Lloyds as a price setter, ie we'll see a quasi-oligopolistic structure to UK retail banking. Once the banks recover sufficiently, don't be surprised if Lloyds gets broken up again.
However, to suggest this is some kind of carefully thought out political plot to undermine the SNP, you're having a laugh, right? Do you think GB and Ally D are smart enough, if nothing else? Alex S is quite capable of derailing SNP ambitions without external help. His "crescent of success", or whatever he called it, looks a bit shabby now. The Celtic Tiger, Ireland, is likely to suffer the worst recession of any developed economy excluding Iceland, another of AS's quoted success stories. Ireland was the first to go into recession. It is not capable (financially) of recapitalising its banks. Iceland has seen interest rates rise from 12% to 18%. I can see the people of Scotland thinking that's a cheap price to pay for independence. Norway appeared to be cushioned by high oil prices, but at sub-USD 50/barrel that's no longer the case. Alex S then chucked in a few more success stories, eg Denmark. They, too, have had to raise rates to defend their currency and talk has started about Denmark joining the Euro, not something high on Alex S's agenda, I suspect.
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# 198
Guy,
Here's a question for you. A bank has a limited amount of credit available, let's say GBP 100,000. There are two companies that both need GBP 100,000 to keep going through the recession. One is called Woolworth. the other Guy Croft Racing. Who would you suggest the bank lends the money to?
You have been one of the most vociferous critics of the banks, giovernment etc getting us into the credit mess by reckless lending etc. Implicitly that means you think we need to see less lending. That's what's happening here. So, I ask again. In a world of less credit than we've previously had, would you prefer to see Woolies fail or your own business? Which, in your view, can make best use of what is a scarce resource (and one considerably scarcer than just a few months ago)?
And I'd also repeat my question from an earlier post. What's your view of Woolies' suppliers who have been demanding cash up front for supplies? They turned off the credit tap well before the banks.
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#187 "Next in line for the chop ?? Dixons/Currys/PC World ??"
Maybe - but, as with Woolies, this has been on the cards for some years too. The share price hit a high of £4.99 during the dotcom bubble, but today it was UP to 15p.
We can't bemoan the loss of high street names we don't use, or don't use significantly. I build computers for my friends as a hobby and install linux systems (ie untainted by Microsoft). I have never sourced hardware from the aforementioned firm, as it is, in my opinion, usually overpriced, obsolete and of indifferent quality. The staff seem poorly trained too (not their fault). Mostly, I have used online firms; one in particular has been so successful that it now opening some retail outlets. This firm has given me excellent customer service and support for the last 12 years. I hope they continue to succeed.
On the other hand, decent value "white goods" are available from my local Coop without the painful extended warranty hard sell.
The problems of certain retail chains have been exacerbated by the credit crunch, but were not caused by it.
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@151
Oh Dear , Houston we have a problem...........
Robert its very worrying that alot of people still dont understand whats going off. And when the effects of this situation really starts taking hold that people are not going to be able to manage. I mean as in there health its going to be a real shock to there system.
The banks will be operating at more near 50% less than they where in 2007. meaning 50% less loans and credit cards. meaning 50% less busniesses. leading to 50% less jobs
The 3 billion which was spent in wollies wont be spent in other stores as that was some of the debt we just paid back. thats why they say the economy is shrinking,
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#159, 164 re my #135
1. I work overseas flying the flag to keep our reputation intact in Europe. I would dearly love to be back home, but I do have unique skills which mean I must be elsewhere. Therefore, I don't pop into Woolies every day. However, the last time I was across a month ago, I attempted to buy something fairly expensive from them but they were shut - 1730 on a Saturday, which says something about their commitment in hard times. It's par with the rest of their problems, poor store layout, poor branding, poor image, therefore poor sales and a business up the swanee. They knew this from the close run-in they had in the 1980s, and now it's given their bank the chance to pull the plug on them. Is it the bank's fault? Not entirely, but quoting their borrowing at the peak of its annual cycle, after buying the stock needed but before Christmas sales income derived from it comes in(something like 2bn), is hardly representative of the company as a whole, and pulling the plug on that at just that moment is downright irresponsible behaviour by the bank concerned, particularly when the Chancellor has stated this is not behaviour he will condone.
2. Do I really believe the Chancellor will do anything about it? There has been a subtle but important change in the last 10 years in the balance between Government and Banks. Ever since Eleanor of Acquitaine hocked the entire assets of the Kingdom to buy Richard the Lionheart out of the hands of the hands of the Holy Roman Emperor, the state has been endebted to the Banks, who have got used to having their own way. That finally came to an end a bout ten years ago, but the City just cannot accept that the boot is now well and truly on the other foot - I'm not far from starting to call this treason, in passing, and it's certainly Treason Felony ) the Chancellor has an unusual position in this regard, you will find, and acting against him may be construed as acting against the State, so the rest of you be careful! To answer the question, therefore, is that if he has said he will act, then it might be thought that he intends to keep his word, the only question being how long he takes to get around to it and what that does to our invisibles, which will obviously be matters for his concern. The appropriate question for your examination is whether we still have any significant invisible income, and if not, where do we go from here?
So, the hyper-lesson is that if this is the bell-wether, beware.
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#207
Now, if someone pulled the plug on PC World and that empire, that would see me open a bottle of champagne. The shop welched on me a few years back, and they're on my personal blacklist - I think a few million other citizens may also feel the same way about being sold various pigs in pokes. Such con-men we can well do without, particularly at this point in the crash. To rebuild confidence needs values, and reputation, which this shop lacks.
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#204
Why all this sentiment about a business?
They may be full of tat, but you could say that about any number of retail operations on the High St and in trading estates. Most folk working in retail have little control of what they stock and sell. Woolworths were not only a retail chain - as RP outlined (very well I thought) on Today this morning, they handle a lot of distribution to other companies of magazines, books and dvd type stuff.
Tat notwithstanding - a heck of lot of people stand to lose their jobs. That's not sentimentality! That's plain 'not good'!
GC
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Woolies will continue to trade for a while as the £380 plus million they have borrowed is secured against their stock and they will want that converted into hard cash as soon as.
Look out for mega bargains at Woolies this Xmas.
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It is a real shame for Woolworths as we've always liked the store.I find that all the media want to do is talk about doom and gloom and I'm getting pretty fed up with it.I work in retail and actually our sales have increased these last few weeks...oh no...what ...good news!
You see people still want to spend their money and don't want to hear all this misery from journalists who want to keep it going .
I'd rather talk about the positives in life.Well thats just me because any situation,however low can be turned around and new ventures can be explored otherwise we all might aswell give up and after all thats not human nature and its certainly not British.
Woolworths had been struggling for years and its hard to compete with giants like Tesco.Its a sad but true fact and I feel sorry for the workers but as someone else has noted that many famous brands have struggled or gone under over the years,such is the ruthless world of retail and business.Its as if the BBC are enjoying all this...am I wrong but thats the impression !!! Think about the affect you are having on peoples lives before you write your blogs and columns .
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It disapeared from the US over a decade ago, and although it feel odd for a while in teh grand scheme it matters not at all whether the name exists on the high street.
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#211
Guy - I have nothing but sympathy for Woolworths employees - it is sentimentality about the brand I can't relate to. I hope - and there seems a reasonable chance - that the distribution side of the business will survive. I gues that depends on the bankers.
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#209 I don´t disagree with either your reasoning or your historical understanding. I´ll still be amazed if there is any meaningful government response. Their only policy is expediency and I´m betting it will be deemed expedient to let it pass.
It seems like a racing certainty that invisible income will become literally invisible. I´ve got no clue where we go from here - unfortunately it seems neither does anyone else. Your warning to "beware" is well taken.
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HOW MANY OF YOU HAVE BEEN INTO A WOOLWORTHS RECENTLY ?
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Comforting to know Brown claims to be standing behind this firm now. He will ensure it stays open through December and staff WILL be paid.
Let's see shall we.
The Administrators have been called in: Deloitte
There's your confidence...
On the 13 Oct 2008 ... Deloitte has admitted losing a laptop containing thousands of people's pension details....
Again. (and again) You just couldn't make it up!
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Aswer to " iwanttoscream " I was in woolies last weekend and again this morning. In the far north of Scotland - woolies is a part of our real town center which is being killed of by the put of town strangle hold that Tesco has achieved. The town centers will cease to exist in the future. I also notice camerlot has twisted the knife - no lottery sales at woolies from yesterday.
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What a sad day, I am 68 years old and Woolies has always been there, one of the great pleasures was the pic n mix closely followed by the Ladybird brand of kids clothes.
I fear Woolies is the start of many and that the High Street may soon become a wilderness
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I think theres more to life than sweets and dvds so im not dissapointed or sad to see woolworths go. Infact im not even sure why i bothered writing this at all.
How did woolworths manage to get so heavily in debt? Was a monkey in charge of its finances or what?
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Many retail buisinesses were only profitable from their unproductive sitting on massive commercial capital gains accrued through the age of delusion ,gains that now, fortunately ,are relocating back into the realms of fantasy.
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